Friday, December 9, 2016

Get Ready to Pay More for Booker's -- a LOT More



It started as a rumor. Beam was going to double the price of Booker's Bourbon as of the first of the year and start allocating it.

It seemed too crazy to be true. Sure, producers hike prices all the time, especially these days, but doubling it? With the increase the retail price will be about $100 per 750 ml bottle. Today, although the suggested retail is about $50, it is commonly found on deal in the low 40s. Such a huge price hike for any brand is a huge risk. It felt like brand suicide. It couldn't possibly be true.

But it is.

Here are the facts, from an official Beam Suntory spokesperson. Suggested retail will be $99.99 and the wholesale price is rising accordingly. At the same time, they will cut back from six or seven batches per year to four, with the batch size staying the same (about 350 barrels). Essentially, that means the number of bottles available will shrink by about one-third. They expect this will cause demand to exceed supply immediately, so they will began allocating the available bottles so every part of the country gets its fair share.

They have their own way of explaining why this is happening but it boils down to this. They are doing it because they can. The brand is strong. Other super-premium whiskeys are selling in that price range, so why shouldn't they enjoy some of the available profit? This keeps Booker's as the top of their line (except perhaps for their very limited 'craft' offerings), rather than creating something new in that high-price segment.

Seen in that context it doesn't seem so crazy after all. Perhaps the fact that Booker's Rye sold out quickly at $300 a bottle gave them the idea.

If you like Booker's and don't want to pay the higher price, or have trouble finding it, Jim Beam Black at about $22 is a good substitute. The biggest difference is the proof, 43% ABV for Jim Black versus more than 60% for Booker's. For about $40 a bottle you can get Knob Creek Single Barrel, which is nearly the same ABV as Booker's. On paper they are virtually identical, but no two products are ever exactly the same due to flavor profiles. Still, $40 versus $100 is worth considering.

This may have been part of the equation. Knob has been creeping up into Booker's price segment. In fact, all four of Beam Suntory's 'small batch' bourbons are bunched up at about the same price. It makes sense to put some distance between them. (The other two are Baker's and Basil Hayden's.)

No doubt there will be much weeping and gnashing of teeth about this, with accusations of greed and probably some xenophobia aimed at the parent company. If you swing that way, knock yourself out.

Realistically, no one in the whiskey business is organized as a not-for-profit. Beam has a huge American whiskey portfolio, with something for everyone. The whole industry right now has more demand than supply and the aging cycle means there is a several year lag between production increases at the distillery and supply increases on the street. The smart business play is to increase profits and tamp down demand a little bit with price increases, hopefully without hurting overall demand growth and customer loyalty.

40 comments:

Arok said...

I normally stop and consider Booker's while at the liquor store, sometimes grabbing it and sometimes not. This will save me time since they've just priced it out of consideration entirely.

Unknown said...

Never tried Bookers before. Suppose I never will now. A slight price increase over time is to be expected, especially these days. But double? Puh-lease.

Anonymous said...

When people willingly pay $80 to $125 for sourced whiskeys like Jefferson's, Whistle Pig, and Lock, Stock & Barrel, just because they're fashionable, I don't see why old-fashioned actual producers like Beam should stand by and not position themselves to partake. For people who need to drown their sorrows, there are plenty of cheap options; Booker's is pure luxury and accordingly can be priced at whatever point the market will support without any concerns; just hold the moral indignation.

Spenser Eggleston said...

I suppose it will be a big hit with new comers to the bourbon world, who like to show off expensive bottles to their friends. This price increase is s sleep in the face to customers who've supported the brand in the past. Call it inflation, supply and demand, what have you. Doesn't change the fact the juice in those bottles isn't worth that price any day of the week.

kaiserhog said...

Evan Williams Bottled in Bond for me.

Brian (AKA The Dean) said...

I'm a Booker's fan. Rarely buy it for the house (maybe twice a year), but have a couple local bars that stock it and sell it at a very reasonable price. I better tell them to "stock up!"

It's now out of my price range, so that's disappointing. I have plenty of other options, so I won't be thirsty for long. But as has already been stated, it isn't completely out of line considering the number of average/subpar whiskey out there, getting a premium price. I just hate to see an established brand, like Beam, double the price of a product in one swoop. It leaves a bad taste in my mouth. Oh well, I'll just wash that taste out with some other bourbon I can afford. They are still out there. For now, anyway.

Q++Studio said...

Even at $99 it is a great buy.

Anonymous said...

Between stunts like this, and flavored 'whiskey', this industry is going to shoot itself in the foot. I understand the need to make hay while the sun is shining, but the whiskey biz is going to hurt its future by pulling stunts like this. Bourbon drinkers are a group that highly values loyalty.

While I've had a few decent editions of Booker's, I've always found that whiskey to be too hot and I love big proofers. If they're going to charge this price and up the age from 6 to 8 to 8 to 12, It'd would still be too expensive at $100, but getting closer to value.

mr manhattan said...

First off, at $100 SRP, I wonder if Fred Noe will still be pouring it over his famous grilled pork chops? ;->

Meantime, there's still Baker's, the forgotten middle child of the small batch collection. At 107 proof (perfect in my mind) and a 7yr age statement, it's a great whiskey that no ever remembers. It's going to look at lot better now, I bet. I just hope that the price if this remains where it: usually discounted to around $45.

Anonymous said...

Chuck, with higher prices and fewer bottles released, they need to increase the age statement. Are there any plans for that? They are going to have to increase the age because there are too many other options out there at the price of a Benjamin. At 6-7 years for a hot-tasting barrel proofer, it's already borderline too young as it is now.

mr manhattan said...

Thinking about this some more...

First and foremost, this may be result of a problem that Beam created for itself by allowing prices of all of the Small Batch Collection Bourbons to compress so closely. They should have increased prices for all four products at the same time…and a few years ago. Now bumping the flagship Booker’s to $100 SRP is going to give them a LOT OF HEADSPACE for price increases to the remaining three: Knob, Baker’s, and Basil Hayden’s. Sigh.

Also depending on how the market reacts to Booker’s, you’re likely to see increases in similar products, like the Elijah Craig Barrel Proof, E.H. Taylor Barrel Proof, Russell's Reserve Single Barrel, etc.

So: get used to the new cruelty.

Spenser Eggleston said...

People are talking about the age possibly increasing, and how that would make the price tag a little closer to being realistic. Guess they'd have to change that cute story about his grandpa enjoying 6-8 bourbon. Wonder what his grandpa would think about the price tag.

That said, I too love bourbon in that age range. And I don't believe an increase in age has a direct correlation necessarily with an increase in quality.

Carlton said...

Scotch and Irish whiskey are looking better every day.

Anonymous said...

Great point. What keeps us loyal to bourbon is the value. If they keep this up, then my wandering eye will cast a glance to Scotch, Irish, and Japanese whisky. Why not? They reap what they sow.

Anonymous said...

You obviously have never tasted the Bookers 25th Anniversary or the B96 batch at extra older ages. Some of us Bookers fans have been clamoring for older aged Bookers for awhile.

Anonymous said...

Not a convincing point. Booker's is an elite product for hardcore bourbon fans; they're not going to switch to a completely different type for reasons of "value". And most quality straight bourbons are still cheaper than even inexpensive Scottish and Irish blends, let alone single malts and single pot stills, so some price movement at the pricey fringe is going to have zero impact; it may even increase the snob appeal.

Spenser Eggleston said...

Better clamor into your savings account ;) Increased aging can increase quality but not necessarily. But then palates are completely subjective of course.

Also I was making a point that they justify the age of their bourbon by claiming it's at the age grandpa liked it. So I guess they'll make a new label?

Chuck Cowdery said...

Part of Beam's rationale for the price increase is that they are not going to change anything. They think the new price is amply justified by the current product. Yes, it is a gamble. They might be wrong, but that's the bet.

Brian (AKA The Dean) said...

One of the several "anonymous" posters asked: "What keeps us loyal to bourbon is the value. If they keep this up, then my wandering eye will cast a glance to Scotch, Irish, and Japanese whisky. Why not?"

Um, have you bothered to consider, some (I'm thinking, many) of us simply like the taste of bourbon better, than Scotch or Irish (or Canadian, or Japanese, etc) whiskey? If price is the sole driver, why not just drink vodka? I'm poor as hell, but I don't make my whisky "style" preference (though it is a consideration when it comes to exactly what to buy) based on price. But I'm sure some do.

Anonymous said...

There's a part of me that wonders if they could transition to a true Single Barrel in the 6-8 year range at the $100 price point. If I understand the storyline of the product correctly, Booker enjoyed his juice from barrels in that age range but I doubt that he was blending straight from the barrels for personal consumption.

A legit single Barrel expression at 6-8 years would also allow for limited store picks to help drive value and hype. The blending may have been fine for consistency sake, but a true Single Barrel would be more exciting and more desirable all while justifying the price.

I admitted purchased my first bottle this week since it's been on my bucket list and I assumed it would always be there around the current price point. That said, as much as I enjoyed it, I wouldn't spend $100 on a 6-8 year batched bourbon.

-Matt

Jim Laminack said...

While supply and demand dictate price to a great degree, this seems to be primarily a marketing ploy. They are decreasing production by a third (a real head scratcher) and putting it on allocation. The only reason I can see for cutting production for a very successful product is to make it much less available and appeal to those that want what they can't get, thereby elevating the perceived status. Looking down the road, as most all producers have been ramping up production, the availability of excellent bourbon will eventually rise to meet demand and pricing will normalize to market dictates. The brands that keep demand ahead of supply will continue to enjoy the ability to over price their products without worrying about excess inventory. Kind of a Pappy syndrome sorta thing.

Anonymous said...

Well, great. There are still plenty of bottles on shelves at the current price; I think I'm going to clean out the supplies at a bunch of stores and then, like, never buy another bottle again.

Anonymous said...

I don't know how much demand there is for Bookers, always seems like it is on the shelves. I'm happy with JB Black myself.

Anonymous said...

Never give a sucker an even break.

Oscar said...

Not that Beam-Suntory asked but I'd like to suggest that they give us a 12 year old Makers Mark at cask strength, sell it for $200.00 or more.
They would have no trouble selling it.

Dan Melko said...

As a long time Bookers drinker I can only scratch my head at this new pricing scheme. Regardless of what management at Beam might think greed is not good. I've been meaning to try other cask strength offerings such as Jack Daniel's single barrel or Stagg jr.

I only know that I won't play the game.

Anonymous said...

Even at $50 a bottle there are other barrel proof offerings out there that are far better than Bookers within $10 of it, plus/minus. Stagg Jr,. 1792 Full Proof, E.H. Taylor Barrel Proof. I might stock up with an extra bottle of Bookers in the sub $50 range just to have it and keep in the collection, but it's not worth $100 a bottle, not by a long shot.

CLT said...

Hi Chuck,

I wanted to reply to your statement "Realistically, no one in the whiskey business is organized as a not-for-profit." In doing so, I'd like to offer some advice.

I've never understood the point of statements like this. Does anyone argue they are non-profits? Being frustrated at a price increase — especially a drastic one like this — is not an indication that people want price ceilings, nationalization, or anything like that.

As an occasional reader, I think it's glib statements such as this that sometime lead critics to question your motives (I'd list some of the insults, but I've got a hunch you're familiar with them!).

As I see it, this increase in price is really unprecedented in some ways, which to me is the interesting angle — I can't think of a parallel in American whiskey (maybe EC18?). Of course Beam (and all other companies) want to make money! But, they usually pay lip service at least to loyal customers. This move suggests they think that new customers (with a different perspective on prices) are now more essential to their bottom line moving forward.

I appreciate the blog and just wanted to offer some friendly advice.

Cheers,
CLT

Pack Leader said...

Agreed. Capture some profit, sure, but don't alienate your faithful with a 100% markup.
I'll be removing Bookers from all of my on premise accounts.

Anonymous said...

While Bookers is good... It is not $100+ good. There are many other barrel proof offerings that are better. E H Taylor Barrel Proof and Elijah Craig Barrel Proof are both better. Even Stagg Jr is a fantastic high proof

Chuck Cowdery said...

Few people will be interested to read of my feelings regarding my shortcomings, which are many. Maybe I'm wrong about that. You can add it to the list.

Unknown said...

The 25th anniversary release is beyond amazing. I bought a bottle while house hunting and didn't open it till we had settled. I began my quest for another bottle, until I found out they were going for $350+ in the secondary market. I still have some left, and savor every drop of it

Anonymous said...

Booker's has been a favorite for a long time and now I have 3 bottles that I'll make last awhile. However, I'm just not sure I can justify the new price. There are just too many other great choices for me selling at the current price.

Jeff Arnim said...

Love it. My favorite. But not at $100. Knob creek, woodford reserve, makers, will satisfy me just fine at a respectable price.

Punter said...

The numbers on this can work out for Beam, or it could backfire. But it is a business move, and a major company does not go ahead with a significant repositioning of a label (which is what this represents) without thorough market research. The very fact that people are commenting here means that, statistically speaking, their opinion likely doesn't matter much (no offense intended). To reference the comparison to scotch made above, once you get past the basic 12-year expressions, people pay well in excess of $100 for bottles that are by no means exceptional without fuss. This is an attempt to "premiumize" American whiskey along those lines. We, and Beam, will just have to see how that works out for demand.

footz said...

Somehow I think they are holding something back and maybe the couple roundtables offer some insight. Chuch, have you been signed on to a permanent roundtable? With celebrity picks, I can see a $100 price tag being justified. I'm still not a buyer...but...

Anonymous said...

Well, that would be a big mistake. Double the price of any product and you'd better provide some perceived increase in quality or performance.

Andrew O said...

How long til they introduce "Basil Hayden's Special Reserve" as a step down at $80 using all the old Old Granddad 114 juice

Tommy tom said...

Wondering what Bookers can fetch as a 700 mL / 1.0 L export package? There's a big thirst for all kinds of bourbon already packed to ship outside the US of A.

Anonymous said...

Remember, "cutting production" doesn't necessarily mean putting less juice in barrels. It might mean putting the same amount in barrels, but putting fewer of those barrels in bottles labeled "bookers"...