Whiskey Economics: Inside Bourbon Pricing

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The economics of whiskey pricing involves numerous factors that
determine why bourbon costs what it does, from physical aspects
of aging to market demands and consumer preferences.

• Quality and quantity are fundamental considerations in whiskey
pricing
• Age significantly impacts cost due to taxes, warehouse space,
and liquid loss through evaporation
• Temperature fluctuations affect yield as cold weather expands
barrels pushing liquid outward while heat contracts wood drawing
whiskey into staves
• Barrel strength whiskeys command higher prices because they
aren't diluted, resulting in fewer bottles from the same amount
of aged spirit
• Many distilleries have increased prices to capture value that
was previously going to secondary market resellers
• Despite fears of a "bourbon glut," most established
distilleries report strong sales with new operations continuing
to open
• American whiskey prices have generally remained stable or
decreased slightly over recent months according to store
comparison research
• Family-owned operations like Old Louisville Whiskey Company
focus on quality over quantity
• The Old Louisville 17-year bourbon (141 proof) scored a perfect
18/18 on the tasting scale
• Premium whiskeys with high price tags often accurately reflect
the investment, time, expertise and limited quantity
involved

Join us for our upcoming bus tour where we'll be visiting Old
Louisville Whiskey Company and meeting Amin Caroud in
person.
The mysterious world of whiskey pricing unfolds as we explore the
complex economics behind what makes your favorite bourbon cost
$30 or $300. Beyond marketing hype, we reveal the genuine factors
distilleries consider when setting prices in today's competitive
spirits landscape.

Every drop of aged whiskey comes with hidden costs. When
distilleries age spirit for extended periods, they're making a
significant investment – paying yearly taxes, managing warehouse
space, and accepting substantial liquid loss. A 53-gallon barrel
might yield only 20 gallons after 15 years due to the "angel's
share" and wood absorption. Temperature fluctuations further
complicate matters, as cold weather expands barrels pushing
liquid outward, while heat contracts wood drawing whiskey deeper
into staves, affecting both flavor development and final
yield.

The bourbon market has evolved dramatically in recent years.
Despite fears of a "bourbon glut," most established distilleries
report strong sales with new operations continuing to open
throughout Kentucky. Our price comparison research at local
stores confirmed American whiskey prices have generally remained
stable or even decreased slightly, contradicting inflation
concerns. Meanwhile, premium offerings have seen strategic price
increases as distilleries recapture value previously lost to
secondary markets – Russell's Reserve 13 Year jumped from $80 to
$190 in just three releases.

The episode culminates with a spectacular tasting of Old
Louisville Whiskey Company's 17-year bourbon bottled at a
hazmat-level 141 proof. This family-owned operation exemplifies
the passion-driven side of the industry, where Amine and Beth
Karaoud's commitment to quality over quantity produces truly
exceptional whiskeys. The expression earns a perfect 18/18 score,
with particular praise for its "cinnamon toast crunch" nose,
thick viscosity, and maple syrup flavors balanced with
well-integrated oak.

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