It Turns Out You Do Need People

Someone asked me the other day: why are more and more wine and whiskey retailers advertising pre-orders rather than in-stock items?

Simple answer: they’ve located new products to sell, they just don’t have them yet.

If there’s one thing people continue to spend money on in the COVID era, it’s booze. There’s nothing like a little retail therapy escapism to help get you through the day (and a little whiskey to get you through the night). E-commerce for wine and spirits has showed no signs of slowing down either. Since I started at Mission a year ago, our online sales have more than doubled. Granted, I’ve played a role in that, but it’s further proof that the demand exists.

Yet, if you read the news about Zillow this week, how they’ve had to stop buying houses due to a lack of manpower, it creates a clearer picture for the future of all e-commerce with the current supply chain issues. It turns out you can’t keep flipping houses if you start running out of remodeling supplies and manual labor, just like you can’t keep shipping bottles of alcohol without dock workers, truck drivers, and people to pack the boxes.

Despite our desire for limitless growth, there are indeed limits to the potential scale of e-commerce. Even if you have the capital to purchase more goods, and the connections to source new products, it’s all moot if there’s no one available to facilitate the supply chain.

And guess what? More and more people have decided they’re tired of being a cog in that machine. Talk to any retailer in the booze business and they’ll tell you the same thing: open positions are going unfilled, while longtime employees are walking out. Where will they go? Who knows? But if there’s one thing I’ve realized myself during the last two years, it’s that life is short and you have to make the most of what time you have left. In my humble opinion, we’re at the beginning of a budding blue color revolt, wrapped inside an existential crisis that—coupled with climate change—is going to define the upcoming decades.

Despite the shortage of workers, business owners and marketers continue to have tunnel vision. They don’t want to slow down, especially when the market continues to show signs of growth, so they continue to sell, even when they don’t have the product on hand or the means to take possession of it.

So, in short, start getting used to pre-orders and longer wait times for new products.

-David Driscoll

"How Much Are We Supposed To Spend To Stop People From Buying Our Products?"

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I’m going to gift all you non-NY Times subscribers this article right now so you can read about what bots have done to the sneaker industry.

Online retailers have to do more work to prevent the wrong people from buying their merchandise. Best quote from the article:

“It’s depressing to think about,” Mr. Gordon said. “At some point, you have to ask, ‘How much time are we supposed to spend to stop people from buying our products?’”

-David Driscoll

Impromptu Instagram Live with La Palina Cigars

Since I was lucky enough to have my good friend Matt Freerks in town this week, training the Mission staff on the makeup of a great cigar, I decided it was also a good idea to give our customers a bit of that experience, as well. We sell a TON of La Palina cigars at Mission because they’re fantastic products, but also because Matt is such an amazing educator. His passion for this industry is infectious, and I’ve learned more from him in the past year than anyone else about what is—without a doubt—the most exciting sector of the vice business right now.

-David Driscoll

Shadow Inflation in the Bourbon Industry

There was an article in the New York Times this week about what’s called “shadow inflation”: the idea that, even if prices aren’t going up, you’re not necessarily getting what you think you’re paying for given the decrease in quality or service.

The author, Neil Irwin, posits that the effects of inflation aren’t “just the prices you see and the numbers that are fed into economic models, or the news headlines and central bank inflation targets. It’s also that a given amount of spending buys experiences that are a little less satisfying, and that this adds up to an accumulation of frustrations that don’t necessarily show in the numbers.”

Now that I know there’s an actual term for this phenomenon, let’s talk about how shadow inflation has been rampant in the Bourbon industry for years.

One of the points that serious Bourbon enthusiasts like to bring up when confronted with price gouging at the retail level is the fact that Bourbon wholesale prices have remained relatively cheap compared to their market value. It’s a big reason the industry maintains such a loyal following.

Yet, because of those low wholesale prices and a lack of general availability, retail prices can fluctuate greatly. As an example, a bottle of Blanton’s should only cost you around $50+ or so given the standard retail mark-up over wholesale cost, but it might run you as much as $200 depending on where you shop.

When price gouging happens, Bourbon collectors blame the retailer for the greedy and unfair “inflation” on their favorite hard-to-find bottle. They know what the price should be, hence they know when someone is taking advantage of them.

But here’s what you might not know: American whiskey companies and their distributors have long been tying the purchase of other bulk spirits into the allocations of their most coveted labels, completely changing the investment requirement for a small retailer looking to carry an exciting selection of whiskies. Fifteen years ago, a retailer could order any Bourbon whenever they wanted it—no strings attached. Today, however, these bottles are packaged with a number of non-Bourbon products that most retailers don’t want and don’t need.

My question is: now that a case of allocated whiskey is tied to the purchase of an additional fifty cases of bulk spirits, what’s the real wholesale price of the bottle?

Granted, so long as the company can sell those additional bulk products for a profit in a reasonable amount of time, then the wholesale price is actually the price on the invoice. That’s why you see big box stores like Costco and Total Wine sticking to their standard mark-ups across the board. Absorbing a large drop of bulk goods is no issue for them, as they have the traffic to move those bottles.

But for a smaller retailer, tying up dollars in inventory that doesn’t move just to get six bottles of a rare American whiskey doesn’t necessarily add up. Hence, the retail prices you’ll find in their establishments often reflect that additional investment cost. While I can’t speak for all small retailers, I can say for certain that what some Bourbon customers consider price gouging is often times just the Bourbon industry’s own version of shadow inflation.

So why don’t Bourbon companies just raise their prices to reflect the market demand? Because raising your prices makes customers angry, which is the root cause of shadow inflation covered in the article. As Irwin writes: “Many types of businesses facing supply disruptions and labor shortages have dealt with those problems not by raising prices, but by taking steps that could give their customers a lesser experience.”

From a marketing perspective, it’s much easier to keep your wholesale prices the same, and force retailers to purchase additional products to help grow sales companywide. That way customers will continue to sing the praises of the blue-collar American Bourbon industry and their commitment to the common man, while demonizing the retailers who succumb to the perils of Bourbon’s own shadow inflation issue, ruining it for customers who are just trying to pay an honest price.

In my personal opinion, it’s a chicken shit way of dealing with the issue because it puts the blame on small business owners who are simply responding to the rules laid down by the producers and their distributors. I’m not a fan of price gouging, nor will I ever defend it, but if more consumers knew what was required from a purchasing perspective to secure even the tiniest allocation of rare Bourbon today, it would make their heads spin.

-David Driscoll

High & Low

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I’m a big proponent of what’s called high/low fashion; the idea of combining something luxurious or expensive with something basic and simple.

As an example, I might wear a pair of grey Vans with an Armani suit jacket. Or I might wear a Rolex with a pair of Levi’s and a baseball hat. When done well, there’s no better juxtaposition, but it requires confidence. Many folks who spend money on clothes don’t really understand fashion, so they just go for the high end, ignoring the low. They buy the most expensive stuff out there and let the labels do the talking, figuring: if I’m wearing Gucci, I must look good, right?

High/low fashion works for food and booze, too! As an example, my wife and I went out for dinner this past Sunday at Firefly in Studio City, where we drank fancy cocktails, fancy wine, and ate filet mignon. However, rather than get dessert, my wife mentioned she had been dying to try the new mini tacos from Jack in the Box. Maybe we could hit the drive-thru on Laurel Canyon on the way home?

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Having not really scratched my frites itch, I threw in a large fries order, as well. We were all dressed up, full of fine drink and cuisine, munching on tiny tacos and greasy potato strings as we cruised down Magnolia on the way back to Burbank. I highly, highly recommend the new Jack in the Box mini tacos, especially since you can order mild, hot, or extra hot. They were the perfect end to a fantastic evening.

High/low booze? Champagne and potato chips, y’all. A classic. I recommend doing that as often as possible.

Whisky and chocolate is another good one. I once drank a 30 year old Port Ellen with a bag of M&Ms.

Fancy Bordeaux with a Tommy’s burger. I’ve done that at least ten times this year. Fancy Burgundy with Cane’s chicken fingers. Done that, too.

Most people always look to pair high end with high end, which is also fun. But it’s not always necessary. Don’t be afraid to mix it up. The greatest highs are usually accompanied by the greatest lows, in my opinion—in a positive way, in this case.

-David Driscoll

Attention & Affirmation

As an only child who still struggles with long-standing embarrassment caused by the emotional immaturity of my youth, I’m well aware of how a pathological need for attention and affirmation works. When you’re too caught up in your ego to recognize how your behavior effects others, it’s never a good thing.

The person at the party who has to be the center of attention? Been that guy.

The person who needs to hear he did a good job to know he did a good job? Been that guy.

The person who can’t be content with success unless he tells someone else about it? Been that guy, too.

That’s why when my friend Luis sent me this video yesterday about Bourbon hunters, I laughed out loud; especially when my other friend Brian said to me: “I’ve been all of those guys at some point.”

The thing about emotional maturity is that it requires you to recognize painful truths about yourself, and then ultimately laugh about them. If you can’t do that when confronted with an honest look in the mirror, then you probably have a difficult time making friends as an adult.

Which brings me to another type of Bourbon hunter: those who need attention and affirmation from those in the industry. For some reason, guys who are really into chasing down bottles of rare Bourbon like to send me photos of their hauls, or email me details about all the stores they went to while doing so. They’re looking for me to respond with: “Awesome!” “So Cool!” “Wow!”

But it’s ironic because I don’t think it’s cool at all. No retail buyer does.

Yes, retail buyers enjoy talking to people about whiskey. We like whiskey. We like drinking whiskey. But we don’t like customers who hoard whiskey because ultimately they take bottles away from other customers we’re also hoping to please.

Someone said to me this week: “Hey, I walked into the store yesterday and saw you had ___________ on the shelf, so I completely cleaned you out!”

I guess this person wanted me to be thankful? Well, I’m not.

When it comes to allocated bottles, consumers aren’t doing retailers any favors by spending additional dollars on super limited releases. Those bottles are what bring people into the store. Buying up a store’s allocation for yourself means you’re disappointing that retailer’s other customers, who will now go elsewhere for their fix.

Hence, by hoarding one store’s allocated supply, you’re actually killing their business, not helping it (especially when you turn right around and sell those bottles for your own profit). Spending $10K on Blanton’s and Weller without ever buying another bottle doesn’t make you a good customer; it makes you a parasite.

So when someone sends me a photo of their Bourbon haul, loaded with rare finds they managed to secure by pillaging some retailer’s shelves, I’m not impressed. I’m repulsed.

But the need for attention and affirmation often blinds those too caught up in their own emotional needs to think about the feelings of others. I’ve definitely been that guy, too.

-David Driscoll

Instagram Live Repost: French Sparkling Wine Super Value Faire La Fête

We’ve been selling Faire La Fête Brut and Rosé like they’re made out of gold since the sub-$20 sparklers hit our shelves in late August. 500 bottles in the last 30 days.

The question is: why?

That’s why I grabbed Faire La Fête manager Charlotte Holl to talk about the Champagne-level production quality that goes into the wine for a fraction of the price.

See for yourself.

-David Driscoll