The main story surrounding the world of whiskey is the unprecedented growth the industry continues to celebrate. That isn’t the whole picture, however, as the industry continues to feel the pinch of supply chain issues that are disrupting demand. And the demand, coupled with the lack of product, is driving whiskey barrel prices. First, the good news.

The Good News: There’s an Increased Demand for Premium Brands

The point can’t be overstated: the whiskey industry is booming, by a LOT. The Distilled Spirits Council of the United States (DISCUS) says that the spirits industry is experiencing their fastest growth in two decades, with no sign of slowing down. One of the main drivers of growth for the American whiskey category is a consumer shift toward premium brands.

The food and beverage delivery industry thrived during the last two years with people cooped up inside. As a result of being stuck at home, whiskey fans adopted a “treat yourself’ mentality that means they’re now willing to pay for pricier bottles. Gone are the days when “any bottle will do.” Now whiskey lovers opt for premium brands, limited releases and elevated offerings.

According to DISCUS, the total spirit revenue increased 24.2% in the super premium category and 11.5% in the high end premium category.

Nowhere is this more true than the Kentucky bourbon industry. The bourbon industry funnels $9 billion into Kentucky’s economy each year. “Distilleries, jobs, wages, revenue and investment are up triple digits across the board in the last 12 years,” said Kentucky Gov. Andy Beshear in a news release. “In turn, this amber wave has spurred more corn production, barrel cooperages and other supply-side manufacturers that are sustaining families and adding vibrancy to local communities.”

The Bad News: Supply Chain Problems Persist

Now for the bad news. Supply chain disruptions – along with factors like labor shortages – have forced whiskey barrel prices to increase. Suppliers cannot get enough materials, causing product shortages for the distributor and its customers. At the same time, a shortage of trucks and drivers, poor rail service, and port congestion has resulted in delayed availability of the product that is made available from suppliers. These are the economic issues affecting the spirits industry as a whole:

• Increased shipping and transportation costs: The cost of transportation is still as much as 300 percent higher than what is typically considered “normal” which has the capacity to squeeze out smaller producers.
• Glass bottle shortage: Difficulty obtaining a steady supply of glass bottles is putting a strain on producers. There are only two suppliers in the United States that produce the type of glass that is required for food and beverage packaging. Growing demand in the industry is making it impossible to acquire enough glass bottles.
• Costs are rising across the board due to inflation: A combination of factors including (but not limited to) strong demand, workforce shortages, and supply chain disruptions have driven up whiskey barrel prices, especially for energy, transportation, and food. Inflation has reached the highest level since 1982.
• Workforce shortages continue: Most manufactures say worker shortages combined with the tight labor market are negatively impacting production and deliveries.

The Solution: Purchase Your Own Barrel or Cask

Even as supply chain pains persist, bourbon, Scotch, rye whiskey, and others are still being produced in mass quantities. Why not look into buying and bottling your own juice? Whiskey barrel ownership is a unique way to acquire high quality whiskey with an aspect of personalization. Plus, the purchase of whiskey barrels also helps small craft distilleries. Traditionally, distillers deal with a lag time between aging their product and selling it to consumers. Once the whiskey was fully matured the distillers would then generate revenue, but only after it’s been aging for several years. When a consumer purchases a barrel directly from the distillery, it provides necessary funds for new equipment, expansion efforts or more warehouse room to age barrels.

At Barrel Global, our mission is to help collectors experience whiskey in an entirely new way by purchasing full barrels from distilleries across the world. The first step to our process is to request access. From there, you’ll wait for your application to be approved before you can reserve a barrel. After receiving payment, you’ll receive an ownership certificate that provides legal documentation outlining your full barrel rights. You have the opportunity to visit your barrel for sampling but in order to comply with legal requirements, full barrels cannot be transported outside of an approved warehouse until they are bottled. If you don’t want to have your whiskey bottled, you can trade it for others you prefer or sell your collection for cash on the Barrel Global marketplace.

We’re on a mission to make whiskey barrel ownership accessible to collectors worldwide. As the first ever global marketplace for whiskey barrels, you can connect with distilleries and collectors around the world to build your own portfolio. For a whiskey experience unlike any other, request access today.

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