If you haven’t noticed, there’s a boom in American whiskey right now. Led by bourbon, the category has grown 40% in the past decade, with revenue growth of 47% to $2.7 billion in 2014. The International Wine and Spirits Review forecasts 20% growth in the next five years. Supply can hardly keep up with demand, leading to shortages of the amber liquid in top markets across the country. And it’s the favorite way for pop culture heavyweights to booze up, from Don Draper on “Mad Men” to Frank Underwood on “House of Cards” to Raylin Givins on “Justified.” Like vodka and Scotch before it, bourbon is having its moment.
Mainstream bourbon brands are becoming lifestyle badges, signaling certain style and persona cues in every pour. Meanwhile, premium bourbon brands like Blanton’s, Michter’s, and Angel’s Envy are entering the type of status-oriented world of certain fine wines. And super-premium brands like Pappy Van Winkle, George T. Stagg, and William Larue Weller have developed the scarcity and cult following that only the very highest end of luxury brands ever attain. At the heart of this moment is a consumer that has a higher income, more disposable cash, a higher education level, and is geographically spread out through the entire country. What does the bourbon boom say about these affluent consumers?
First, today’s luxury-oriented consumers are closely in tune with their passions and indulgences, and they want to learn a lot about products and experiences before they purchase them. Bourbon, like wine and craft beer, is a unique subculture, one that demands attention and further study. These consumers enjoy doing the research, staying abreast on the latest releases, sharing news and information with friends, and ultimately one-upping them with their acquisitions. Bourbon is full of complexity, history, and mythology, and it all begs for deeper understanding. Spending more money on a pricey bourbon gives affluent consumers a sense of erudition and mastery.
Second, affluents really value authenticity. And what’s more authentic than an American spirit, which rose to prominence during the Revolutionary War (George Washington made whiskey), is dripping with Prohibition mythology, and has its holy land in the bluegrass state of Kentucky. It’s a corn-based liquor, which speaks to the hardworking middle of America. Many bottles are named after frontier and distillery heroes, like Elmer T. Lee, Elijah Craig, Basil Hayden, and Colonel E.H. Taylor. This built-in authenticity contributes to a feeling of discovery and adventure, which can turn a purchase into an experience.
Third, like any great luxury brand, many bourbons use exclusivity and scarcity to drive the market. Good whiskey takes years to age correctly, and it’s hard to know what’s going to be good and what won’t. 10 or 20 years down the line is a long time to forecast the market, so shortages are part of the business. Which can turn a well-reviewed, small batch release into Star Wars level hoopla. This, in turn, can turn the hunt for a bottle into a Hemingway-esque wild game pursuit.
And maybe Hemingway is an apt reference for the fact that whiskey, at the end of the day, is just manly. More manly than vodka. Probably a little tougher and more rough around the edges than wine. When Frank Underwood and Don Draper drink it, it hits a masculine chord in affluent men that harkens back to another time. And having a few good bottles in the office can help affluent men (although women are drinking whiskey, too, and are estimated to be 37% of the market) when they can dream that once upon a time they weren’t trapped in an air conditioned office, worrying about their 401(k).
[This article originally appear on Jan. 20, 2016 in Engage:Affluents.]