Does the Price of a Bourbon Indicate its Quality?

The bourbon market is now worth an estimated $5 billion a year in the United States alone, with half of that coming from New York. The best-selling brand is Maker’s Mark, which sells for $30 a bottle and is widely considered to be one of the world’s best bourbons.

A lot of people reckon that because they have such high prices they taste better than low-priced whiskeys. But that doesn’t make sense at all; it just proves people aren’t willing to pay more for the same quality.

Another argument against the premium price for great bourbons is that it signals their quality isn’t quite as good as you would think from their name and the brand itself. These brands are seen by some as throwaways or cheap imitations or something similar, so it makes sense if we see a premium price for them too – but we can also see why it may not be all that important if you already have great brand-name whiskeys in your home bar anyway!

And there’s something else to consider too: how much do you really care about your whisky? If you don’t like it, then you don’t really want it anyway!

Is Price Indicative of Quality?

Are you paying $100 for a bottle of bourbon? If so, you may be getting a good deal — or at least a good value. But how much do you really need to spend? That’s the question that leads us to question the value of price.

A little background: bourbon is an important part of American culture. And bourbon is not cheap, especially when compared to other distilled spirits (like vodka). A standard bottle of bourbon costs about $100, and the most popular brands cost about $40-$50. But it’s worth noting that the cost reflects just one part of what goes into making a single bottle.

Market Forces and the Psychology of Price

In his post on the market forces and the psychology of price, Jonathan Haidt uses an example of bourbon to illustrate why price is not a reliable indicator of quality or taste.

Haidt takes a good shot at the common assumption that price is a reliable indicator of quality:

“In the 1950s, Mark Twain wrote that ‘if you want to know what a man’s like don’t ask him for his money. Ask him for his whiskey. That will tell you more about him than asking him for his money ever could.’”

The idea is that as an individual we are very much influenced by our own values and beliefs, along with our culture and circumstances, even if we are relatively ignorant of it (the latter being the case in this case). If we can put ourselves in someone else’s shoes, then we might be able to uncover some information about them (cue Moneyball). But as soon as we become aware that someone has valuable insight into us (e.g., through genie technology), they would naturally assume they have some ability to influence our actions. What this means is that there is always going to be a high value placed on information; and thus, when it comes to buying something, we only care how much it costs. The only difference between this transaction and others is how much attention you pay to it; and thus, if your product does well (which isn’t all too difficult), eventually you will get caught up in your success and see less importance placed on its price.

The Bourbons: A Veritable Smorgasbord of Taste and Quality

Brettschneider, a renowned bourbon expert, once wrote in the New York Times:

“The $35 price for a bottle of bourbon is nothing. That is the price for a bottle of fine quality bourbon — and there are many. It depends what you are buying. “You know how to set your budget, however; don’t be fooled by the promise of cheap or free bourbons. You can buy them for less than $35 and still get fine quality corn-based whiskeys. You can pay more than $350 for a bottle and still get good stuff — though even then, the quality is not great”

Which brings us to our main question: does a high price indicate that a Bourbon has good taste or even any taste at all? Is there any way to tell? Well, yes and no. A high price may be indicative of quality (however that may be measured), but it may also be an indicator that the current brand only exists because its owner has sold out, has become too big to fail, or simply wants to keep the money in his pocket (I’m looking at you, Diageo!!). The important thing to understand here is that we need money to make a product; if we have none we cannot make it!

Let’s first look at how most Bourbons are priced (not including premium or super premium bourbons):

Bourbon Sour Mash ($35) – This Bourbon is produced by blending several whiskeys together with either rye or wheat grain (to name just two options). The blended whiskey then undergoes sipping distillation in special large copper pot stills before being filtered through charcoal-impregnated cotton cloth into an earthenware container known as “Sour Mash Pot” from which it emerges as a relatively inexpensive yet highly rated Bourbon Whiskey with very few additives (and you could argue against this argument if you so desire). This type of Bourbon whiskey goes well with seafood, beef and pork dishes and milder wines/brands such as Riesling and Sauternes.

Bourbon Select ($40) – This Bourbon comes out of exactly the same Sour Mash Pot as above but was recently aged in oak barrels which add complexity and complexity often associated with high prices. The final product will have matured naturally in the barrel without any added additives hence retaining its age-worthy qualities but having more characteristics closer to younger products such as blended Whiskeys… at least for now (who knows? it may change in the future).

Bourbon Extra ($50) – This Bourbon, again, comes out of the same Sour Mash Pot as the previous Bourbon but is aged in barrels which were previously used for other products such as Cognac, Canadian Whisky, Italian Brandy and so on. One would expect more age from a Bourbon which has been aged in older oak barrels while retaining most of its magic (it’ll be an acquired taste but they smell nice too), so this Bourbon is somewhat expensive but as it matures it will cost more.

Conclusion

Nowadays, bourbon is a very popular drink, and for good reason. Many naysayers argue that bourbon is just like any other beer or wine, and that it really doesn’t matter what you pay for it. I disagree.

The price of a bourbon is important because it establishes the amount of money you, the consumer, are willing to spend to get a spirit that tastes just like a good Scotch or Irish whiskey. A $400 bottle of bourbon may taste wonderful to you; however, if you were trying to convince your friends that they should buy one too, the price might not be high enough. On the other hand, if you were trying to convince your sister that she should buy one too (let’s say she was over $300), then $400 might not be enough either.

The price of a Bourbon will differ from state to state, especially in Kentucky! Kentucky is considered the birthplace of Bourbon, and at times we might not even realize it. It is customary for a person who comes from Kentucky to buy Bourbon out of state or off the Internet, so it’s important to know how much money one is willing to spend.