Long the drink of choice for American humorists, Irish playwrights, Don Draper types, and various heads of state, when whiskey passed vodka in sales last year, it proved beyond a shadow of a doubt that the spirit is having a moment.
But the movement goes deeper than that. Whiskey isn’t just a good for consumption or a means toward intoxication: It’s a collector’s item, an investment portfolio, and an incredibly valuable commodity. “Whiskey as an investment is being driven by an escalating international demand, combined with an ever-decreasing supply of rare and aged single malt,” the Whisky Corporation’s Stephen Notman told CNN last year. This international demand and decreasing supply has driven serious returns: According to materials provided by the Platinum Whisky Investment Fund, the world’s first whiskey fund, the top whiskeys have appreciated in value anywhere from 130% to, among the 100 best, a staggering 230% from 2011-2013. Interested? The buy-in for the Platinum Whisky Investment Fund’s only a cool quarter-million.
What this has meant for consumers is that certain bottles — you might’ve heard of one range, Buffalo Trace’s Pappy Van Winkle, which can send collectors into fits of madness upon its annual release, and also serve as a target for thieves — become objects of obsession. Enter BottleSpot, one of the first markets designed specifically for trading booze online.
BottleSpot’s entry into the marketplace was made much easier when eBay became stricter about their ban on alcohol sales following a 20/20 report in 2012. Its founder, Patrick Corcoran, who has a day job in tech, started the site in the middle of 2013 as a passion project designed to facilitate his interest in scotch.
“At the time, I was very much into Scotch, and I didn’t see an easy way to buy, sell, and trade with other scotch drinkers,” Corcoran says. “There are a lot of secret Facebook groups, Reddit groups, but no singular location for this stuff to take place.”
The bourbon boom gave Corcoran’s site some legs, and he eventually brought in online vendors that could sell their wares specifically through BottleSpot. The site now exists as a mix of those vendors, who’ve listed about 110,000 bottles over the past year and a half, and private sellers/traders, who have listed around 5,000. While BottleSpot has a catholic approach to alcohol, Corcoran said that whiskey is by far the most-frequently sold and traded, followed by cognac, tequila, rum, wine, and craft beer.
Corcoran breaks the users of BottleSpot down into four different groups: the drinkers, enthusiasts who are looking to acquire bottles for their own enjoyment; the collectors, who might not be drinking most of the bottles they acquire; the investors, who are acquiring bottles specifically to hold on to them as they appreciate in value; and then the fourth group, the flippers, who are sort of the black sheep of the whiskey world. Flippers are the types of folks who will buy bottles of highly sought-after whiskeys and then try to sell them for up to a 1,000% mark-up.
“Pappy Van Winkle 20 Year will sell more or less immediately for $700 a bottle, and that lists for around $180 a bottle,” Corcoran said. “Before BottleSpot, many of these exchanges took place on Craigslist, where you couldn’t tell the fair-market value. You’ll still see people on BottleSpot asking for $2,000 for a bottle of Pappy Van Winkle 20 or 23 Year because they’re unaware that they can’t get anything near that on a site like this. We have had the positive effect of stabilizing some of the after-market prices.”
The site’s action is largely in the United States, with international users constrained by the language barrier and the European tendency toward auctions, Corcoran said. But there is still an international presence on the site, and Corcoran has plans to add an eBay-style auction functionality in coming months. What this does mean, though, is that the site’s most interesting aspect — its bottle-for-bottle trades — have strong local and national concentration.
Gustavo Delgado, a collector in his mid-20s who lives in Los Angeles, has acquired about six bottles through trading. “I would see people posting about trading and exchanging bottles in the comments sections on whiskey blogs,” he says. “I always thought the idea was neat, but didn’t realize it was so prevalent until I started looking a bit deeper after a mostly unsuccessful fall bourbon season. Most special release bourbons, at least the big ticket ones, Pappy, Buffalo Trace Antique Collection, et cetera, get released in the fall, so it’s when most bourbon-hunters are prowling.”
Delgado thinks there’s an interesting balance between community and self-interest: While buying bottles available in your area (just so you can trade them with people who don’t have that access) can feel a little shady, it’s the only way to then get a hold of the bottles you’re looking for. And if you play fairly, it has dividends.
“The best was a few weeks ago, when someone I’d emailed with a few times emailed me to tell me that something I was looking for was being sold by someone local to him. It was a bit bizarre, but so cool that someone across the country knew what bottles I was looking for and was looking out for me,” Delgado said. “As whiskey gets more popular, the only real hope for trying something new and exciting is either paying an arm and a leg for it or finding someone who’s pumped to share.”
Of course, this is all possible because of the Internet — and not only the Internet, but the communal Internet. If Craigslist was the web equivalent of meeting someone on a street corner, BottleSpot and social-media groups are like regular clubs, run by the same people, where folks can drop in and out, looking for and offering whatever they have.
“Bourbon producers themselves will admit they would not be in the position they are today if it weren’t for the web allowing people in all corners of the earth to discover information about their whiskey at the click of a button,” Becky Paskin, editor of The Spirits Business magazine, said over email. “People have formed their own cliques on sites like Reddit and Facebook where they share information about hush-hush new releases, which shops will stock the rare items before they are launched, and even what time they will go on sale. If it weren’t for social media, there simply wouldn’t be the level of interest in whiskey we see today.”
Paskin thinks that these new means of trading are here to stay, and not only because of their convenience. With the egalitarianism of the new whiskey-collecting environment, and the availability afforded by the web, some of the old ways are prohibitive, for any number of reasons, cost, familiarity, and access among them.
“The most dominant method of collecting rare whiskey is through live (or Internet) auctions, which often carry extreme auction fees and can lead to inflated hammer prices depending on the level of demand for the item,” Paskin said. “Free exchanges, provided they are monitored and can guarantee some degree of safety, such as mandatory user registration, could see more collectors migrate from auction sites."
One of the most interesting things about the ascent of the whiskey business is it can distract from the passion and love that most collectors have for the game. When you hear words like “whiskey fund” and “1,000% markups,” it belies the fact that most of the folks who are doing this are still drinking most, or at least some, of their hauls. Pappy Van Winkle isn’t famous just because it’s expensive — it also tastes fantastic. And even the bottles that aren’t getting consumed aren’t getting consumed for very good reasons.
“I am, at the most, collector-level,” Corcoran said. “I own maybe two bottles right now that I don’t intend to open myself. And that’s because they’re birth-year bottles for my son.”
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