The Whisky Market

It's all about whisky!

Bourbon & Whisky .... a strong 80 year marriage!

Bourbon & Whisky .... a strong 80 year marriage!

Refill Bourbon casks have been flowing into Scotland for over a hundred years.

The kicker happened in 1935 with the passing of the ‘Federal Alcohol Administration Act’ which required all Bourbon hence forth to be matured in ‘virgin’ American white oak barrels. Wilbur Mills (Democrat Representative from Arkansas) introduced the bill with the outset to classify American whisky, but the underlying fact was that his native state of Arkansas has well profited from barrel making, being one of and still a major supplier of oak lumber for barrel making. After the act was passed and the bourbon ready there was an abundance of American barrels and Scotland was hungry for refill casks.

Refill bourbon casks account for the majority of casks used in today’s distilleries, approximately 95%. American oak is high in vanillin’s, which attributes to the flavour character it imparts during maturation. The high content of tyloses (gives the wood a closed cellular structure, making it water and rot resistant) adds to its superior water tight properties, ideal for barrel making. Bourbon barrels are charred (heavy toasting of the cask) at 4 levels; Char #1 – 2mm to Char #4 – 4mm of toasting in the wood, Char #3 is the standard.

The change in using bourbon casks did however, change the taste of whisky versus using sherry, porto, or madeira casks for maturation which have been used for centuries. American white oak gives notes of vanilla, honey, coconut, almonds, créme brulee, and ginger. European oak gives off spices and dried fruit notes; arising from the sherry, porto, and madeira wine.

The great economics of bourbon barrels is they are far cheaper than European casks, because of the high abundance of American white oak, they are priced far lower, even with the increase price, which was between 40-50% for American oak in the past 5 years. Abundant, cheaper …why would Scottish distilleries, much like the Irish and Canadian distilleries, not want to utilise this great source?

Bourbon barrels have in many ways saved and grown the Scottish whisky market internationally. Hate or love bourbon, the barrels do aid in making delicious Single Malts!

Facts of Bourbon barrels:

  • Oak:American White oak (quercus alba); sourced in 18 eastern US states
  • Key Natural Chemicals:Vanillin, Tyloses
  • Flavor Notes:vanilla, honey, créme brulee, coconut, almonds, nutmeg, ginger, smoky (from charring)
  • Maturation Colour:Wheat, Straw
  • Name:American casks are called ‘barrels’ set at a standard 53 US gallons/ 200 litres volume
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The Boom Continues

The Boom Continues

Auction prices for fine whisky are soaring....

...ACCORDING To the investment grade scotch index the top 100 single malts gave an average return of 440% from the start of 2008 until July 2014.
At auction sales of rare bottles are expected to reach 6.75 million BP up from 5 million last year (Bloomberg). On the other hand, investors in fine wine have seen the market, over the last 4 years drop by 45%. The best performer, chateau lafite has decreased in certain vintages 70-80%. Food for thought.
There are 100 distilleries in Scotland all producing single malts, and many are unable to keep up with the huge increase in demand, due to whiskies lengthy ageing process.
Sourcing casks is becoming increasing difficult and they are becoming rarer and rarer

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