Why I Started Loving Scotch
Scotch is a wonderful libation. I didn’t know this when I started my journey towards loving scotch, but 17 years later, here I am. How did I get here? My journey started in college. As one is wont to do in college, I would go out on the weekends to bars and clubs with my friends. Unlike many of my friends, I was uninterested in downing myself in vodka orange screwdrivers or other such horrendous drinks that pair fruit juice with cheap alcohol. Instead, I opted for a “known” known. Scotch, single malt, clearly labeled. When I started this, I didn’t know there were hundreds of different types of scotch, about how each region of Scotland produced different variants, what differences the cask itself made in the scotch taste, etc. Scotch was, at the time, simply a drink where “chugging” is an offense, where the drinker should sip and savor. I avoided hangovers and awkward mornings. My habit was probably better for my wallet and waist too.
Experiences
But, like many things, experience is a teacher. I did learn about each region, finding that I particularly enjoyed the coastal offerings such as Oban. I learned about Scotch that was given a second cask, typically wine, for extra flavorings (This process really creates very complex tastes with multiple phases). Becoming a scotch fan, it gave me impetus to travel to Scotland, twice so far. There is little more beautiful in this world than the Scottish Highlands. In addition, a few years after starting on my scotch journey, I did make one indulgent purchase: I bought a share in a full cask of scotch. 16 years later, my share of scotch arrived. Quite literally last week, I journeyed back in time and appreciated that mid 20s Motoconomist had pretty good taste.
Economics Lessons From Scotch
Scotch exemplifies the tradeoff. In my humble opinion, Scotch becomes better with age, but price rises faster than age than taste rises with age. Hence, a tradeoff, an inflection point that differs for every individual, but it exists. Call this the Scotch curve, and there is just as much science behind it as the Laffer curve. I kid, the Scotch curve has more science. Why this tradeoff exists is important, because it mirrors another economic concept, scarcity.
Scarcity impacts not just the price paid for a particular item, but scarcity impacts how we THINK and ACT about an item as well. For some, the age of scotch reflects scarcity and therefore MUST be better. But this is a value proposition. Scotch in cask loses 1-3 percent of its total volume each year, we call this the angel’s share. Because there is less of it, surely older scotch must be better. But it is better on a value basis. I find the inflection point occurs somewhere between 15 and 18 years of age. Beyond this, scotch becomes far too mellow, and before this, the back end is a bit too spicy.
Scotch also exemplifies how much branding, advertising, and entrenched interests have on what we consume. Distillers put age on their bottle not because it is perfectly correlated with taste, but because they’ve engineered a Pavlovian response to age by the modal consumer “Older is better.” And it is taken as given that scotch must age in an American Whisky barrel and that barrel cannot be reused (great employment for cask makers and designed obsolescence as a further job guarantee). Finally, scotch requires extensive capital investment with a very long time to before revenue is realized, talk about a barrier to entry and why we see so few new distillers open. For more discussion, see Simon’s blog.
PS: The best value for money Scotch today is the Glendronach 15 year Revival.
Is that the whisky now known as Revival?Report
Yeah. oopsReport
This is SUCH a great blog dammit. Center-leftist here, who enjoys random info, learning, as well as hearing from the sensible from the side. I don’t actually drink scotch. Otherwise great post tyReport
Thanks dude, glad you enjoy the odd topics we cover =)Report
I like scotch and Japanese whiskey but it took me longer to get into them. I did not like them until my mid-30s except in cocktails. I can buy a decent bottle of scotch for 40 dollars (I like Schackleton). But there do seem to be some super-expensive whiskeys out there because of branding. Pappy Van Winkle comes to mind. Booze guys I have known and respected called it overpriced. I am a big fan of Hibiki 17 but it has gone from an expensive but approachable 150 dollars a bottle to 900 dollars a bottle.Report
I’ll be over here on my bourbon fainting couch clutching my Pappy van Winkle and whispering soothing words.Report
You aristocrat. I live on a steady supply of Four Roses small batch. Not super fancy but always does the trick.Report
Luxury.
Pure luxury!
I drink a diet of Pruno made with the dregs of Kool-aid fermented with stale crusts of white bread in a stainless steel prison toilet for 20 days and served in a used jelly jar with the jelly still in it.Report
Hats off to you, sir. And I wish you the best of luck in your next switch-blade fight.Report
Lucky.Report
I can’t believe no one got this.Report
Heh. The amount of money people will pay for corn squeezins will always give me a chuckle.Report
I’m a wheated bourbon guy. I’ve liked it as far back as I can remember (at least age 16). Pappy’s is the most famous of them, and I got to try it once years ago. I agree with your booze guys: it’s certainly not worth the price, at least for me. Maybe there are people with a golden sense of taste that can tell the difference, but I’m not one of them. If I’m just going to sit and talk with friends, Maker’s Mark is fine and always available.Report
WAAAY back when, more than 12 years ago at least, I managed to score a bottle of 20 year old Pappy’s as a gift for my SIL. It was only @ 125 dollars. Several years later, she gave the last ounce to her new father in law and everyone started googling the brand…it was then I realized the secondary market was pricing it at 1K per bottle. My dad bought me the 20 year old bottle and got himself the 23 year old bottle to see what all the hype was about. I had some of the 23 year old. It was very good, but not 1K good. If I ever could find it for 150 bucks, I might get a bottle. Doubt I will though.
I content myself to balvenie double wood when I can afford it.Report
Finally, scotch requires extensive capital investment with a very long time to before revenue is realized, talk about a barrier to entry and why we see so few new distillers open.
Is that really a major barrier to entry? Currently, capital is abundant, interest rates are low, and asset prices are high. I don’t know much about the cost of distillery equipment, but I see numbers like 5 million pounds being thrown around; I don’t have that kind of money to invest in a still, but it’s not really that much, as startup costs go. If the market isn’t saturated and capital requirements are the main barrier to entry, it seems like we should be seeing a lot of new distilleries opening up.
According to this, there have been about 30 distilleries opened since 2013, which seems like a lot for a country of 5 million:
https://www.whiskyinvestdirect.com/about-whisky/malt-whisky-distilleries-in-scotland
Conversely, only two extant distilleries were established between 1977 and 2003. Interest rates were higher in those days, so that could be a factor, but maybe a bunch opened and went bust in the intervening decades.
It would be interesting to get historical data and see if there’s a correlation between interest rates and distillery establishment.Report
I’m sorry that I won’t be able to supply any kind of link, but in reading up on Scotch recently, I came across an article that talked about how the industry went into a severe decline in the 50s and 60s, and then had a resurgence later on. I think the article linked an increased consumer appreciation of the vintages of wine to more interest and experimentation with Scotch. Wish I could remember where I read that…Report
Mod gods I did not mean to report rex’s comment. Touch screen fail. I apologize!Report
Good point. Changes in expected demand could be a major confounder of the relationship between interest rates and establishment of new distilleries.Report
I don’t think it’s necessarily that high for a product with global demand, especially since by definition it can only be made in the 1 place.Report
If it’s not distilled from a bog in Scotland, it’s just Sparkling Whiskey.Report
YOU CAN REALLY TASTE THE PEAT
This was told to me as if it were a selling point. As if it were a reason to change away from drinking wine.Report
Precisely!Report
BREAKING: Russia announces that only Whiskey brewed in Sevastopol region may be called Scotch.Report
Sorry, “special snowflake” comment. I am (was) nearly a non-drinker. Very rare drinks (occasional margarita at a Mexican restaurant and not much else). Except for two exceptions: 1) a stress-filled year overseas in the Marines; 2) summer of ’79 living in an apartment complex in Hollywood with a bunch of actors and musicians. Two sodden times, but no other significant or even close to habitual activity.
Until, that is, my 70th birthday (last August) when lovely Femrex bought us a bottle of The Dalmore 15 single-malt just to try. To my surprise (I’ve just never cared for the taste of alcohol) it was really good. Smooth, complex, yum. So we tried a couple of others (about a shot per night) and found we really liked them. Didn’t care for the smoky ones, liked the sweet and fruity ones. (No Caol Ila, if you please, but plenty of Macallan, Glenfiddich, Tomatin, Glenlivet, etc.) Still just a shot per night but over the past ten months, it’s been fun.
One other, to me rather spectacular and unexplained phenomenon…my severe, regular, crushing cluster headaches disappeared. Gone, evidently in conjunction with the Scotch. No explanation from the medical world (other than a frown and a bit of disapproval for “self-medicating with alcohol.” Hey at one ounce per evening, I’m not worried.) I get a bit of what might be called a “hangover headache” at about three hours after the ounce, but the Big Bads are just plain gone. It’s a mystery, but a welcome one.
YMMV. We really love the flavor, savor the various complexities, and I enjoy the “cure.” In regards to the point of the article…we find that the 18-year old Macallan is terrific, but not really better than the 12-year old Macallan (both sherry oak casks) and the 12 costs a hell of a LOT less.
Thanks for a great post!Report
I am by nature a bourbon drinker. I know because my scotch bottles last way longer. For me, my favorite of the scotches is probably Craigellachie 13. Also like Oban but I feel like you can get that everywhere so less interesting.Report
I like Oban a lot as well.Report
Maybe not the most interesting Scotch out there in the opinion of some, but a damn good one regardless.Report
I’ll agree on the beauty of the Highlands. Truly a noble people, the Scots. I had the pleasure of touring the Edradour distillery in 2018, and being in their warehouse was truly a fine experience. There’s a word for the atmosphere inside one of those places, but I can’t think of it right now, but it was heavenly. The beauty of Scotch is that no 2 labels taste the same.
One of my favorite moments in the show Parks and Recreation is at the end of the series when Ron Swanson comes to own Lagavulin.Report
I never really thought about it, but I guess I had always kind of expected Scotch to taste like butterscotch, but not sweet. I was disappointed to find out that it mostly just tasted like burning.Report
Good liquor shouldn’t taste “Just like Burning” (I will drink a good smoky whiskey)
Find some quality rum, instead.Report
Word up to that. I’m a Laphroaig man, for its deep smokiness. And while it comes in several varieties and price points, the 10-year product is a fine sip indeed. A small splash of cold water, or one of those big ice cubes, really wakes up the flavors.Report
I think I’m an alcohol supertaster or something like that. In any kind of drink over 10% ABV or so, the chemical taste of the alcohol totally overpowers everything else. It tastes like I’ve always imagined paint thinner would.
It’s probably for the best, since alcoholism runs in the family.Report
I had a bottle, whose label I sadly can’t remember, which taste had a lovely caramel finish. It was a real surprise.Report
I remember seeing a Fancy Gin Manufacturer proudly put “5XD” on their label, and the back explained that this meant it was distilled five times, with the implication being that this made it five times as good, but if you know anything about the process of making gin, you’d know that distilling five times is the industry standard, so putting “5XD” on the label is like putting “contains alcohol” on it…Report