That nice, full Whiskey barrel is like a tooth and the tooth fairy; except when you leave it under the pillow twice as long you get much more. The pillow is the rickhouse though, in this case.

Is it just Buffalo Trace because of Pappy? Don’t think so. When one considers that Weller 107 is now NAS and six, not seven years, slow elimination or unavailability of Weller 12, Heaven Hill’s Elijah Craig’s 12 will be getting costlier, Elijah Craig 18 no longer being bottled, Elijah Craig 20 at $120, and soon-to-be-released Elijah Craig 21 at about $175 (current price at visitor center), I’m drawing some conclusions that age statements will become a rich-man’s luxury.

Eliminating age statements on the lower and mid-price levels will let them go two times to six times the price on bottles having age statements at high price levels. Elijah Craig (EC) 12 year is currently $22-$26 a bottle, so let’s call it $24 average. That’s $2 per year. Elijah Craig 18 YO was $29.99 on special in January 2012. Granted, this is a very good price ($1.67) per year. Heaven Hill was way too late to the party to raise the price, then discontinued it altogether a year ago. It’s important to point out the Visitor center has begun carrying the 18 year again at $90 ($5 per year, up from $1.67 in a year).

The LTD EC 20 is now is $130. That’s $5 per aged year (18 year) vs $6.50 per aged year (of 20) and that’s just waiting 10 percent longer—two years for almost twice the profit. Pretend that the 12 is half of 21 (for whiskey years). In that case, it’s $8.33 per year or 4 times the per-year cost of 12. I paid $70 for my Jeff 18 and can still get it for that; Jeff 21 was released at about $130 each. That’s almost doubled for 3 years more age at $6.19 vs $3.89 per year average.

The Ultra Premium Whiskey category is responsible for around 80 percent of Bourbon growth vs less than 10 growth growth for lower end brands. Add the huge profit multiplier, and age is money. It’s hard not to conclude that in five years if you want an age statement of more than 8 years, you’ll pay for it. By not including an age statement (there may be a production or supply reason) they lose the implied quality and price justification of having an age, especially for 8 and up. 12 years will become today’s 18 in the not too distant future. They are essentially devaluing age to justify huge price increases to have an age statement that increases very fast.

Let’s look at the new alcohol by volume game too. EC12 is 47 percent ABV at $27 vs EC12 Cask Strength at $40 at 67.1 percent ABV. The Cask Strength is 48 percent more expensive for 20 percent more ABV. Russell’s Reserve just did something similar: They’re charging $34 for 45 percent ABV 10 year Bourbon, and $47 for 55 percent ABV for Russell’s Reserve no age. That’s 38 percent higher cost for 10 percent more ABV. So this is a trend perhaps, and don’t forget shipping cost is cheaper.

One does need to consider two key things when you’re getting to the older stuff: the ABV and barrel yield. A 140 proof Stagg can technically yield almost twice as much at 80 proof. Also the average barrel loss/angel’s share is about five gallons the first year, then one to two gallons a year (2-4 percent). So in 20 years, 70 percent might be the average loss. Some barrels are empty and all you have to show for it is 20 years of taxes paid. So to be fair, this also needs to be figured into these calculations.

If a 15 year old barrel that’s lost 50 percent is going to wait another five years with mileage left, can the distillery stop Father Time and the angels from stealing more? Yes: keep the barrel from getting hot. This is why a Pappy 20 or 23 doesn’t consistently rate better than a 15. Most of what good the barrel has to give has been exhausted and the goal is not to let it go over the hill or lose more. Back to keep it cool: This is why I’ve heard numbers that less than a few percent of the barrels past the 9-12 sweat spot survive or get better with age while ultra aged 15-23 are less than 1 percent of barrels, and that may not mean they get better, only that they don’t get too bad. So another look at Pappy. Forget availability and let’s go with suggested retail price.

In my area 12 year is $60—or $5 a year; 15 year is $75—$5 a year; 20 year is $120—$6 a year, and 23 year is $240—$10.50 a year. Hardly anyone that has a clue likes 23 more than 15 or 20. Blind, the 23 rarely wins. BUT, due to the age statement, it sells for about 100 percent more for about 10 percent more time (than the 20), when it’s not as good and the last 5-8 years were trying to get the barrel to go to sleep.

Again, to be fair, the 23 is a dwindling supply of the last of Stitzel-Weller juice that has all been bottled by this point. Julian has said this. What’s now aging to become 23 has been put in the places to slow the process down. Bottom line is we aren’t paying for anything but an impression that the 23 is better because it’s older.

I guess the same logic is used when you go into the Cannon Bar in Seattle or others with pre-prohibition stuff that costs $500-$1,000 a pour. Assuming it is the real deal, which is a big assumption, as dozens of people that had access to the bottle would have to have NOT messed with it. That’s a stretch. Big stretch. Rarely would someone tasting blind think it was better than a modern gem. This is when an age statement becomes nothing more than a decoration and novelty of perceived value. You want to be driven to a wedding in a 1935 Silver Shadow Rolls? It’s going to cost more than being driven in a new one, and it isn’t necessarily a more enjoyable ride. Buying a perfect 1963 Corvette vs. a top-of-the-line loaded 2014 is oddly similar. Nothing in the 1963 is better other than perception and cool factor.

So, time in the barrel is certainly a very relative thing that often has nothing to do with quality, but rather enjoyment, and they aren’t the same any more than a cross country trip in a 1963 vs 2014 Corvette can be measured in quality over enjoyment/the experience. It’s not evil, it’s just a commodity.

When you mix age with honey hole quality, you get serious $$$$. Maybe 10/1 profit differential. Diageo takes Talasker and other 18 year  Scotch from around $80 a bottle and makes it $130-$150 a bottle overnight, while at the same time releasing NAS varieties in the $50-$80 price range. It’s happening with our American Whiskey, too, so stay on your toes.

It’s a win win only for distilleries. Supply shortage becomes a luxury when you can sell it for many times what you could have a few short years ago. So what can be done? Well games with speeding, age and making Whiskey taste older. This is Part 3, coming soon.