The Craze for Pricey Sippin' Whiskey

Dave Gonano loves to drink whiskey and talk whiskey. He has traveled several times from his hometown of Baldwin, Md., to Kentucky for bourbon festivals and distillery tours, chatting up whiskey makers and collected some 300 bottles along the way. On a recent Monday night he could be found in the middle of a crowded Manhattan hotel ballroom having a very good time, enough fun to justify a three-hour train ride and a $145 entry fee. Gonano was drinking a smooth, rich and spicy rye whiskey—21-year-old Rittenhouse—with the man who made it, Parker Beam, the second-generation master distiller at Kentucky's Heaven Hill Distillery. Beam is a member of the first family of American distilling, but he has nothing to do with the company that makes Jim Beam bourbon, whose master distiller is now a man named Dalton. "I like to tell people," Parker Beam joked with a thick-as-molasses drawl, "that every bottle of whiskey from Heaven Hill has been made by a Beam, and that's more than you can say about Jim Beam."

Gonano and about 2,500 other booze lovers jammed long tables on the fifth floor of the Marriott Marquis for the ninth annual WhiskyFest New York, holding out small glasses shaped like hurricane lampshades for short shots of whiskey from the U.S. and Ireland and wee samples of whisky from Scotland, Japan and Canada. (American and Irish distillers generally spell the word with the "e," while Scottish, Canadian and Japanese producers usually don't.) Some hopped from one table to another to get their money's worth—about 1,800 of them paid $105 for the 3½ hour event, while another 600 or so put up $40 more to get an extra hour—but others took their time and chatted as much as sipped. The crowd, like the typical buyer of these top-shelf brown spirits, was mostly white and mostly male, although there seemed to be more women at this year's Fest. "I think we caught the wave of increased interest in whiskey nine years ago," says John Hansell, editor of Malt Advocate magazine and the man who, with his wife, Amy Westlake, produces the WhiskyFests. "People are drinking less, but they're drinking better."

Thanks to a boom in high-priced hooch, the WhiskyFest business is booming: three years ago, a second annual event was started in Chicago, and a third will be launched in San Francisco next October. Since 2002, sales of expensive whiskey have grown by 56 percent, according to the Distilled Spirits Council of the United States, which represents big spirits companies. Single-malt Scotches are doing very well, and so are small-batch and single-barrel American whiskeys. Last year, sales of Jim Beam-brand bourbons were about the same as the year before, while the company's Small Batch Bourbon Collection jumped 13 percent, according to trade publishers the Adams Beverage Group. "U.S. society has become obsessed with quality and luxury goods," says Frank Coleman of the Distilled Spirits Council. "People might not be able to afford a new BMW, but they can buy a $100 bottle of Scotch at Christmas time. It's an affordable luxury."

Some of that luxury truly tastes better. Single malts, for example, have iconoclastic personalities because they reflect the styles of the region where they're made (Islay, off the west coast of Scotland, gives us robust, peaty drams) and the specific whiskey-making DNA of the individual distillery that produces them (taller pot stills put forth lighter and more subtle spirits). But spirits companies use all the cachet they can muster to sell their products, which explains the profusion of kilts being worn by Scots, and a few Americans as well. This Fest included, for the first time, "experience rooms" for a handful of distillers. A fog machine created a "smoky" atmosphere for the formal presentation by Highland Park, a robust single malt Scotch that hails from the far-northern Orkney Islands, while Glenmorangie went against its rural Highlands image with urban music, cute young hostesses and a velvet rope at the door. "It was a little bizarre," said Warren Becker, a Manhattan whiskey lover. "The room was more show than substance."

To attract the high-end whiskey dollar—Scotches that can go for hundreds of dollars, bourbons that approach and surpass the $100 mark—companies have introduced any number of older and rarer spirits. Highland Park, located in the northern Scottish archipelago, the Orkneys, added to its range of 12-, 15-, 18- and 25-year-old bottlings last year with a 30-year-old. (Longer aging in casks will usually give the spirit a greater smoothness and complexity as the spirit and the wood interact, but this can be overdone.) Some distilleries have resorted to out-and-out esoterica. Last year saw the arrival of Woodford-Reserve Four Grain Bourbon, the first commercial whiskey to be distilled from corn, barley, wheat and rye—all others use wheat or rye, but not both, in addition to corn and barley—since at least before Prohibition, and maybe ever. Some 3,000 bottles were released last year and another 12,000 or so came out in August—both allotments sold out quickly, in part because Woodford does not plan to make it again.

Before the current boom, distillers focused on "core" offerings—standard drams that were the same year in and year out. Consistency was paramount and brand loyalty was considered to be the profitable result. Spirits that are different—probably because of the barrel in which they matured—are now considered treasures rather than outcasts, candidates for special editions that come with big price tags. "These are the 12 casks in the back of the second floor that Old Willie the warehouse manager has been hiding," says Jack Robertiello, who edits the Web site for Adams Beverage Group, "and they can do something exciting about it."

Pricey stuff can help sales of cheaper stuff: Old Forester Birthday Bourbon, an annual limited edition, seems to have revived the Old Forester brand, for example. But the limited availability of these bottlings can frustrate consumers and retailers. LeNell Smothers runs a Brooklyn, New York, store, LeNell's Ltd., that's a magnet for whiskey lovers, because she has booze that can't be found elsewhere. But when Buffalo Trace in Frankfort, Kentucky, recently introduced Thomas H. Handy Rye Whiskey as part of its 2006 "Antique Collection," she was able to grab less than 20 bottles—about a fifth of what she could have sold to people on a waiting list. "We put more time and effort into dealing with the waiting list than we'll be making from the sale of the Thomas H. Handy," says the retailer, who worries that some of her regular customers may take offense if they don't get the goods. But Smothers is fighting rye with rye. At WhiskyFest the other night, she was pouring samples of LeNell's Red Hook Rye, a high-octane whiskey that has been produced exclusively for her. It goes on sale this December. "It's a limited edition," says Smothers with a smile, "and it's all mine."