There’s always so much frustration, disillusion, and utter despair when it comes to the pricing and availability of rare whiskies, primarily Bourbon because wholesale costs have remained incredibly low relative to demand.
A Bourbon that may only cost the retailer $40 per bottle can end up selling for $400 or more, which makes bottle hunters furious.
The problem for retailers, however, is that the $40 cost of the bottle often comes with a $10,000 minimum purchase for other products from the distributor.
For those of you who hate bundles, and don’t want to purchase the regular Elijah Craig Bourbon and rye whiskey just to get a bottle of Barrel Proof, I have four words for you: welcome to the club.
As a retailer, that’s what we’re forced to do. Bundle. Every single day. Either buy the rest of the book, or kiss your allocations goodbye.
There is no allocated whiskey purchase without a minimum commitment to carrying other items from that supplier. Normally that’s not an issue, so long as customers keep buying those other core products. Yet, as of late, there’s been a tremendous slowdown in basic Bourbon consumption because more and more customers are narrowing their focus to the latest rare allocation.
As much as I try to explain the nature of this relationship to customers, there are always those guys who complain. “But mature, cask strength Bourbon is what I really like! I don’t want to have to buy a bunch of other stuff that I don’t want!!”
Wouldn’t that be nice? I’d like to drink DRC Burgundy all day long, but unfortunately that’s not an option anymore either. We’re in a new era. If you’re not pulling your weight across the portfolio (both as a retailer and a customer), then you’re dead weight.
I was speaking to a friend in the business earlier this week who’s in charge of wine allocations for a supplier. Every now and again, you find a small boutique wine shop that only carries fancy wine, and doesn’t bother with the everyday stuff.
He was telling me that one particular store was asking for an allocation of his rarest wines, but didn’t want to purchase anything else from that particular producer. My friend responded by saying: “I can’t give you an allocation unless you support these other brands.”
The store buyer laughed and said: “But we only sell high-end wine! We don’t sell $20 bottles in our shop.”
To which my friend replied: “Well then I guess you won’t be getting an allocation.”
When you’re a retailer used to getting your way without putting in the effort, I can imagine it’s a bit shocking to be told something like that by a vendor.
But, like I said, this is a new era. I can imagine customers feel the same way.
-David Driscoll