A $500 Rye Whiskey? Behold the Spirit’s Changing Fortunes

(Bloomberg) -- When Samurai Scientist, the latest release from WhistlePig Whiskey’s Boss Hog series, arrives on shelves later this month, it won’t stay for long. It’s the world’s first rye finished in Japanese Umeshu barrels, and the name—and its pewter samurai topper—is a nod to Jokichi Takamine, the “samurai chemist” who’s credited with sharing traditional Japanese fermentation techniques with western whiskey makers in the early 20th century. 

It also matches the most expensive price that the Vermont-based distillery has ever charged for its rye. Even at $500, it’s still less than what you’ll find on the secondary market, the purview of collectors and connoisseurs. In 2016, WhistlePig released an Armagnac-finished liquid that now fetches upward of $1,000 on resale sites; Boss Hog V, from 2018, was finished in Calvados barrels and can be found online for about $675. 

The release highlights the changing fortunes of rye over the last decade as the spirit shakes off its reputation as a less-expensive alternative to bourbon. Bottles are now carrying price tags typically worn by single malt scotch. 

There’s been a parade of rye offerings seasoned with everything from rum (Angel’s Envy) to red wine (Sagamore Spirit). These labels have lifted expectations of what a rye can be—and with them, commanding prices.

“It was an uphill battle when we were selling $50-a-bottle rye around the year 2000,” recalls Joseph J. Magliocco, president of Michter’s Distillery. His brand’s Toasted Barrel Finish US*1 Rye now retails at $80. “It’s a bit embarrassing, but the first month that we sold 50 three packs—150 total bottles—of all our rye in the entire U.S. market in one month, we were so excited that we had a party in the office.”

In reality there wasn’t much to celebrate. Once the most consumed style of spirit in the U.S., rye had been in steady decline since Prohibition. By 2006, an estimated 150,000 nine-liter cases of rye whiskey were sold in the country, compared with 14.7 million cases of bourbon, according to the Distilled Spirits Council.

The modern cocktail renaissance changed all that. Bartenders interested in resurrecting turn-of-the-century recipes discovered many that were built around rye. Distillers and distributors lined up to get the liquid into back bars and onto menus. Since 2009, sales have increased 1,100%, growing to 1.1 million cases in 2018. 

Good whiskey requires a minimum of two years to be labeled as “straight” (a baseline threshold of quality for bourbon and rye), and typically double that to merit praise. The rye revival caught producers off guard, and many had to scramble to get juice to bottle. En masse, they turned to MGP, a massive Indiana-based distillery that specializes in rye for private label sales. Operating continuously since the end of Prohibition, the industrial facility had ample stock to unload. 

Since so much supply was coming from a single source, barrel finishing became a way for brands to distinguish themselves. In 2014, High West launched a barrel select program as a platform for experimentation. The Utah-based distillery placed its already popular Rendezvous Rye blend into oak pipes that had previously held port. The result, A Midwinter Night’s Dram, went for $90 a bottle.

“We’re not trying to change flavors in barrel finishing,” says Brendan Coyle, High West’s master distiller. “Our goal is to accent the overall profile while not drowning out the base spirit. Wine barrels are a natural fit. They exhibit a red fruit and vinous character that pairs well with the spice elements of the rye.”

Transferring spirit into a secondary barrel after initial maturation is not unique to rye. The category just happens to be better suited to the practice than many of its casked counterparts. “Given the innate qualities of rye and the different styles you can produce—from spicy, to soft and floral, to fruity and baking spice-forward, and everything in between—it stands up beautifully to a variety of finishes,” says Pete Lynch, WhistlePig’s master blender. 

Dave Pickerell would have agreed. The late WhistlePig master distiller presided over the birth of premium rye in 2007. His original 10-year-old product disrupted the market with its $75 price tag—more than three times the cost of most preexisting entries in the category. Next he unveiled Old World, a blend of MGP rye aged in barrels once belonging to Sauternes, Madeiras, and ports. It sold for $120 and has been in limited supply since. 

Even more scarce is the Boss Hog series that Pickerell launched in 2013, now overseen by his protege Lynch. Less than a hundred barrels, matured in oak for upward of a decade, are made. Each edition has showcased flavors far beyond the typical bounds of the category, both stylistically and geographically. 

For the latest release, Lynch headed to the Kitaya brewery in Japan’s Kyushu island. 

Initially, he sought out Mizunara, a rare Japanese oak that is trending in premium whiskey circles. But after tasting a barrel-aged plum wine at Kitaya, he saw something with greater potential to enhance flavor. “Umeshu isn’t usually aged, whereas this one had sat for over 11 years,” Lynch recalls. “It was a very sweet, tart liqueur with an umami-like quality that comes from spending so much time with the fruit.” Those same notes round out the tongue-tingling spice of a big, barrel-forward, 16-year-old rye clocking in at 120-proof. Unusual to most fans of the style in the U.S. will be a chewy mouthfeel, elongating rich, ripened edges. 

As stocks of the spirit mature in warehouses across North America, the value of what’s in those barrels continues to soar. A $500 bottle might soon seem like a bargain for a rye that perhaps spent time in casks formerly belonging to ice wine, walnut liqueur, or amaro. When it comes to funky finishes, this category is just getting started. 
 

To contact the editor responsible for this story: Kate Krader at kkrader@bloomberg.net, James Gaddy

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