Last year when demand started to outstrip supply, Makers Mark nearly committed brand suicide when it watered down its bourbon. Since the aging process of bourbon means new batches take between 5.75 to 6.5 years to produce, the only strategy the company believed would work to service immediate demand would be to extend its current stock by cutting the bourbon with water.

Since then Makers Mark has reversed the decision, but the fact that the distillery was forced to so drastically change its modus operandi has shone a light on the dark side of the bourbon boom: a dwindling supply amidst a growing demand.There is no danger of bourbon disappearing from shelves, but anyone can see the writing on the wall.

We’re making more bourbon every day. In fact, we’re distilling more than we have in last 40 years,” said Harlen Wheatley, master distiller at Buffalo Trace. “Still, it’s hard to keep up. Although we have more bourbon than last year when we first announced the rolling blackouts, we’re still short and there is no way to predict when supply will catch up with demand.”

The first law of supply and demand is that if demand increases and supply remains unchanged or is reduced, a shortage occurs that leads to higher prices. Bourbon distilleries wont allow us to drink them out of supply, so in order to curb demand while maintaining profitability and product for the future they must raise prices.

I have predicted for years that soon we will also see the rise of “super premium” bourbons, whose prices resemble those of expensive scotch whiskeys. We have already seen this in action in a few cases: Pappy, Anyone?

Another strategy that will become commonplace in the bourbon boom will be younger bourbons. By releasing their bourbon at 6, 7, or 8 years rather than 10, 20, or 22 years, distillers can save some of the angels share (the portion of bourbon that evaporates from the barrel, thus lowering the amount of bourbon each barrel yields) while also getting product to market 2 to 12 years sooner.

Whats wrong with that, you ask? Bourbon gains proof as it ages, and cutting the amount of time a bourbon rests in its barrel is sure to cut the proof.  Of course, you could age your bourbon faster by sending it out on a boat, but ain’t nobody got time for that.

Sure the distiller can cut the “high wine” coming off the still a little less to maintain the proof, but another problem rises: taste. Less time in the barrel means less caramel, char, chocolate, and oak flavors that we have come to know and love. But even if distillers decide to maintain their age lengths, its becoming more expensive to acquire the lumber to make the barrels (cooperage) that ages the bourbon in the first place, meaning an increase in their cost of doing business…an increase I am sure will get passed down to us.

So we can conclude that a bourbon shortage can mean one of three things:

  • Younger, less flavorful, and lower proof bourbons
  • Higher prices
  • The extinction of smaller productions from well known distilleries
  • All of the above

So if you come across a bourbon that you are in love with, buy two bottles and put one in the attic. You never know – it could be extinct next year.