November 29, 2013

At $4,000 per bottle, new Kentucky whiskey tops the top shelf

By Bruce Schreiner
The Associated Press

LOUISVILLE, Ky. – A new whiskey created in Kentucky features a blend of age and scarcity that spiked demand — and its price.

click image to enlarge

Michter’s Distillery master distiller Willie Pratt pulls a bottle of Michter’s Celebration Sour Mash Whiskey from its gift box in Louisville, Ky.

The Associated Press

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The limited release will be available starting Monday at select liquor stores, restaurants, bars or hotels in several U.S. cities.

The Associated Press

As a result, whiskey fans including celebrities and corporate chiefs are angling to snatch up limited stocks of Michter's Celebration Sour Mash Whiskey for nearly $4,000 per bottle. Shots won't come cheap, either, fetching an expected $350 a pop.

Limited-edition offerings, with heftier prices than typical stocks, have become commonplace as American whiskey makers dabble in new flavors to lure customers. But the latest introduction by Michter's Distillery LLC breaks into a pricing stratosphere that could reverberate across the industry.

"This is kind of new territory," said industry observer F. Paul Pacult, editor of the newsletter Spirit Journal.

"It's going to start a whole rush of interest in very high-end bourbons, American whiskeys and American spirits. This kind of throws the challenge out."

The Michter's product will reach shelves Monday in select liquor stores, restaurants, bars or hotels in such places as New York, Los Angeles, San Francisco, Aspen, Colo., Chicago, Palm Beach, Fla., Houston and Boston. The company produced a scant 273 bottles of the blend of whiskeys, some aged up to 30 years, and all are spoken for, its top executive said.

"We've been turning down orders," said Michter's President Joseph J. Magliocco.

Willie Pratt, master distiller at Michter's, blended the whiskey from his favorite barrels, Magliocco said.

Christian Navarro, president of Wally's Wine & Spirits in Los Angeles, plans to sell the product for $3,600 per bottle, more than he paid for his first car.

He had at least five takers for each of his bottles, with movie stars and rock singers among those vying for the limited supply, he said.

"They said, 'I'll pay you in advance,'" Navarro said, adding: "I can't get enough of this product."

The introduction adds a new twist to the growing super-premium whiskey market. The Celebration bottles are embossed with gold labeling, part of the elaborate packaging by Michter's, a small, Louisville-based company known for its premium bourbons and rye whiskeys starting at $45 per bottle.

The company is in the process of expanding its small distillation capacity. Currently, it makes most of its whiskey at another distillery, using Michter's recipes, with its older whiskeys coming from stocks it bought up.

Typically, prices for limited-edition American whiskeys topped out at a few hundred dollars per bottle, though Michter's does offer a 20-year-old bourbon that sells for $600 a bottle and a 25-year-old whiskey that retails for up to $700 a bottle. That pales next to the select single-malt Scotches, cognacs and brandies aged for decades, which can fetch tens of thousands of dollars per bottle.

Pacult said the introduction reinforces a trend showcasing the rising quality of American distilling.

"Up until just about 10 or 12 years ago, American distilling was looked upon as kind of the idiot stepchild of Ireland and Scotland and France," he said. "But now we're seeing that's not the case at all. Perhaps the most exciting innovations are now being made" in the U.S.

Stocks of 20- or 30-year-old American whiskeys are extremely limited, as larger whiskey makers typically tap into their barrels much sooner to try to keep up with demand.

The bourbon sector's focus has been on churning out higher-end products, led by small-batch and single-barrel bourbons. Jim Beam, the world's top bourbon producer, plans to launch a single-barrel offering next March. The makers of Wild Turkey, Evan Williams and Woodford Reserve rolled out special selections in recent years.

U.S. sales for super-premium whiskeys shot up 94 percent within a decade — from $741 million in 2003 to $1.44 billion in 2012, according to the Distilled Spirits Council of the United States, a Washington lobbying group. Sales for the entire whiskey category grew 47 percent, from $4.3 billion in 2003 to $6.3 billion in 2012, according to the group. The category includes bourbon, Scotch, and Irish, Canadian and Tennessee whiskey.

Some buyers see hard-to-get spirits as solid investments, given the popularity of American spirits at auctions.

"Just like people who collect baseball cards as kid, there are those who are collecting whiskeys as adults," said Jonathan Goldstein, vice president of Park Avenue Liquor Shop in New York.

Others want to build up collections for sipping later, or to hold on to the spirits for special occasions, like their children's weddings. If the bottles rise in value, they might be tempted to sell them — to pay for the weddings, Goldstein said.

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