People are splurging on spirits now more than ever before. Of course, the definition of "splurge" varies from person to person, but how are liquor brands convincing imbibers to purchase bottles of booze that are worth the down payment on a car? Or house?
What is Ultra-Premium?
Where does the "ultra-premium" category begin? The Distilled Spirits Council of the United States (DISCUS) divides all spirit categories into four segments; Value, Premium, High End Premium and Super Premium. The price points of each depends on the particular spirit and is categorized not by a retail price per bottle, but rather, by supplier revenue per case. In this way, from the consumer’s perspective, their Super Premium category sets a relatively low point of entry in terms of pricing.
Diving into those category statistics, it’s intriguing to look at the segment split per spirit. For instance, more than 70 percent of Cognac sales and 50 percent of Canadian whisky sales fall into the Value segment, while single malt Scotch is skewed in the other direction.
It's also worthwhile to see which categories are on the rise. Across all spirits, Value sales dropped by 1.3 percent in 2014, while High End Premium increased by 5.8 percent and Super Premium increased by 5.1 percent. Clearly, there's a growing interest in the top tier of the marketplace, and people are indeed splurging more.
Across all spirits, Value sales dropped by 1.3 percent in 2014, while High End Premium increased by 5.8 percent and Super Premium increased by 5.1 percent.
Per DISCUS's industry-focused definition of those market segments though, it's still difficult to determine where exactly "ultra-premium" begins for the consumer. For this discussion then, let's consider this segment a step beyond the above tiers, referring to any bottle priced above $150 or $200 as a loose beginning.
Ultra-premium here refers to products which hit the regular retail market, albeit typically in highly limited supply, and are priced, packaged and promoted with prestige in mind. Therefore, this does not include the inflated secondary market, as people pursue their obsession with Pappy Van Winkle, nor does it include the auction market, where prices occasionally ascend to six figures and beyond, as with this recent record-breaking example.
A spirit like Macallan Rare Cask is a great example of an ultra-premium expression, with a suggested price of $300. It's marketed as a high-end offering and a special occasion whisky, and it’s indeed a beautiful dram. Still, it's one that the buyer or recipient will actually drink and enjoy, as opposed to stashing away for eternity. It’s also only an entry point to the ultra-premium market, with prices quickly exploding from here.
Moving up the chain and veering farther into the realm of boozy extravagance, the ultra-premium retail market consists largely of collectible releases. They’re offered in exquisite crystal bottles or decanters, with display cases and authenticity certificates. Liquor expert and author Dave Broom has previously said of this luxury market, "it’s whisky as bling." These releases are about exclusivity and rarity, it's something to show off to friends or colleagues.
As one example, take the new Glenfiddich 1978 Rare Collection Cask. This is a cask strength, 36 year-old expression with only 150 bottles produced. It’s a U.S.-exclusive release, and each bottle comes presented in a hand-crafted leather box, individually numbered and including a copper foiled leaflet with cask information. Suggested pricing is $3,500. Bling bling.
There are also limited edition releases which, in some cases, have celebrity tie-ins or other such unique marketing positions. Anything to be collectible, and to have a compelling place in the market.
For instance, while Jack Daniel's is not typically associated with "ultra-premium," they do have a place in the market with their new Sinatra Century release. Priced at $500, Sinatra Century was made to honor famous Jack Daniel’s devotee Frank Sinatra’s 100th birthday. Each bottle includes a CD of never released live Sinatra tracks, and is enclosed in a luxury gift box.
As prices escalate and releases grow ever rarer, the question becomes not only can you afford the bottle, but if you can, then do you ever even open it, or do you preserve it indefinitely? The Last Drop 48, a blended Scotch, seeks to solve that problem, as each collector’s set comes with an airplane bottle sized sampler to taste while leaving the actual bottle unopened. With a suggested price of $3,999, there were only 592 bottles made available in the release.
This release from The Last Drop isn’t so prized solely due to its age, but also because it incorporates whisky from shuttered distilleries. Another similar example is the 2015 Ladyburn 42 year old single malt release by William Grant & Sons. Priced at $2,000, there are only 444 bottles in the release, coming from leftover whisky stocks produced at the now closed Ladyburn distillery, the shortest operational distillery in modern Scotch history.
William Grant & Sons also incorporates some younger Ladyburn whisky into its Rare Cask Reserves Ghosted Reserve release. This is a 26 year-old blend priced at $400, which also incorporates whisky from a second closed distillery, Inverleven.
Of course, for most people $500 certainly qualifies as ultra-premium, and $5,000 is beyond extravagant. Still, there’s even loftier territory to explore.
Consider the Glenmorangie 1970s Collection, unveiled earlier this year. Only 10 sets were released, each including five exceedingly rare bottles of Glenmorangie dating to the ‘70s. The bottles were selected for their excellence and rarity, while also signifying key aspects of the brand’s development and style. Each set sells for $50,000 and is presented in a hand-crafted wooden display case.
The Balvenie has a match for that with its new DCS Compendium, due out for release in January. The release will stretch over five years, with each year, or chapter, including five whiskies representative of the five decade career and legacy of their malt master, David C. Stewart. The first chapter, with 50 sets available worldwide, is priced at a cool $45,000.
Johnnie Walker is never one to be outdone, and for those who thought that Blue Label was their top offering, well, guess again. The John Walker & Sons Collection is topped by John Walker & Sons Diamond Jubilee, a 2012 release made to honor Queen Elizabeth II.
It was made with 60 year-old whisky in celebration of her 60 years in power, and only 60 bottles were produced. Each has a diamond set in its silver collar, on a tantalizing Baccarat crystal decanter and stand, all of which is then presented in a handcrafted wood cabinet. It's priced at $200,000 and proceeds go to charity.
Cognac, Rum & Tequila
Whiskey isn’t the only player in the ultra-premium stratosphere. Take a look at tequila, which is really just entering the space. Patron has several notable offerings which first hit store shelves at the start of 2014. That includes Gran Patron Piedra, priced at $399, and Gran Patron Burdeos, priced at $599.
Patron upped the ante for this holiday season with the Patron en Lalique series. The tequila incorporates their oldest and rarest stocks, and only 500 bottles are available, each in a Lalique crystal decanter presented in a leather display case. It’s priced at $7,500.
Rum is no stranger to ultra-premium, either. Brugal showcases some of their family reserve stock with Brugal Papa Andrés 2015 Alegría Edition. Only 1,000 were made available, priced at $1,500 with proceeds going to charity. Each is offered in a crystal decanter set in a presentation case designed by artist Javier Mariscal.
As prices escalate and releases grow ever rarer, the question becomes not only can you afford the bottle, but if you can, then do you ever even open it, or do you preserve it indefinitely?
Puerto Rican rum producer Don Q is notable in this realm as well. They celebrated their 150th anniversary this year with the exclusive Reserva de la Familia Serrallés. With roots stretching to 1865, only 1,865 bottles were released, priced at $1,865.
Despite the fact that the bulk of Cognac sales are in its most affordable tier, the major producers here all relish their high-end, exclusive releases.
This year, Hennessy celebrated its 250th anniversary, and released Hennessy 250 Collector Blend for the occasion, an expression specially made from 250 casks, sized at 250 Liters. Each bottle sells for $600, and is presented in a display case. Of course, that’s nothing compared to Paradis Imperial, priced at $2,999, or Richard Hennessy, priced at $4,200.
Courvoisier has their own match, of course. Their ultra-premium release is L'Essence, priced at roughly $2,500. It incorporates Cognac stretching to the early 1900’s, and is offered in a gold lined, suspended Baccarat crystal bottle and stopper.
Martell offers L’Or de Jean Martell, "gold from Jean Martell," at roughly $3,500. According to the brand, Baccarat declined to make their crystal decanters due to the difficulty involved in producing these delicate, gold-lined bottles. The other company they utilize still breaks two to three of every 10 bottles in production.
Remy Martin offers Centaure de Diamant, a $1,000 per bottle release unavailable in the U.S., with an average age of 50 years. That’s an affordable youngster compared to Louis XIII, aged for up to 100 years and priced between $2,500 to $3,000. Then there’s the Louis XIII Rare Cask releases, even more exclusive editions which bring in prices north of $20,000.
For those who can't shell out for a full bottle but are perhaps willing to indulge on a "lesser" scale, certain establishments from steakhouses to luxe hotels are known for their ultra-premium booze lineups. In this case, the purchaser also typically gets to enjoy a unique experience.
Del Frisco’s Double Eagle Steakhouse, for instance, has one of two bottles of Louis XIII Rare Cask in Manhattan, of 738 available globally. They offer one ounce pours for $1,395, and half ounce pours for $800 using the official Remy Martin pipette—the tool required to extract a spirit straight from a barrel—to pour a drink tableside.
Yes, people do order it, and with advance planning, the restaurant will go the extra mile to make the experience all the more memorable, bringing in a Remy Martin ambassador for a hands-on educational tasting. Plus, the customer who buys the final pour from the bottle gets to keep the nifty decanter and case. It’s a bargain and experience to good to pass up in the world of ultra-premium.