Luxury spirits: Justifying the price tag

9th January, 2018 by Melita Kiely

The meaning of ‘luxury’ may be an ever-evolving term, but one thing’s for certain: demand for expensive spirits shows no signs of slowing. So what exactly makes a luxury spirit worthy of a five-figure price tag?

*This feature was originally published in the September 2017 issue of The Spirits Business

“A whisky’s worth what a consumer is willing to pay,” says Jennifer Masson, marketing manager of Highland Scotch whisky distillery Tomatin. We’re discussing how producers settle on a recommended retail price for their luxury spirits products, and whether there are any instances when these prices are set too high. “It’s a tricky one because it’s so subjective,” Masson explains. “What is considered as expensive to me might not be expensive to someone else. One person might aspire to own a Mercedes and see that as a luxury, while another might consider it an everyday car.”

Over the past year, the luxury spirits market has welcomed myriad spirits releases to its fold that sit in the four­ or even five-­figure price bracket. Tomatin, for example, released the second bottling in its Warehouse 6 Collection in July – a 1972 single malt of which only 380 bottles were made available globally, priced at £2,000 (US$1,546). “We look at the marketplace and we look at what similar brands in a similar position are offering, for what price, and then we see if people are willing to pay that,” explains Masson. “Other times we simply go with our gut. Tomatin 1972 and the 1971 in the Warehouse 6 Collection are the oldest whiskies in our inventory. They’re luxury whiskies because they’re of a certain age, but also because the liquid is spectacular. It’s so special and rare; that’s what contributes to a four­-figure price tag.”

This was also the year that saw Richard Paterson, master distiller of The Dalmore single malt Scotch, celebrate his 50th year working in the whisky industry. To mark the momentous occasion, the Highland distillery released 50 decanters of a Champagne-­finished 50­-year­-old single malt. If you’d like to get your hands on a bottle it’ll cost you though – £50,000 to be exact. Justifying such an astronomical price, Paterson says: “As with any luxury product, price is determined by both the quality of the product and the demand for such a product. As long as there is sufficient demand for rare and unique expressions, we will continue to create whiskies to meet this demand, using some of the rarest and oldest stocks in the world.”

Only 380 bottles of this Tomatin single malt were released

FANTASY BOTTLINGS

And it’s by no means just The Dalmore that has launched whiskies that cost tens of thousands of pounds; The Glenlivet 50­-year-­olds from the Alan Winchester Collection will set you back US$25,000, while Mortlach 75 – the distillery’s oldest bottling to date – was launched in 2015 with a £20,000 price tag. For most consumers, these are fantasy bottlings they’ll never be able to afford – so are these prices ever justified? Absolutely, is the answer from Winston Edwards, distillery ambassador and brand manager at Balcones. “There are always justifications on price – often linked to rarity and scarcity – that are totally valid,” he says. “It’s about how brands communicate what makes their luxury product different and unique. High prices are justified as long as the consumer fully understands what they’re paying for and why it says what it does on the price tag.”

Though there is a market for such extravagantly priced products, evidently targeted at connoisseurs and high­-net­-worth-­individuals, the perception of luxury in the wider world is continuously changing among producers and consumers alike – and has been for some time. The term is no longer only synonymous with expensive, shiny offerings – it has evolved to encapsulate a whole host of different qualities. “I see people today viewing luxury as another word for quality,” says Paterson. “It’s not about flashy, but instead it’s about beautifully handcrafted products. For whisky, it’s about the quality of the casks in which the liquid is stored, it’s about the time it takes for it to mature, about the finessing and finishing that has gone into the spirit’s development.”

Balcones’ Edwards also supports this shift in semantics. One of the Balcones products he regards as a true example of the distillery’s luxury offering is the Staff Selection Single Barrel annual release. Every year, the distillery curates a selection of casks for all employees to taste and vote on. The favourite is then bottled as a limited edition expression and sold at the distillery in minute quantities. “This is a great example of what luxury means to us,” enthuses Edwards. “This is luxurious as it’s an opportunity to recognise time and care that’s gone into the whisky with the very people responsible for crafting it. There’s genuine passion and a story there for everyone to enjoy and understand – that, for us at Balcones, counts as luxury.”

Leave a Reply