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Time to Buy Rye

Posted on  | December 22, 2014   Bookmark and Share
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If there were an endangered species act for American spirits, rye certainly would have qualified for protection at the turn of this century. Down to only a few brands that were mainly stuck on the periphery of the shelf or out of the line of sight on the back bar, rye had fallen far from its pretty perch as arguably the original American spirit. While bourbon had survived Prohibition and later the vodka craze, rye had slowly but surely faded from relevance.

But since its lowest point, rye has come roaring back, growing by double digits each year for the past few and up more than 35% in the 52 weeks through October 2014 according to recent figures, building on numerous trends that have created the perfect climate for the American spirit more closely associated with Maryland and Pennsylvania than Kentucky.

Of those trends, the return of classic cocktails in which rye often plays a prominent role has been most important. Manhattans and Old Fashioneds aside, the international American whiskey boom has returned focus to authentic styles of bourbons and ryes alike. And finally, contributing is the contemporary craving for authentic products with real stories and the concurrent surge of micro-distillers, who in many cases are working with rye (or selling rye made elsewhere,or both).

Even Canadian whisky makers, who have lagged behind their U.S. counterparts in featuring rye as a key component of their wares, have gotten into the mix. Pernod Ricard has in the past year or so started to push J.P. Wiser’s Rye, with smaller brands Lot 40 Pot Still Rye and Pike Creek also receiving attention. Canada has already been the source of two of the minor success stories in the category: WhistlePig and Lock, Stock & Barrel. (Different rules in the two countries can create confusion, however; while in this country, to be called a rye a product must be at least 51% made from that grain, Canadian rules are less bothersome and allow almost any product containing some rye to be called “rye.”)

Not to be outdone, Kentucky is starting to sink its teeth deeper than ever into rye. Rye is a big reason, for instance, why Michter’s is building two new distilleries. Also notable on the horizon is Brown-Forman’s Woodford Reserve Rye, a follow-up to a limited edition from a few years ago that will join the flagship brand as the first permanent line extension.

Hot Both On- & Off-Premise

While most brand reps say sales of rye skew higher on-premise than average, retailers are also reporting growth. “There has certainly been an increase of rye enthusiasts,” says Erin Robertie, liquor department manager at the 35,000 square foot Hazel’s Beverage World in Boulder, CO. “It spans from cocktail geeks to grain experimentalists. We have a handful of customers that only shop for ryes.” She acknowledges the cocktail craze as a contributing factor, but also points out that rye’s drier, more spicy flavor profile fits a trend away from sweeter drinks.

Robertie also credits the limited- edition ryes—specifically those from Buffalo Trace including their Antique Collection brands Thomas H. Handy and Sazerac 18—for “catapulting the category into the forefront of whiskey drinkers,” as well as making room for other limited expressions like Willet Rye 7-9 Year and Angel’s Envy Rye.

Those ryes have limited availability, but even the big distillers have been having a hard time filling their orders until recently. Heaven Hill’s Pikesville Rye has been “on sabbatical” while stocks were brought up to par; and the distiller struggled to fill orders for their Rittenhouse Rye, a 100-proof brand that was in the forefront of the return to rye, says Director of Corporate Communications Larry Kass. “We’re finally now starting to get caught up. This is the first year in a while that we’ve been able to make new placements and get our inventory and stocks in line,” says Kass.

Wild Turkey found itself in a similar bind, says Andrew Floor, Senior Marketing Director for Brown Spirits for brand owner Campari. When finding itself short of the benchmark Wild Turkey 101 Rye, the company introduced Wild Turkey 81 Rye, which, while it garnered many new fans for the whiskey style, also alienated numerous bartenders, who created a Facebook page seeking 101’s return. Well, the company listened—and has reintroduced 101 in a highly allocated version for bar use, with plans to expand distribution next year.

Similar issues plagued Campari’s Russell’s Reserve 6 Year Old Rye. “When demand took off, we just didn’t have the liquid,” says Floor. “It’s even harder when you have an age statement whiskey. We went through a significant period of out-of-stocks and we suffered some because of it. But we’ve gone through our year of pain and rye supplies are loosening up, and I have to assume the other major distillers have gone through a similar process.”

Midwest Brown Gold?

Much of the rye gap has been filled with spirit coming from the giant former Seagrams distillery now called MGP of Indiana, which has supplied numerous brands, like Bulleit and High West among many others. High West has used their share to create unique expressions, like Rendezvous and Bourye, as a bridge until the day their aged whiskey is ready for release.

A recent piece about MGP as an unpublicized source highlighted what many in the industry already knew, but also called into question the lack of transparency in marketing of numerous brands. David King, president of Anchor Distilling, maker of pioneering brand Old Potrero, says that going forward, brand owners will need to be more forthright, especially as the rye volume growth slows naturally as more liquid is made available, but prices also rise. Anchor has been gradually increasing the amount of Old Potrero made each year but King says he believes he could sell out “ten times more than that” at this point.

Campari’s Andrew Floor points out MGP’s importance in the overall rye resurgence: “Without [them], rye might not have got the traction it did. Even with our quite sophisticated forecasting we were caught by surprise, as were other producers. It would have been really tough for this segment if there wasn’t another source of liquid. 

Jockeying for Market Position

Not all distillers were caught short; the three Beam Suntory ryes—Jim Beam, Old Overholt and Knob Creek Rye—are growing double digits and ready for more. The company plans to repackage Beam Rye, boosting it to 90 proof in response to bartenders’ request for more potency for their cocktails, says Chris Bauder, General Manager of Whiskies at Beam Suntory.

Bartenders and retailers have been seeking single-barrel ryes from the company, and being able to make that happen is an advantage Bauder sees larger distillers having: “If you’re not producing your own, obviously you can’t do that.”

Other distillers, once supply has been balanced, have new ideas as well. “We’re always looking and planning,” says Kass. “It was all we could do to keep up with demand here over the past four or five years, but we’ve been able to squirrel away some and we’ll be releasing a few older ryes in the next few years.”

David Perkins, proprietor of High West, has been selling sourced rye they tweak while he ages his own Pennsylvania-style 100% rye whiskey, a style he likes for the flavor and its connection with American distilling heritage. He has sourced from MGP and Barton Distillery, and admits half his payroll is supported by those sourced products. High West now sells its own unaged rye made in Park City, Utah, and will be opening a new distillery nearby soon.

Overall, Kass likens the sudden rye explosion to a microcosm of the American whiskey boom, but thinks the fly-by-night brands will end up caught out. “Rye has gone through an accelerated growth spurt in six years or so, but there’s a whole lot more sophisticated consumer out there now,” he says. “You can’t bring a label out anymore and expect that people are blindly going to try it. You have to have a story that’s airtight and true.”

One well-established brand positioned to tap in to rye’s growing popularity is Michter’s. According to local lore, rye whiskey made by the company that would ultimately be known as Michter’s was the personal choice of General George Washington to fortify his troops during the brutal Valley Forge winter. Complementing that unique backstory, the modern Michter’s Rye has a great hook: every bottle of the 84.8 proof liquid comes from a single barrel.

Craft bottlings are a wild card to consider in the rye equation. Rye, with its spicy character, has carved itself an image as bourbon’s cooler cousin, perfect for classic cocktails and budding connoisseurs. Small distiller successes include FEW and Koval, both made in the Chicago area; and Tennessee’s Corsair whose Ryemaggedon is only one of their many explorational grain whiskies. A brand new craft entry to watch is Rogue Farms Oregon Rye Whiskey, made start to finish on a single farm, used a strain of “Dream” rye apparently so special that Rogue trademarked it; 374 cases were released in December.


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