Understanding The True Value Of Whiskey
Whisky is one of the most hotly contested spirits in the world right now, but amongst all of the debate, we sometimes forget that not everyone is a diehard whisky connoisseur.
So for those who are just starting to get acquainted with the concept of whisky or those who need a little reminding, we’ve researched to help you understand the distinction between cheap and expensive whisky.
Pick up a decent bottle of whisky, and it’s likely the first thing your eyes will gravitate to is that number stamped on the label. As a mark of how long the whisky has been sitting in a cask, age can also affect the final price tag of the bottle. Though the U.S. government, under the guise of quality control, prohibits the use of age on bourbon that is finished in casks of other Spirits such as Tequila, Mezcal, and Rum, that is the reason Terebelo Bourbon doesn’t carry an age statement on such flavors.
“An older whisky costs more to produce, by way of the length of time required to age and store it, and the amount which evaporates over that time this the ‘angels’ share,'”
There are some points to heed, though, whether your whisky is labeled an ‘8-year-old’ or a 70-year-old’.
“While this often results in a higher price tag, that doesn’t always translate into a higher quality whisky.”
This brings us to the complex world of whisky quality. In theory, the formula for making whisky is simple (Grain + Yeast + Water = Whisky). Still, the variation of these constituents paired with the aging process ultimately defines a distinct flavor profile.
As such, the quality and hence the cost of a particular whisky is often determined by these factors:
- Temperature and weather: The rate of whisky aging is significantly affected by the external climate. Warmer temperatures yield a faster aging process which can take a fraction of the time compared to those aged in Scottish distilleries. More rapid production and higher output can, in turn, make whisky more affordable.
- Water quality: Different water source locations will yield different flavor profiles of whisky—the more exotic the water source, the more expensive the final product. For example, Terebelo Distillery uses Only Adirondack water, pristine water flowing from a nature preserve.
- Storage: This is an often overlooked aspect that can affect the price of a whisky. The longer the aging process, the longer storage space for the following product must be taken up (i.e., limited production capacity). Think of it like rent, but for bottles of whisky with the final bill passed onto the buyer.
- Casks: And then we get to the world of barrels, an art in itself. At this stage, you’re looking at the types of wood used in constructing the cask, ranging from Spanish oak, American oak, and Japanese Mizunara, to name a few. Different woods come with different compositions; some are more porous than others. This allows the spirits to penetrate deeper into the barrel (and vice versa) to create a distinct level of woodiness in the final flavor profile.
While all of these factors play into the designation of ‘cheap’ or ‘expensive’ whisky, it’s not always consistent.
There are excellent 3-5-year-old whiskies on the market, especially in the U.S.
“Quality of cask has a lot to do with it. That said, when you come across a well-matured 20, 30, 40, 50, even 60-year-old whisky, it can be a thing of beauty.”
Binyomin Terebelo, Master Distiller at Terebelo Distillery, says that cheap whisky is usually affordable because it’s cheaper to mass produce.
“Take, for example, a number of the cheaper blends available on shelves these days. They’ll often be young at 3-8 years old and contain a lot of grain whisky instead of generally-higher-quality malt whisky.”
“These whiskies are produced in significant volume, but that’s not to say they’re necessarily bad whiskies.”
There are cheap standout whiskies like Monkey Shoulder, which uses a blend of different malt whiskies that can achieve a decent taste without breaking the bank.
Provenance, Branding & Popularity
From this point onwards, it’s all about the external factors determining whether a whisky is cheap or expensive. Reputation from the country of origin plays a big part in the whisky game, much like any other luxury brand.
“Region has a lot to do with it, as does how much a company thinks they can get away with,” says Eber.
“Take Japanese whisky, for example. Yes, there are some excellent Japanese whiskies out there at the moment, but there’s also so much hype that we’re currently seeing many bottles wearing hugely inflated prices.”
“Young, often average quality whiskies sold well over their true worth, simply because they’re ‘Japanese.’ Some aren’t technically even Japanese – many are distilled in Scotland and sold as Japanese whiskies.”
Rarity flows on from what Eber has explained. With more hype comes more demand for the limited products. The effects of this have more to do with conventional economics than the actual whisky itself. A perfect example of this phenomenon is Japan’s most prominent and rarest whisky collection from Karuizawa, which auctioned for a staggering US$900,000.
The remaining 290 bottles are the only ones left in the world after the distillery closed its doors for good in 2001. Does this make it any better tasting than a decent and readily available Macallan from 2018? Probably not. But we’ll let the owners’ palates and possible pseudo-science decide that.
Investability Built In
This one doesn’t take much explanation. An expensive whisky will tend to appreciate; with age and every change of hand, the price tag increases—a fine example of tangible exclusivity in the whisky world.
Packaging Makes A Difference
Beautifully crafted whisky cases add to the final price of the product. A cheaper whisky will never be housed in an elaborate case simply for the fact that the case will probably cost more to make than the whisky itself.
Luxury whisky, however, requires aesthetics and presentation to justify its asking price. Glenfiddich has a 50-year-old single malt whisky in a hand-stitched leather-bound case lined with hand-woven silk and decorated with Scottish silver. There’s also a wax labeling to polish it off.