Why Rye Will Overtake Bourbon in 2016

Mj 618_348_2016 the year rye unseats bourbon
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After years of rebuilding its legacy, rye whiskey is ready to take on the champion for the title of most beloved brown spirit in the U.S. It's an underdog category in terms of volume, but that's more a problem of small supply than lower demand. To understand what we'll see this year, we need to look at 2015, and the past few years.

Last year closed with a huge milestone for rye: Crown Royal's Northern Harvest Rye is still scarce after the Canadian "masterpiece" won Whisky of the Year from famed spirits author Jim Murray. While that bottle has been bringing a lot of attention to the sleeping giant of Canadian whiskey in the last few months, the real recognition here is for rye as a general category, which has finally stolen the attention that malt and bourbon whiskeys have long garnered.

That's because rye has been making gains on its competitors for years. But not in the ways that you might suspect. It's not that rye will surpass bourbon in volume of sales anytime soon. In 2014 the U.S. produced 19 million cases of Tennessee and bourbon whiskeys, and just over half a million cases of rye. That's a nearly 40-to-1 ratio. It's the same when you look at revenue, when 2014 saw $2.6 billion for bourbon and Tennessee whiskey versus $100 million for rye. 

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So what's the big deal? Growth. And growth potential. Rye has exploded astronomically faster as a category than its competitors as American whiskey has gained popular appeal. In the period from 2009 to 2014, while bourbon and Tennessee whiskeys as a category grew by 28.5 percent by volume, rye has grown 536 percent — nearly 20 times faster, with that speed of growth expected (by some unnamed sources in the industry) to continue. That's not a number that indicates rye is piggybacking on the industry. Instead it shows the category has its own following. And they'd sell much more if they had it to bottle.

In the past, American distillers mainly created rye whiskey as part of the blending process for bourbon: typically you get a majority of corn, some minority of the final blend being rye, and the rest being malt (there are exceptions, but that's another story). But distillers have been ramping up that production to bottle rye on its own. That's why Heaven Hill released Pikesville last year, and Woodford released Woodford Rye.

Diageo, maker of some of the major products in the category, is seeing the pattern continue. "Rye continues to be on fire as the fastest-growing segment in whiskey, fueled by the strong growth of Bulleit Rye, the No. 1 selling Rye, as well George Dickel Rye," says Yvonne Briese, vice president of brand marketing for Crown Royal. "Bartenders across the country continue to embrace it as the perfect spicy backbone for popular, classic cocktails."

Mj 390_294_pappy van winkle scarcity

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You could argue that it's psychology. Whether it's intentional or not, rye's limited supply is feeding a public opinion that it's scarce because it's valuable — the same way Pappy Van Winkle gets so much damn attention. That, coupled with awards for bottles like Northern Harvest Rye, gives consumers a little rush whenever they see something on a shelf.

You also could argue the cultural effect of the bartending community artificially selecting rye for cocktails because of its bigger, bolder taste compared to other American whiskies.

What you can't argue are the numbers. New rye whiskeys came from nearly every major distillery in 2015, and while some were limited editions, many ended the year finally reaching major markets. It's an imperfect metric and "there's no way of getting an exact count" according to a source at the Distilled Spirits Council of the United States, but they suspect there are between 34 and 45 new brands, when considering brands with limited distribution.  

But that limited-release argument doesn't stop fans from clamoring for drams of Pappy: It encourages it. And we expect the same to happen this year, as more people have more opportunities to taste a variety of rye whiskeys. And you should be doing that. Because you'll have a lot to catch up on if you wait much longer. Rye whiskeys released last year are getting the cask-strength treatment this year. At the high end, Redemption is releasing a 17-year-old expression, and Jack Daniel's is expected to release a single-cask rye.

Mj 390_294_the end of aged whisky

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Those volumes sold and those new products announced are only going to get larger as supply increases. To put it in perspective, a rye whiskey distilled in 2009 is seven years old this year. Pikesville, which won double gold in San Francisco in 2015 (a noteworthy accolade for whiskey), is aged 6 years.

The stuff you drink this year will be better than years past because it's been in the making since rye started getting attention again, not cobbled together as a modest effort to answer requests. And it's only going to get better from here.

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