Bourbon barrel shortage to last two years, distillers warn

6th May, 2014 by Becky Paskin

The current shortage of American oak blighting the Bourbon industry will be “short lived”, but is expected to last up to two years, distillers have warned.

American-oak-barrels

The American oak shortage may continue to affect the Bourbon and Tennessee whiskey industry for two years

A shortfall in the amount of lumber delivered to cooperages over the past six months has heavily impacted the number of new American oak barrels available to distilleries.

While some larger distilleries claim to be able to secure enough barrels to maintain supply, the pressure is being felt across the entire industry, with some distillers predicting the plight to continue for between 12-24 months.

“There is definitely a shortage of barrels on the marketplace,” said Paul Hletko, founder of Few Spirits in Evanston, Illinois. “I have friends that have had to spend US$100,000 on new stainless steel tanks to put their new make spirit into while they wait for new barrels. People have been talking about it for a few months, but the full pain is just starting to be felt.”

An especially harsh, wet winter in the States has caused difficulties for the logging industry, which in turn, has impacted the number of barrels produced by the country’s cooperages. The situation has exasperated an existing shortage caused by swift and strong global demand for Bourbon and Tennessee whiskey.

Harsh winter was “bad timing”

While several cooperages contacted by The Spirits Business refused to comment on the issue, many distillers predicted an end to the crisis in the short to medium term.

“It will change this year now we’re coming out of the winter,” said Jeff Arnett, master distiller of Jack Daniel’s in Tennessee, which despite owning its own cooperages, has also felt the impact of the wood shortage.

“There’s a lot of active logging going on around us here, and while we’ve seen our inventory of wood at our stave mills reduced down to a minimum pile, we’re beginning to regain inventory there. Even though people aren’t getting their orders satisfied right now, it’s a very short lived issue.”

Meanwhile Darek Bell, founder of Corsair Distillery in Nashville, Tennessee, believes the deficiency will continue for up to two years, “so long as there’s not another harsh winter again”.

“The barrel shortage has ramped up over the last 4-5 months; it just happened to be bad timing, as we had an especially harsh winter. It will clear itself up. It will take a while to sort out but it will. Loggers will now over-harvest the wood as prices have shot up, then next year there will be too much and prices will tank.”

The shortage has prompted discussions over the use of rejuvenated casks in the Tennessee whiskey production process, which Diageo claims would help new craft distillers enter the market.

For a more in-depth review of the American oak shortage, and its effect on the Tennessee whiskey industry, see the May issue of The Spirits Business.

Leave a Reply

If that's interesting, how about these?

The fastest growing spirits in the US

For both established and fledgling brands, the US is the Holy Grail of all more...

The week in pictures

In just one week we've crammed in barrel-aged cocktails at Big Easy, delectable more...

Market for rare whisky 'exceeds all forecasts'

The rare whisky market experienced a “record” year in 2015, with the value more...

Southern Wine to acquire Sterling Distributing Co.

Southern Wine & Spirits of America will acquire Nebraska-based spirits more...

R&B Distillers' plans for Isle of Raasey distillery approved

R&B Distillers has been given the green light to build the first legal more...

Brown-Forman celebrates cooperage, announces JD expansion

Brown-Forman has marked the 70 years of continuous barrel making at its more...

Top 10 best value for money Tequilas

As a new wave of agave aficionados express interest in the category, producers more...

Two new Midleton Irish whiskeys make US debut

Pernod Ricard USA has debuted two new Irish whiskey expressions in the country more...

Oz wine region welcomes $2.5m whisky distillery

The McLaren Vale Distillery is preparing to open its AU$2.5 million facility more...

SMWS partners with Few Spirits for new Bourbon

The Scotch Malt Whisky Society (SMWS) has launched a three-year-old single cask more...

Pernod Ricard H1 profits rise despite China woes

Strong performances in the US, Spain and the UK contributed to a 3% sales more...

Jack Daniel's rolls out Single Barrel Rye

Jack Daniel’s has added a third variant to its Single Barrel collection more...

White Lyan crafts revolutionary new drinks menu

White Lyan is readying to launch a new cocktail menu alongside its own beer and more...

Michter’s Distillery bottles first 10yo rye since 2014

Kentucky-based Michter’s Distillery will launch another batch of Michter's 10 more...

Greenbar launches 'six woods' whiskeys

Los Angeles-based Greenbar Distillery has introduced two 100% barley malt more...

Diageo expands Orphan Barrel whiskey series

Diageo has unveiled the seventh offering in its “craft” whiskey project more...

Speyside Distillers secures £2.3m for expansion

Speyside Distillers Company, whose global ambassador is retired footballer more...

American whiskey boosts US spirits once again

Spirits experienced another year of “steady growth” in the US last year, more...

Top 10 most investible Scotch brands 2015

Liquid from silent distilleries makes up seven of the 10 most investible Scotch more...

SWA meets with Treasury over tax 'burden'

Representatives from Scotch Whisky Association have met with the UK Treasury to more...