The Great Whiskey Shortage of 2013

By Erik Tennyson

When I started working behind the bar in 2004, the Bourbons were dusty ornaments standing on a shelf only the tallest bartender could reach. The lone bottle of rye was locked in a rusty cabinet next to a garbage can, behind other exiles like Galliano and Tia Maria. These were the dark days of flavored vodka and Appletinis. That year, in an effort to make their spirit more palatable, Jack Daniels lowered its alcohol level from 86 to 80 proof and the world yawned.

Times have changed. Bourbon's now massively popular both at home and abroad. The Distilled Spirits Council reports that, over the past six years, whiskey sales in the super-premium category (bottles that sell for above $15 wholesale) rose over 97 percent. In February, Maker's Mark announced that the company was going to stretch out its declining stock of whiskey by lowering the proof from 90 to 84—slightly diluting it with water. The Bourbon drinkers of the world united in rebellion, and the social media sites of Maker's were blitzed by irate patrons who prefer to add water to their whiskey only if and when they want to. In February Maker's backed off, apologizing to its loyal fan base. The whiskey would live on unmolested.

The amount of whiskey that's ready to bottle isn't based on the current market, but on what demand was six-plus years ago. Unless distilleries were remarkably prescient, their supply simply can't match the demand.

Yet the problem remains, and not just at Maker's Mark: More and more people want Bourbon. Kentucky has more Bourbon barrels than people, but quality Bourbon usually ages more than six years to acquire its signature oak-char character. So the amount of whiskey that's ready to bottle isn't based on the current market, but on what demand was six-plus years ago. Unless distilleries were remarkably prescient, their supply simply can't match the demand.

Tuthilltown Spirits, which produces the Hudson whiskeys in Gardiner, New York, offers one possible solution. By using barrels ranging in size from three-gallons up to the standard 53, they increase the exposure of the whiskey to the wood, imparting oak character more rapidly.

Others have taken a more radical approach to battle Father Time. Cleve­land Whiskey throws six-month-old Bourbon into a pressure cooker with oak staves. The Terresentia Corporation, meanwhile, uses a proprietary process to introduce oak flavors into young Bourbon, then blasts the heated spirit with ultrasonic energy. The company claims that this process ages the spirit, ridding it of cogeners and converting harsh acids to smoother-tasting esters. And if the spirit loses some of its flavor in the process? There's a "master blender" on staff to deal with all flavor and color needs. On a video on its website, Terresentia assures consumers that they don't add anything that isn't permissible by the government, just "a little sugar, or a little citric acid." But is this whiskey or whiskey-flavored vodka? And with the current emphasis on all things organic and artisanal, can this really be the future of Bourbon?

Recently, the folks at Buffalo Trace Distillery, makers of the long-aged, elusive Pappy Van Winkle Bourbons among other bottlings, felt the need to address the whiskey shortage in an open letter on their website, informing consumers that demand is indeed up and stocks are down. For now, that means the whiskeys will remain heavily allocated and hard to find.

Kris Comstock, the Bourbon brand manager at the Buffalo Trace, says the challenge for the company now is predicting how much whiskey to produce for the future. "I'm now making whiskey for Pappy Van Winkle 2036," he says, referring to the Pappy Van Winkle 23-year-old Bourbon. "No matter how much we make, it won't be right. 2036? Where are you going to be in 2036?"

In the meantime, as the distillery increases production to keep up with the growing demand, the distillers are investigating the Bourbon aging process itself. "We've done a lot of experiments with wood and mash bills and grains already. We have a new research project to help us understand how Bourbon ages," Comstock says. They're building a new four-chambered warehouse that will allow them to control aspects of the aging process such as temperature, humidity, sunlight and airflow.

Currently Buffalo Trace is sitting on more than 1,500 barrels of experimental whiskies. They've worked with smaller barrels, but didn't like the results, finding that they produced a whiskey that, although full of the wood char flavor of a traditional Bourbon, lacked the wood sugar levels to give it depth of flavor. They've even been working with French oak instead of the usual American. Last year they released two whiskeys that aged in 135-gallon French oak barrels, a 19-year-old and a 23-year-old. French oak, too, seems to take its sweet time.

This article first appeared in Wine & Spirits December 2013.