Oak barrels at the Brown-Forman Cooperage are ignited to char them on the inside, a process that colors and flavors whiskey and bourbon. The barrels, which are used entirely for Brown-Forman’s own spirits production, will eventually contain bourbon brands such as Woodford Reserve, Old Forester and Early Times. William DeShazer for The Wall Street Journal
In 50 years of making bourbon barrels, no one had ever offered Leroy McGinnis more than what he charged for them. But over the past six months, multiple distillers have offered to pay him $250 a barrel—a 70% premium above the $150 list price.The whole article is worth reading. It highlights an extremely small niche market that got hit by the fickle nature of consumer demand. Check out all the photos, they are a fascinating view into a nearly dead trade which has seen a massive renaissance.
The offer illustrates just how scarce bourbon barrels have become. As bourbon sales have soared, both barrel production and the lumber industry have struggled to keep up.
Mr. McGinnis’s Missouri-based company, McGinnis Wood Products Inc., gets about four email requests a day for barrels. He turns most down. Like many of his competitors, he has only enough capacity and wood to fill orders from longtime customers. The rest go on a waiting list, perpetuating a bourbon barrel shortage now entering its third year.
“There’s never been nothing like there is today, and I don’t see it letting up,” said Mr. McGinnis, whose Cuba, Mo., company will sell 150,000 bourbon barrels this year.
The shortage reflects a supply-chain conundrum. Upstream, barrel makers face a wave of demand because a half dozen established bourbon distilleries and 300 new, craft distilleries are increasing production amid a bourbon boom. Downstream, they face a shortage of white oak wood used in barrels because the lumber industry hasn’t rebounded from the housing market’s collapse.
Bourbon barrel making is nearly as complicated as bourbon making itself. Bourbon is aged a minimum of two years in new barrels made of white oak. (The barrels are never reused for bourbon, but Scotch and tequila is sometimes aged in old bourbon barrels.) Cooperages, which are what the barrel makers are called, fit oak planks known as staves together like puzzle pieces, encircle them with metal hoops, and ignite them with fire to create a char inside to color and flavor whiskey.