Spend any amount of time around whiskey superfans and you’ll quickly hear talk of “allocated bottles,” “allocated bourbon” or “the allocated market.” Many restaurants and bars have special menus for allocated whiskies, while some liquor stores and specialty retailers now list allocated selections separately.
What exactly is allocated bourbon? And why aren’t other spirits subject to the same treatment?
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In one sense, “allocated” can serve as a synonym for “rare” or “hard to get.” For instance, unicorn bottles like Pappy Van Winkle and Blanton’s Straight From the Barrel are allocated, whereas regular Jim Beam and Jack Daniel’s are not. Literally, however, the word just means that each retailer, vendor or other point of sale has only been allocated a certain number of these especially desirable spirits to sell.
It’s important to remember who’s doing the allocating. Because of the three-tier system in the United States implemented after Prohibition was repealed in 1933 (importers or producers, distributors and retailers), allocation is generally done by distributors, not by producers. Distributors typically decide where and how to send the most desirable bottles they carry, which means that they can use those rare bottles as rewards for their best customers. Sell plenty of cases of a product your distributor really wants to move, retailers say, and you’re likely to be offered a chance at something special. Only sell a little, and you’re probably not going to get any cases of Angel’s Envy Cask Strength headed your way.
That type of carrot-and-stick approach is particularly hard on shops with smaller sales volumes, explains one Galveston-area retailer who asked for anonymity in order to avoid conflict with his distributor.
“Chain liquor stores get the vast majority of all allocated bottles. Independent shops like mine get shafted hard,” he says. “Distributors use those allocated bottles as motivation to get us to take undesirable product, to push X product over Y product, or to help meet a sales goal.”
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What bottles are allocated can depend on the market, though there are some basic guidelines, starting with high-end bourbon. For example, the Buffalo Trace Antique Collection (BTAC for short), owned by the Sazerac Company, is allocated everywhere. Last year, the BTAC included Thomas H. Handy rye, Eagle Rare 17-year-old bourbon, Sazerac 18-year-old rye and William Larue Weller bourbon, while fan favorite George T. Stagg was not released. Those and the other premium bourbons produced by the Sazerac Company—a bucket-list lineup that includes Blanton’s, E.H. Taylor, Elmer T. Lee, O.F.C. Vintages, Van Winkle and the Buffalo Trace Experimental Collection bottlings—are all pretty much universally allocated.
The same holds true for most collectible bourbons, as the category surges in popularity. With a wild “secondary” market where collectors buy and often quickly resell, or “flip,” popular bottles, virtually every limited-availability bourbon is likely to be allocated. And it’s not always the most expensive bottles. Some popular but affordable and not particularly limited bourbons like Buffalo Trace, Knob Creek and Old Grand-Dad 114 are allocated, at least to a degree, in some parts of the country, as Jake Swain, a spirits purchaser at SoBro Spirits in Indianapolis, tells Wine Enthusiast.
“I’m starting to have more and more items go on allocation,” he says. “Some things that are more or less everyday bottles have suddenly disappeared, or become impossible for retailers to buy, to say nothing of the consumer.” He used to be able to buy 15 cases of Buffalo Trace at a time, he says, but his distributor now limits him to 10 cases per order, and he often doesn’t even receive that much.
Many retailers complain about a lack of transparency in terms of how distributors choose to allocate their sought-after bottles. For their part, distributors are often unwilling even to talk about allocation. In response to a request for an interview, one distributor simply replied, “I am unable to comment or quote about allocations.”
As for how allocated bottles are handled at the point of sale, methods vary. Many liquor stores simply list special releases way above MSRP, pricing rare bottles close to what they might cost on the secondary market. Others only offer allocated bottles to customers on their loyalty or rewards card programs.
Some stores, including many state-owned liquor stores, organize lotteries or raffles for allocated products, offering winners the chance to buy a bottle. A number of distilleries, including Four Roses, have started holding their own lotteries for special or limited editions. And certain store owners still seem to enjoy putting even the most sought-after rarities out on the shelves, Easter-egg-style, to reward in-person shoppers, despite the risk that those bottles will immediately get flipped.
While bourbon is the main category undergoing allocation, it’s not alone. Many Japanese whiskies, some Scotches and several Irish whiskies, including Redbreast and Blue Spot, have long been allocated.
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The downsides to allocation are obvious. But there are also some overlooked upsides. Enthusiasts like Amanda Munson, a whiskey lover in Seattle, take pleasure in searching for great whiskies and not always knowing what they’re going to find.
“My husband and I enjoy watching YouTube videos about whiskey, learning about different distilleries, the different flavor profiles, and then go out looking for them,” she says. “We meet interesting people and enjoy that time together. It’s part scavenger hunt, part networking and part education. And then, well, there’s the whiskey, too.”
Even better than turning bottle shopping into an entertaining treasure hunt, allocation can also help build customer interest and relationships.
“We love to pop in to different shops and get to know the people who run them,” says Munson. “Sometimes getting your hands on an allocated bottle is a reflection of your patronage with a store manager.”
Beyond soaring consumer demand, part of what’s driving allocation is time itself. While distillers of unaged spirits like vodka and gin can more easily adjust production to keep up with demand, it’s a very different situation in the world of whiskey, where it obviously takes six years to make a six-year-old spirit.
If you have time to wait, the situation could sort itself out eventually. Most bourbon brands have ramped up production, so there’s a good chance that many of today’s allocated bottles will be more readily available within a few years. On a longer timeline, consumer preferences are bound to shift away from bourbon and other “brown spirits” at some point. So, who knows? Wait long enough, and you could see the shelves of your favorite liquor store filled with a glut of great bottles someday.
Last Updated: June 6, 2023
Source: https://t-tees.com
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