No question about it: American whiskey is in a new golden era. Category sales have reached heights unseen since the 1960s, the last time brown spirits boomed. But that prior golden period came before the whiskey swoon of the ‘70s and ‘80s. Should we expect another decline coming soon?
Not so fast, say the experts.
“For me, I’m of an age that I can remember when brown spirits were popular a long time ago,” says Pam Heilmann, master distiller and EVP of production at Michter’s. “I remember riding in a car with an old mentor in the late ‘80s or early ‘90s. We saw a funeral go by and my mentor said, ‘Well, there goes another brown spirits drinker’.”
Now? “I think a ‘golden era’ is a great way to put it,” Heilmann says. “It’s still a growing category, with a lot more room for growth. It’s a worldwide market now, and we’re growing overseas and we’re growing in the U.S.”
Part of the reason for this sunny forecast is that whiskey taps into several key consumer trends: high-quality products, interesting brand stories, and educational opportunities.
We have not yet reached the ceiling for consumer interest in whiskey. Nor do we appear close. So expect more good times for whiskey this year and in those ahead. With that in mind, here are 8 trends that will help define the category in 2019.
1) High-Rye and Wheated Bourbons
Flavors that consumers enjoy today trend towards one spectrum end or the other: bold or approachable. Either can describe whiskey, as evidenced by the rise of both high-rye and wheated bourbons.
Given the appetite for bolder flavors, it’s no surprise that spicier high-rye mash bills like Bulleit Bourbon have exploded in recent time, while rye whiskeys have come back into fashion.
This trend took off around 2004. That’s when Four Roses first introduced their single barrel bourbon — a famous high-rye. It “demonstrated an intensity of flavor heretofore unseen in Kentucky bourbon,” recalls New Riff Distilling Co-founder Jay Erisman. “Things haven’t been the same since.”
New Riff, opened in North Kentucky in 2014, goes for similarly bold bourbon with their 30% rye mash bill. Erisman sees this style as “part of the zeitgeist now of bourbon flavors. These are not going away. Our national palate has changed. It’s like when Julia Child released Mastering the Art Of French Cooking. It’s a cultural moment of everyone waking up and thinking, ‘This is delicious, and we’re never going back’.”
Wheated bourbons became popular thanks to the success of Makers Mark, and the cult-like followings around Pappy Van Winkle and W. L. Weller. “The wheat adds a softer, smoother mouthfeel,” says Old Elk Distillery President Luis Gonzalez. “It allows newer bourbon drinkers to enter the category. This is bourbon without the heat that you would get from a high-rye or high-proof whiskey.”
Accordingly, some distilleries have begun to tame their ryes and high-rye bourbons, hoping for that balance where bold flavors exist without the super-spicy bite.
MGP Ingredients in Lawrenceburg, Indiana, produces approximately 80-85% of the rye on the market. During recent taste testing, MGP researchers found a common complaint among consumers was that rye “hurts.” So the company blended together a house style with less burn on the back end.
Old Elk has taken a similar tack with their high-rye bourbon. Which makes sense: the brand’s master distiller is the legendary Greg Metze, formerly of MGP. To avoid a very spicy high-rye, Metze slows the spirit’s proofing process. from the typical 24-48 hours to a multistep method that takes weeks. This softens the rye heat.
“A lot of people like the flavor of rye without the heat of it,” Gonzalez says. “This allows them to drink it like they prefer it: a little bit softer. It’s a little bit more inviting.”
Which is all to say that rye and wheat bourbons will remain popular in 2019. Expect customers to express interest in bold bourbons and also those more accessible.
2) Quality Whiskey is King
There is a quality issue in the whiskey industry, led by newer brands.
Launching a craft distillery or whiskey brand is not cheap. While distilled product rests in barrels, the backers will naturally look for easier ways to recoup their hefty initial investment costs. In some cases they release product that’s too young. Other times they buy bulk spirit from sourcing houses like MGP and finish the spirit poorly before bottling.
Frankly, these whiskeys can taste terrible, but still carry high prices because new distilleries want to break even quickly. The concern is that consumers who buy these subpar products, spending top dollar on low quality, could get turned off from the category as a whole.
“We almost don’t associate ourselves anymore with ‘craft distilling’ because of the low quality that sometimes can be associated with that,” says Erisman of New Riff.
Although New Riff did release sourced stuff (to positive reviews) four years ago while getting off the ground, the distillery now prides itself on releasing only house-made whiskey of high quality.
“Everything we make [except the single barrel], and everything we will make in the future, is Bottled in Bond, made to those standards,” explains Erisman. “We don’t look at this as a gimmick, because we are truly declaring ourselves as quality-first.”
Some distillers have concerns that the U.S. government has not done enough to dissuade brands from releasing dubious product, and fudging details on labels.
“I think the TTB is really letting us down in not really helping us identify the whiskey categories,” says Stranahan’s Master Distiller Rob Dietrich. “We need stronger boundaries about what is and isn’t whiskey. For something that is so highly regulated, it’s odd that the definitions are not so regulated.”
For instance, an “American Whiskey” can legally contain a certain percentage of neutral grain spirit. “I think most consumers do not understand that,” says Heilmann of Michter’s.
But consumers do understand quality and consistency. It’s why they return to legacy brands.
“The reality is that consumers should demand the utmost quality for products because they are paying a premium,” says Sean Yelle, category director for brown/dark spirits at Campari Group, which owns Wild Turkey. “As an industry we have a mandate to provide the best whiskey. And remember that consumers get the final say, and they will find out who is quality and who is not.”
Which means that the brown spirits wave may not lift all boats. Look for newer distilleries to struggle in 2019 if their quality cannot keep up.
3) Younger Whiskey is Getting Better
With the influx of underaged products, many of them subpar, there is also a rising number of younger whiskeys that taste quite nice.
Given the exploding number of craft distilleries, it makes sense that some will have figured out how to produce quality whiskey on a quicker timetable.
Typically these are distillers that have experimented extensively with production techniques. Rabbit Hole of Kentucky released a series of whiskeys after only several years of aging. The company played around with unusual mash bills, higher proofs upon barrel entry, and differently charred casks. The result was whiskey that attained mature flavor earlier than anticipated.
“It was a complete surprise to me, as I had said that I would not release anything before four years,” Kaveh Zamanian, owner and whiskey maker at Rabbit Hole Distilling, told us last year. “But the color and the flavor were there. If the flavor is there, that’s the benchmark. If the product is tasting good, then it makes sense. If not, then it needs to wait.”
Reservoir Distilling from Richmond, Virginia, also makes younger whiskeys that taste better than their age might suggest. They work with mash bills that are 100% rye, wheat or corn, and age in casks five or ten gallons, rather than 53-gallon bourbon barrels. These smaller containers (made of Virginia wood) impart flavors faster due to increased wood contact, the company says. This shortens aging periods, at the cost of less time for oxidization: Reservoir tosses more stock, and cuts deeper into distillate runs, than is typical.
Drinking younger whiskey can also be a fun exercise in noting growth and change.
“There are some products out there that are good at three years old,” says Heilmann of Michter’s. “With some of the younger whiskey, the quality is there, but it’s just not mature yet. I think it’s interesting to try these products to see the progress they make. I’ll try them when they’re one year, three years, and then five years when they’re wonderful. The whiskey does change immensely in the bottle.”
Look for more innovative distilleries like Rabbit Hole and Reservoir to put out younger product that’s not sharp and overly grainy like most underaged whiskey, but more smooth and flavorful.
4) ‘White Whale’ Whiskeys Remain Hot
While the ‘white whale’ craze has worn off in craft beer — thanks to brand proliferation, meaning top-shelf brews are more common and easier to obtain — it’s still a major factor in whiskey.
Today’s consumer has never been more curious, more willing to experiment. They try a little of everything. Problem is, in the brown spirits boom, many top whiskeys are now harder to find than ever.
Want Pappy or Buffalo Trace Antique Collection? Better check out the secondary market, and prepare for the prices to wallop your wallet.
Even hot brands under $100 have become difficult to track down. Non-Antique Wellers fly off the shelves, as do Blanton’s Single Barrel and other whiskeys that have garnered loyal followings within online tasting communities. Some stores will jack up prices for these hot items, asking not far from what they’d fetch on the inflated secondary market.
It’s a cycle of escalating costs that shows little sign of slowing down.
How do distillers feel about this?
“We want our products to be out there and available for consumers, so we price them accordingly,” says Heilmann of Michter’s.
Limited-edition bottles of Michter’s can fetch thousands of dollars, sometimes five figures, on the secondary market. “We have no control over that. It’s not something we are promoting,” Heilmann says. “Though obviously we see it and are honored that someone would spend that much money on our product.”
“Though we also do like when we see our 20 Year Old at an on-premise account, where everyone can get a pour for $50, rather than pay secondary-market prices for that bottle,” Heilmann adds.
Agreeing with her is Yelle from Campari and Wild Turkey. “When bottles of Master’s Keep make it to the secondary market, they blow up in price,” he says. “But we remain focused on selling whiskey that is accessibly and appropriately priced. We’re excited to see consumers so engaged with our brand and hunting down rare bottles — though I wouldn’t recommend paying six times what you should for it — but we are happy to see the consumer passion.”
Which is all to say that whiskey prices will likely rise in 2019, especially for trendy brands.
5) More Unique Barrel Finishes and Mash Bills
Barrel finishes like sherry, rum, cognac, cabernet sauvignon and more are win-wins for distillers. “I think it’s fun. It allows you to explore and provide different alternatives for consumers,” says Yelle.
When distillers exercise their creative juices, it leads to more options for consumers. And consumers have never been more willing to experiment. There is enormous demand today for diversity in flavors, and barrel finishing is an effective manner to meet that need.
“Any time there’s another way to create a different flavor expression, people are going to do it,” says Dietrich of Stranahan’s. “And there’s a lot of used barrels out there available now for finishing. The sky is really the limit. There are more grey areas, more room to maneuver as a producer.”
Mixing up mash bills with unique grains is another way that producers can offer more different flavors. When Heilmann of Michter’s previously worked at Beam Suntory, she was behind mash bill experimentations that became the brand’s Signature Craft series, featuring rare oats and wheats. Now Heilmann anticipates similar innovations coming out of Michter’s.
“A lot of people are experiencing with mash bills and other production techniques right now,” she says. “There are so many variables that the possibilities are endless. Have you ever tasted two bourbons from different producers that taste exactly the same?”
The answer is no. Which is why brands will roll out more unusual barrel finishes and mash bills in 2019.
6) Characters and Stories Sell Brands
What’s a whiskey without an interesting story? Brands today talk about old recipes rediscovered in grandma’s attic, entrepreneurs who ditched Wall Street to follow lifelong whiskey dreams, Prohibition icons whose names now grace bottle labels, or a million other ways to differentiate all these new whiskeys.
Why does this work? Why do consumers care?
Stories connect with potential purchasers in a way that colored liquid in a bottle cannot. “The truth is that stories have always been important in whiskey,” says Erisman of New Riff. “Look at Elijah Craig and Jim Beam, the real-life people behind those old classic brands.”
These category pioneers were the stories behind American whiskey for many years. The next-oldest brand-founding story that generates a ton of attention, Erisman argues, is the Samuels family with Maker’s Mark in 1954.
“Think about how many whiskeys have the name ‘Old’ in their names, like Old Crow, Old Forester or Old Weller,” Erisman adds. “We’ve been living with these brands so long now that their stories have ossified and codified into something we all know. The old stories were, quite simply, the only stories.”
“So when all these new distilleries came out, they all needed to find new stories too,” Erisman adds. “Folks have decided, ‘Don’t we need a story? Isn’t that the way it’s done in bourbon?’”
Unfortunately, this has also led to brands stretching the truth about the origination of their liquid. Or taking names and likenesses of historical characters with questionable and violent pasts.
But it’s been great for older brands that already boast larger-than-life characters. Like Wild Turkey and the legendary Russell family. “It’s one of those things that previously people did not care as much about,” says Yelle. “But now there’s a greater need for consumers to know where the products they buy came from. It’s now a natural part of the human inclination to track down where these stories came from.”
7) Consumers Now Care About Production, Too
Consumers who want to know the origin stories and characters behind brands have also become more interested in advanced production techniques.
“I go out in the market now and am amazed at the questions I get from consumers,” says Heilmann of Michter’s. “They’re so technology-savvy now. They want to know how we make our whiskey, and why we use certain techniques.”
“It’s pretty different than it was in the past,” she adds. “People in the past were more willing to accept whiskey as it is. They didn’t take their knowledge as deep. Now we’ll tell them how we enter all our products into barrel at 103 proof, and explain what that does to the end product, and you can see the recognition in the consumers’ eyes. You can explain scientific aspects like polyphenols and it still resonates with consumers. They get it. They’re so much smarter now. ”
The next production technique that might catch consumer eyes is premium barrels. Many distillers distinguish their products through premium cooperage techniques. Michter’s only uses barrels that have been toasted before charring for more flavor and color in the final whiskey. New Riff does the same, and also air dries their barrels for up to three years, rather than the more standard 24 months.
“The cooperage industry has really responded to the call for innovation,” says Erisman. “I think we might see more consumers wise up to solid, good coopering. They’ll learn the difference from the crummy or basic barrels of massive Kentucky distilleries.”
8) Balance Between Blends and Age Statements
For a moment it looked like age statements might become old-fashioned, the numbers written on grandpa’s dusty Scotch bottles. Brands racing to keep up with consumer demand put out high-end blends that relied on flavors and branding — rather than stated age — to capture consumer attention.
And it worked. “Blended” is no longer a dirty word in the whiskey world. Consumers (Millennials especially) care more about how a whiskey tastes and where it came from than the number that graces the label. For that reason, look for more artisanal blends to hit shelves in 2019.
“Blends are just a different way to satisfy consumer demand,” says Yelle of Campari/Wild Turkey. “Over time the consumer has become more educated. They will find their way to products that fit with their palate, whether they have age statements or not.”
Still, reports on the death of age statements were greatly exaggerated. As many brands zigged towards blends, other zagged and double-downed on age statements. Others simply continued to support their existing age statements at the same time that they also produced blends.
“Age statements remain critical to help some people navigate the category,” says Yelle. “The removal of age statements became a reality because the bourbon category became so hot that you didn’t necessarily always need them. But they are still critical in some aspects. We put out our Russell’s Reserve 10 Year Old with pride because that name helps consumers validate that purchase.”
Overall the American whiskey category should enjoy boom times for many years to come, thanks to an immense passion for these products among the U.S. populace.
“I’m really excited about where we’re at and where we’re going,” Yelle says. “There’s an alignment with consumer demand and what we want to put out there. The industry and consumers are lining up in a way that will lead to better drinks while making the whiskey industry a great place to be right now.”