Booker's Bourbon

Making Unicorns: Why $100 Booker’s Will be Good for Jim Beam

Sometimes I think I’m the Bourbon Contrarian. Maybe it’s the fact that I worked in the bourbon industry where most commentators only have an outsider’s perspective. Perhaps not. But I had a different perspective on the value of Drake’s whiskey  and now I think I’m going against the grain on the Booker’s price increase announcement.

Fred Minnick broke confirmed the news that Booker’s is undergoing a suggested price increase from $59.99 to $99.99. Since it was often available at lower than SRP, it’s basically doubling in price. And in addition to the price increase, Beam-Suntory is reducing the yearly release amount by about a third.

Booker’s is one of the “rare uncut & unfiltered” bourbons on the market – that means it’s presented at barrel strength (not cut with water) and minimally filtered so more of the fatty acids and other compounds are left in the liquid.

As expected, there’s been a lot of discussion about the change. In a post at The Whiskey Wash, Lew Bryson commented, “Things like this are what make people walk away.” Brett Atlas with Bourbon & Banter is clear with his opinion: “I can’t see this strategy working out.”

I disagree. Yes, I think bourbon enthusiasts will move away from Booker’s but probably only for a time. Especially given that this group has no problem with the same strategy from Sazerac or B-F: PVW, BTAC and even the Jrs rarely even hit shelves before they’re snatched up and OFBB has nearly doubled in SRP in the last five years.

Here’s the thing: the vast majority of bourbon consumers won’t understand that previous sentence. Bourbon enthusiasts, sure, but not general consumers. For most buyers, there won’t be the context that Bryson and Atlas included in their articles (and the even greater context of quality difference between those whiskeys known easily by their abbreviations vs Booker’s). Instead, most buyers will only perceive a disorganized set of buzzwords: #rare #uncut #unfiltered #allocated #lottery #barrel-strength #bourbon named for a #deadDistiller and #woodbox packaged.

From Atlas’s article:

David Perkins from High West told me [Atlas] recently, “Whiskey drinkers want two things: (1) Something they’ve never had, and (2) Something they can’t get.”

Know what else is rare, uncut, unfiltered, allocated, named after a dead distiller and priced at $100+ a bottle? George T. Stagg. Most bourbon drinkers haven’t had it and can’t get it. In one press release, Beam-Suntory has positioned Booker’s as equivalent to GTS for all of the consumers without context to know differently.

Bryson concludes:

At $100 a bottle, a lot fewer people are going to be buying Booker’s. There will be more people looking further down the price listings for something good. And there are going to be more people thinking about aged rum, and brandy.

I don’t agree. I think we’re witnessing a unicorn being born.

I think this is going to be good for Beam-Suntory’s bottom line. But is it going to be bad for consumers as Bryan and Atlas believe? I don’t think so – I don’t think it’ll be a blip on their radar.

What’ll be far worse for consumers will be the continuing deluge of massively overpriced and low-quality sourced ‘craft’ whiskey and the forthcoming flood of massively overpriced ‘handcrafted, grain-to-glass’ but extremely young actual craft whiskeys. “Repack MPG” means something to bourbon enthusiasts but not to the other 99% of bourbon consumers; enthusiasts also have more grounded expectations for barely two-year-old straight bourbons aged in mini barrels.

(I don’t mean to imply that all sourced, contract or craft whiskey is bad – much of it is actually good. But a lot of it isn’t. And the average consumer won’t be able to keep track of which is which.)

As the price-to-quality ratio dissolves into meaninglessness and the shelves get crowded with bourbon bottlings from the 1,000+ distilleries that have started up in the last 5 years, we’ll definitely see “more people thinking about aged rum, and brandy.” But Booker’s won’t have anything to do with it – and Booker’s will be comfortably selling out every release.

UPDATE 01/03/17: Fred Minnick broke the news (again) that Jim Beam is scaling back the Booker’s price hike. I’m sticking to my guns that we’re witnessing a unicorn being born – it’s just a more painful birth than Beam had anticipated.