There’s no lack of moaning about the state of bourbon prices. They’re crazy, and climbing. It seems like every day brings a new non-age statement bottle from an unknown brand, inevitably sporting a three-figure price tag. 

“There are [suppliers] who have gone to the extreme and are [doing] what I would consider gouging,” says Ryan Maloney, owner of whiskey mecca Julio’s Liquors. Some of those bottles, he adds, “are better than others, some are sort of mediocre, [but] the prices are so high that everybody else thinks they should get that for their products, too. And unfortunately that’s not always the case.”

You’ll hear that bourbon's prices are high because demand has risen, and the supply of aged whiskey hasn't caught up yet. Or they’re high because unscrupulous retailers (or, less visibly, wholesalers) are charging well over the distillery's suggested price. Or because the distillery is artificially controlling supply of in-demand bourbons through an opaque system of allocation. Or because some brands, as Maloney observes, think they can get away with asking for more than the whiskey is worth, simply because someone else is.

All of these things can be true, and sometimes are. But they don’t tell the whole story. 

Why bourbon prices started rising

There are genuine economic reasons for some of the increase in bourbon prices over the last 10 years. A rise in demand, spurred by many new consumers discovering whiskey, has squeezed stocks at the large Kentucky distilleries, which until the 2000s were sitting on huge surpluses. Since replenishing supply of aged spirits takes years, and demand has continued to rise, distilleries are in a constant state of catch-up, given they can (for the most part) sell only as much whiskey today as their plans from many years ago allow.

They also know it’s in their best interest not to raise prices dramatically on flagship products, such as the Jim Beam Whites and Evan Williams Small Batches, that make up most of their sales. But that doesn’t stop big distilleries from releasing other whiskies—limited editions, single barrels, and the like—with bigger profit margins. 

Over the years, as bourbon’s audience continues to grow and more people search the whiskey aisle for the occasional something special, many of these bottles have taken on cult-like status, making them increasingly difficult to purchase. A decade ago, for example, it was relatively easy to find Four Roses Limited Edition Small Batch at the suggested price of $85. These days, it’s downright impossible to track down, and if you do, you’re likely going to pay double the current retail pricing of $200—or even more.

With their economies of scale and vertical integration, Kentucky’s big distilleries have the resources to maintain price stability even as they cash in on the bourbon boom. But for brands that rely on purchased whiskey—so-called non-distiller producers, or NDPs—the situation is more precarious. 

Until recently, the traditional NDP model worked well. The late aughts and early 2010s saw a glut of aged whiskey, usually from those well-known big distillers, available for the taking, which allowed many brands to launch and build successful businesses.

“You could buy aged whiskey for $600-$800 a barrel all day long,” says Dave Schmier, founder of Redemption Whiskey and Proof and Wood, who has been in the business since 2009. “Obviously demand picked up and that changed; the price of aged whiskey went up,” he adds. “But new make was available fairly easy for not much—around that same price; again, all day long.”

Companies like Proof and Wood, which successfully balanced more expensive purchases of aged whiskey with cheap new make, paved the way for more NDPs to enter the business, and today there are dozens, many of them recent entrants, all reaching for a slice of the pie. But that pie is getting smaller: not only have the big guys stopped selling their own surplus stock, but contract distilleries like MGP, Bardstown Bourbon Co., and others no longer have the capacity to fill new-make orders for every customer that comes knocking. 

In addition, interest rates are reducing purchase power and speculators have bought up tens of thousands of barrels in the hopes of someday flipping them for profit. “It’s a challenge for people creating new brands to be able to sell stuff at fair prices,” Schmier says, though he notes that all of these dynamics are still in flux, especially as speculator barrels come of age and new distilling capacity comes on line.

How fans contribute to higher bourbon prices

Simply because of supply and demand, bourbon prices would have risen no matter what. But the outrageous prices that some bottles currently command indicate another element at play. And that's where bourbon drinkers come in.

As we learned in Econ 101, capitalism is driven by the interests of individuals, each with their personal formula for determining what something is worth. There are often widely accepted values for common products—no one’s willing to pay more than a few dollars for a roll of toilet paper, for example, outside of pandemic panic conditions. But when it comes to a luxury product like bourbon—especially given its highly regulated nature—all bets are off. 

Several consumer behaviors continue to accelerate bourbon's price rises, and it's helpful to be aware of them:

• Buying bourbon on the illegal secondary market and, conversely, buying bottles specifically to flip illegally for profit. Retailers and brands alike see the profits they're missing out on, and adjust their prices accordingly.
• Buying expensive bourbon without any obvious justification for the price, such as an extra-mature age statement or other rare quality. Many brands nowadays are pricing run-of-the-mill bourbon far higher than before, relying on premium packaging, false scarcity, or a celebrity affiliation as justification.
• Buying a particular bottle because of the hype that surrounds it or the opportunity to acquire bragging rights, not because the buyer actually intends to enjoy it. 

Individual consumers might have strong personal reasons for these behaviors but they nonetheless affect the entire bourbon market. The number of people willing to overpay has reached critical mass, and raising prices to match has become widespread. 

But that doesn't mean we have to accept it! For a savvy bourbon drinker, this moment presents an opportunity to ignore the shiny, overpriced objects and seek out whiskies of true value. There is hope yet for you, bourbon friend. 

How to be a better bourbon buyer

If you're frustrated by the crazy prices you’re seeing, the first thing to do is consider your own buying habits. What attracts you to a particular purchase? Is it a distillery or brand you’ve enjoyed in the past, or did you just hear that it’s good, interesting, or cool? Take stock of your FOMO before handing over your credit card. And, if you can, try the bourbon before you buy it.

There are good reasons to pay a large sum for a bottle of bourbon, of course!

• You like the bourbon because you’ve tried it before, or because it’s from a brand whose releases you usually enjoy.
• It's a genuine rarity, such as pre-fire Heaven Hill, a bourbon that’s old enough to legally vote, or something actually distilled at Stitzel-Weller. 
• It has personal significance that increases its value to you, specifically. Many people search for Blanton’s that was dumped on the date of their child’s birth or wedding anniversary, for example, and that can be worth paying double or triple the suggested price of $55.

Second, determine your goal when making a purchase: is this to drink? To collect? To flip? If you’re hoping to collect or re-sell the bottle, you’re banking on its value appreciating, sometimes very quickly. In that case, be extra sure that you don’t overpay. Research the suggested retail price and consider how much above that the next buyer will be willing to pay. Resources like Bourbon Brown Book and WhiskyStats can give an idea of the range certain bottles may command, as can reputable auction houses. 

If you’re buying to drink, you’re in luck, because there’s almost always a bourbon that’s equal in quality for a lower price, which a good retailer can help you find. Maloney calls these “shelf gems”—bottles well under $70 that outperform for their price. Ask yourself: will you get double the enjoyment from bottle X, at $100, than bottle Y at $50? If so, spend that extra money with confidence. If not, focus on those shelf gems. (Look for my upcoming article in The New Wine Review that will spotlight such bottles.)

Finally, don’t be afraid to look beyond bourbon. If it’s the only whiskey you drink, you’re missing out on a literal world of other flavors and experiences, many of which offer serious bang for your buck. When you have the choice of spending $100 on a 4-year-old NDP bourbon or a 16-year-old single malt scotch, you’re pretty much always risking less when you go with the latter.