Bourbon shortage hits Knob Creek

By Alex Davis • alexdavis@courier-journal.com • July 6, 2009

Fans of Knob Creek bourbon may find their favorite whiskey in short supply this summer as the brand’s bottle warehouses near Clermont, Ky., are empty and the next batch of aged whiskey won’t be ready until November.

Bourbon experts say the looming shortage is somewhat unusual, although brands such as Knob Creek, which is aged for nine years, are more susceptible because their distillers must predict demand far in advance.

“It’s very difficult to forecast out nine-year demand,” said Kelly Doss, senior director of U.S. bourbon and whiskey at Beam Global Spirits & Wine, which makes Knob Creek. “We can only sell what we can bottle and ship.”

Beam Global, itself part of Fortune Brands, sells about 150,000 cases of Knob Creek annually, putting it at the top of the company’s small batch collection, but well below Maker’s Mark, and its flagship Jim Beam bourbon which is aged four years.. Doss said none of those brands are expected to face a shortage this summer.

Beam recently sent T-shirts emblazoned with “The drought of 2009” to 16,000 Knob Creek fans who registered on the brand’s Web site.

The company also plans to use the shortage as a marketing tool in the months ahead, playing on the notion that the lack of Knob Creek is connected to its popularity. A recent company statement announcing the shortage carried the headline “thanks for nothing” and said the brand will be “even more popular and profitable once supply is restored.”

Tom Pirko, president of industry consulting firm Bevmark, said the promotion probably will boost the brand’s image in the short-term. But if it lasts longer than a few months, he said it could prompt customers to switch.

A half-dozen liquor stores in Louisville and Southern Indiana reported Monday that they still had 750-milliliter bottles of Knob Creek available, at prices ranging from $28 to $34. Jerry Rogers, owner of Party Mart, said he’s been sold out of travel-sized miniature bottles since late May.

Officials at Southern Wine & Spirits, which distributes Knob Creek in Kentucky, did not respond to several telephone requests for an interview. Until earlier this year, Republic National Distributing Co. handled Knob Creek’s local distribution, selling 9,455 cases last year in Kentucky.

Republic’s local marketing director, Trae Joyce, said there were sporadic local shortages of Knob Creek throughout 2008, at some points lasting for two to three months.

“We’ve seen a lot more demand for bourbons in general in the last couple of years, especially your aged bourbons,” Joyce said of the older and more expensive brands.

Beam Global declined to provide figures on Knob Creek’s growth for the last several years. Paula Erickson, spokeswoman for Beam Global, said the brand’s looming shortage marks the first time that storage warehouses have been empty.

The next batch of Knob Creek will be dumped from barrels in October, and ready for retailers the next month. Areas that could see tight supplies first include southern California, and the eastern United States. Beam raised the price of Knob Creek earlier this year, she said, but the move was unrelated to the shortage and there are no more planned price hikes.

Charles Cowdery, who writes a blog about the industry and is the author of “Bourbon, Straight,” said Knob Creek has less flexibility with its production timeline because its bottles advertise the fact that the brand has been aged nine years. Some of Knob Creek’s competitors offer rough aging guidelines but don’t state the number of years on the bottle. Either way, Cowdery said the timing of the shortage could help the brand as it approaches the lucrative holiday season later this year.

“They’re getting some publicity out of a real situation,” Cowdery said. “I expect that with Knob, they’ll come back in November right before Christmas with a lot of new supply, and they’ll make a lot of noise about it, and price it to move.”

Reporter Alex Davis can be reached at (502) 582-4644.

Comments are closed.


Powered by WordPress