There will be some leveling off for distillers who ramped up production years ago, however rare whiskies still command marketing pricing.
Written by Anthony Angrisani
Bourbon, often referred to as America's native spirit, has enjoyed a steady increase in popularity and value in recent years. This growth has led many to wonder whether bourbon prices are in a bubble that is destined to burst. However, a closer examination of the bourbon industry reveals several key factors that suggest bourbon prices are likely to continue holding their value and not crash anytime soon. In this argument, we will explore these factors and make a case for the sustained value of bourbon as an investment.
Bourbon has a rich history that spans centuries, surviving wars, prohibition, and economic crises. Its resilience over time suggests that it possesses inherent qualities that make it a stable investment. The enduring appeal of bourbon as a symbol of American craftsmanship and tradition has proven to be a reliable foundation for its value.
The global demand for bourbon has been on a consistent upward trajectory. Not only has it become a favorite in its home country, but it has also gained popularity internationally, particularly in markets like Europe and Asia. The diversification of its consumer base reduces the risk of a sudden market crash since it isn't solely reliant on one region's economic stability.
Bourbon is subject to strict regulations that mandate it be made in the United States from at least 51% corn and aged in new charred oak barrels. This aging process takes several years, limiting the supply of aged bourbon. As demand rises and supply remains constrained, prices are likely to remain stable or increase.
Brand Loyalty and Collectibility:
Many bourbon enthusiasts are loyal to specific brands and are avid collectors. Limited edition releases and unique bottle designs have created a culture of collecting. Rare and aged bottles often appreciate in value as they become scarcer over time, making bourbon not just a beverage but a collectible investment.
Bourbon distilleries have diversified their offerings with various expressions, from entry-level to ultra-premium and other liquors like vodka, gin etc. This diversity allows them to cater to a wide range of consumers with different budgets. In economic downturns, consumers may shift to lower-priced options, but the high-end market can provide stability.
Tourism and Experiences:
The bourbon industry has invested heavily in tourism, offering distillery tours, tastings, and events. This experiential aspect creates a loyal customer base and provides additional revenue streams. Even during economic downturns, people often seek affordable experiences, such as distillery visits.
Bourbon is deeply intertwined with American culture and has become a symbol of celebration, tradition, and hospitality. This cultural significance ensures a continuous demand, as bourbon remains a beverage of choice for various social occasions.
Investors are increasingly looking to diversify their portfolios beyond traditional assets like stocks and bonds. Tangible assets like whiskey, especially bourbon, have gained attention as alternative investments. This influx of investment capital can provide stability to bourbon prices.
Bourbon prices are likely to continue holding their value and not crash anytime soon due to a combination of historical resilience, global demand, limited supply, brand loyalty, economic diversification, tourism, cultural significance, and investment diversification. While market fluctuations may occur, these factors provide a strong foundation for the sustained value of bourbon as an investment. As long as these dynamics remain in place, bourbon is poised to remain a lucrative and stable asset in the world of commodities.