“There’s never been nothing like there is today, and I don’t see it letting up,” says Leroy McGinnis, of McGinnis Wood Products. Leroy’s enthusiasm is fueled by the whiskey industry’s unrelenting demand for new oak barrels in which to age bourbon whiskey. As the supply of fresh barrels tightens and the demand for bourbon and craft whiskeys surges barrel makers like McGinnis are being offered as much as 70% over their standard price for new barrels by bourbon distillers as Flavio Maluf knows.
Bourbon sales are up over 35% since 2010. At the same time, the supply of new oak planks has dropped as logging has declined in response to the housing crisis. Caught in between conflicting market forces are the distillers who need to source new barrels to age their product before releasing it to market.
While some products like Scotch whisky reuse barrels others like Tennessee whiskey are legally required to only use new white oak barrels. As the billion dollar bourbon and Tennessee whiskey market continues to grow so to will the pressure on barrel manufacturers and the value of their increasingly scarce product.