In the throes of increasing pricing pressure on all manner of items from teepee to tictacs, the bourbon business is and has been in the crosshairs of consumers ever-increasing discretionary spending pullback this year. Just like everything else that’s sitting on the shelf, distillers equally are experiencing pricing pressure that in turn results in having to raise the costs of their product. In an interview just a few weeks ago with Big Stick Bourbon President Mike Ryan he discussed how their brand had seen shipping costs jump nearly 3x and with a backdrop of other inflationary pricing found it difficult to hold steady on their shelf cost for their product. While retail pricing is getting pushed on all sides, squeezed to a point where increases are either happening now or will be happening in the future, rather interestingly the opposite is happening on the secondary market. In today’s post we’ll dive into this in greater detail and look at some interesting trends across a number of allocated bourbons.
For all the jack-jawing that the secondary market gets, the retail business often feels much worse. Over the past number of years, I can’t even tell you how many liquor stores I’ve walked into across the country and experienced what many refer to as “museum pricing.” Those kinds of prices that leave you wondering a) who’d pay that? and b) how’d they come up with that number?!? There’s no greater turn off to me personally as a bourbon drinker than to see an asking price that is multiples over what often is already an inflated number on the secondary market. The disparity in pricing across all platforms where bourbon can be procured from online flippers to brick-and-mortar stores highlights the significant value of accurate pricing information to help make informed decisions. I’d suggest that knowing the “retail” value is of limited value in today’s market, understanding the most recent range of secondary pricing helps set a ceiling that will ensure you’re in the right ballpark when making a purchase and not find yourself having shot the moon.
As of writing this post, the secondary market is down nearly nine percent since the start of the year according to the Bourboneur Secondary Market Index where we track weekly pricing of some of the most commonly traded bottles of brownwater. Essentially if you had the 30 bottles that the index is based around at the start of the year, those same bottles would be worth nearly one thousand two hundred dollars less today taken as a whole. The below chart provides an view of market trends for every week that has transpired this year to date. The index excludes recently dropped bottles to eliminate the need to equate for the Bourbon Hype Pricing Curve.
The fact that we're seeing prices on the secondary come down so much is not that there are more bottles hitting the market, there’s just fewer dollars rattling around in people's wallets that they want to allot to discretionary purchases such as allocated bourbon. I’m sure that if you ask the general person if they’d like to pay less for bourbon, the answer is always going to be yes, but by in large there’s been a decent pull back in the secondary market, and as you can tell from the graphic, that pull back is still searching for a floor to land.
Let's dive into a handful of examples that demonstrate how dynamic consumer interest is in the market today. Let’s talk about some of the bottles facing headwinds on pricing first. A couple weeks ago, a buddy was looking to buy a bottle of Elmer T Lee, a favorite pour of his. He noted that, unsurprisingly, it was impossible to locate out at any store. A friend of his was able to find one however just a week prior and paid just north of $350 for it. Was that a good price? That may have been a good price once upon a time, but not today. Below you can see how Elmer T Lee has performed on the market this year, down a touch over twenty-three percent year-to-date. My buddies buddy got a bottle, but, for that price could have probably gotten two on the secondary market. He wasn't whiskey wise, and clearly wasn't making informed decision using the Bourbon Blue Book®.
Looking at another couple of Buffalo Trace bourbons lets drill into two of the more popular secondary sellers Weller 12 and Weller Full Proof. Over the course of this year, we have seen Weller 12 decline by just over sixteen percent and Weller Full Proof decline nearly nineteen percent. At one time, Weller 12 was actually more than Weller Full Proof – a first for these bottles. We’ve since seen pricing continue to decline but again peel away in the spread between the bottles, with Weller 12 settling into a more logical price point given the ongoing drop of Weller Full Proof.
Of course, this trend isn’t limited to Buffalo Trace products, and a great example is Willett’s 8 Year Wheated offering which has been hammered in terms of what people think of the bottle and its associated price point. At a local allocated bottle raffle, the store had these left over, they just couldn’t sell them for what they were asking. The value on the secondary market of these bottles have fallen dramatically this year, trading hands for nearly twenty five percent less now than they did when the year started. There's no love to be had for "the other purple top."
Amidst a backdrop of falling prices though there are some winners, bottles that despite the headwinds in the market have found a way to build up steam and increase in value. Perhaps one of the more notable standouts is Parker's Heritage 2022 Double Barrel Blend Bourbon which has risen in value nearly twenty percent since the start of the year, having added a hundred dollars onto the asking price. This isn't static across the brand, but certainly a number of other bourbons that carry the Parker's label have also enjoyed some uplift in pricing since the year started.
Data matters and having up-to-date and reliable information to make informed decisions about buying, selling or trading coveted bottles of brownwater is critical. Although there’s a number of apps out there that provide pricing, it often times is only the MSRP or provides a range of values that doesn’t reflect the reality of the market, which as you can see changes regularly! As we highlighted in a recent post contrasting the data quality between multiple apps is quite revealing and underscores the value of what Bourboneur® provides. In the past week we pushed updates to the Bourbon Blue Book® five of the seven days, as we saw aggressive changes in pricing across numerous releases, including Parker’s Heritage’s recent release, Old Forester’s 2024 Birthday Bourbon, Booker’s two new releases, Four Roses 2024 Small Batch Limited Edition, etc. The secondary market doesn’t stand still and neither do we in cataloguing and providing the web's most accurate, reliable and up-to-date pricing around.
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