Why Buffalo Trace Is Beating Bourbon’s Downturn
After what has seemed like an endless string of smashing successes, the bourbon industry is facing its first real roadblocks in decades, and reports of turmoil and decline have been growing more frequent and agitated over the past year.
IWSR Drinks Market Analysis showed a 2 percent downturn in domestic bourbon sales volume from 2023 to 2024, while globally, sales volume was flat from 2023 to 2024. Meanwhile, overall spirits sale volumes experienced their first decline in three decades in 2023, indicating that while bourbon may have its own particular challenges, there are also larger factors at play, from socioeconomic conditions to evolving, generational consumer preferences.
In the bourbon realm, heavy hitters such as Brown-Forman, Diageo, and MGP have all been impacted. Category-wide, those record-breaking 14.3 million barrels of Kentucky bourbon stocked away are beginning to appear less like an infinite asset and more like a frightening harbinger of vast category oversupply. There have been dozens of craft distillery closures across the country, while the ongoing saga of Uncle Nearest has garnered mainstream news media attention.
Looking ahead, IWSR forecasts a stagnant bourbon market domestically, with a projected 0 percent CAGR volume change for the category through 2029. Global sales are projected to have a slight uptick, with a 1 percent CAGR volume growth through 2029. Any long-term retaliatory tariffs or market shifts in areas such as Canada, the EU, and the U.K. would surely stifle sales further.
Yet, a few brands are forging ahead unimpeded by the chaos, Buffalo Trace chief among them. Not the distillery and its overarching portfolio, including coveted releases such as the Van Winkle and Antique Collection lineups, but the flagship label Buffalo Trace Bourbon itself. Shanken News Daily reported the brand as the fastest-growing of any super-premium bourbon in control states last year, while this year, it reports that Buffalo Trace volume growth has been up by double digits.
“Buffalo Trace continues to outperform the category thanks to a combination of consistent product quality, strong consumer demand and strategic distribution expansion,” says Michele Giammittorio, senior director of spirits category management at Total Wine & More.
How Buffalo Trace Is Defying the Odds
Supply and demand. Simple, powerful, and as memorable of an educational doctrine as mitochondria being the powerhouse of the cell, if perhaps a bit more applicable to real-world dealings. Due in part to foresight and good timing, along with long-running, surging demand, Buffalo Trace was able to increase its supply and improve upon its availability, leaving it in a position to capitalize on years of bourbon-consumer yearning.
“Buffalo Trace is probably the most well positioned of the distilleries to capitalize on the downturn in terms of the pent-up demand for their products as drinkers and not collectors,” says Bill Thomas, proprietor of D.C.’s Jack Rose Dining Saloon. “And now the market is moving into Buffalo Trace, not away from them.”
Over the past decade, Buffalo Trace Distillery undertook a $1.2 billion expansion project, culminating with a new stillhouse coming online in 2023. This followed additions such as a dozen new fermenters and 14 new barrel warehouses. While whiskey from the new stillhouse wouldn’t yet be found in the Buffalo Trace that’s on the shelf today, eliminating the bottlenecks in mashing and fermenting enabled more capacity to come online sooner.
“It’s all about availability after years of constricted and allocated supply, inventory has increased and it’s now more readily available both on- and off-premise,” says Brad Williams, the senior category manager of spirits at Liquor Barn. “Today, you can get Buffalo Trace at dinner or a bar, or buy a bottle at your local store. That hasn’t been the case for years.”
“Even now, as the distillery continues to expand its production capacity and those efforts are resulting in increased availability, the specter of scarcity still looms and leads people to buy as many as they can when the opportunity arises.”
Evoking more economic fundamentals, Buffalo Trace falls in with a rarefied positioning in the quality-to- price matrix. “It’s quality to price point,” Thomas says. “All of the core drinkers of bourbon who stopped drinking it, because the prices were inflated in a lot of markets, now the prices have dropped in terms of retail, so you see it and you just pick it up and drink it.”
Greater availability alongside a broader category that’s reached a plateau of sorts has encouraged retailers to nudge prices down, and a $5 or $10 price decrease is substantial for a bottle that falls from $39 to $34 or even $29. “That’s a huge percentage of inflated value, and it’s all about percentages and perception,” Thomas says.
Retailers may take a per bottle profit hit as a result of dropping prices, as do secondary sellers no longer able to pawn off their wares on the unlucky souls who couldn’t just go to the store and nab one for themselves. Neither of which should, or does, concern Buffalo Trace’s parent company Sazerac. “They weren’t seeing the upside of the secondary, so what do they care? They care about selling bottles,” Thomas says.
Pent-up demand encourages consumers to snag a bottle when they see one, but many are still scarred from the brand’s prior absence. Guess what? That encourages them to scoop up another bottle for good measure.
“It’s interesting because its popularity drives its scarcity as much as its scarcity drives its popularity,” says Frank “Bourb Your Enthusiasm” Dobbins III, a spirits editor and whiskey content creator. “Even now, as the distillery continues to expand its production capacity and those efforts are resulting in increased availability, the specter of scarcity still looms and leads people to buy as many as they can when the opportunity arises.”
“Consider the prevalence of soft connoisseurship in the space — being aware of their brands signals a passing degree of good taste, supported by their scarcity and popularity in pop culture.”
A great deal of that demand originated in a follow-the-breadcrumbs approach to bourbon shopping. Can’t find BTAC or Pappy? Crushed out your state’s supply of Blanton’s and Weller? Move down the line.
“That Buffalo Trace exists under the halo of coveted, high-end expressions is just gasoline on the fire; it’s in our nature to seek derivatives of what we really want,” Dobbins says. “I think Buffalo Trace does a better job than any other brand of satisfying that desire without muddying the prestige of its most prized offerings.”
Those prestige bottlings are not only well known, but they’re well defined, and they come with a consistent schedule of releases. It makes it easy for the casual bourbon-drinking public at large to know what else to search for when they strike out.
“It’s clear-cut for Buffalo Trace: Each member of the BTAC lineup, specifically, has its own derivative further down the food chain, which fuels the popularity of those products,” Dobbins says. “William Larue Weller draws from the well of Pappy Van Winkle’s desirability, and both have contributed to the popularity of the ballooning Weller lineup.”
At the base of the pyramid is Buffalo Trace Bourbon, and it’s a rock-solid foundation capable of hoisting an enormous amount of cultural cachet. “Consider the prevalence of soft connoisseurship in the space — being aware of their brands signals a passing degree of good taste, supported by their scarcity and popularity in pop culture,” Dobbins says.
“The key thing here is that, as long as people keep coming in … and telling me they’ve only been into whiskey for a year or two years, bourbon still has a lot of untapped potential.”
While there have long been murmurs that, in order to get appropriate Pappy or BTAC allocations, truckloads of Fireball and Wheatley Vodka sure better be moving off the shelf first, when it comes to standard Buffalo Trace, no assistance is needed. “You don’t really have to push Buffalo Trace,” Williams says. “It’s truly an old beverage retail concept — ‘stack it high and let it fly.’”
It’s all put Buffalo Trace back where it always wanted to be: as a grab-it-and-have-it everyday drinker. “In essence, Buffalo Trace is the perfect house bourbon for many bourbon lovers,” Williams says.
“And that’s what they’d rather,” Thomas adds. “They’d rather be back at a daily drinker. That keeps volume flowing.”
A Reminder From Mark Twain
While there’s no denying that the bourbon industry is amid a challenging period compared to its recent, lofty standards, it’s important to take a step back and consider that maybe the sky isn’t falling, either. “Like Mark Twain once said, ‘the reports of my death are greatly exaggerated,’” Williams says.
“The key thing here is that, as long as people keep coming into Jack Rose and telling me they’ve only been into whiskey for a year or two years, bourbon still has a lot of untapped potential,” Thomas says. “And I’m still seeing it.”
Some distilleries may struggle or fall to the wayside, and even some large producers may take a hit. But that doesn’t mean bourbon as a whole is about to be as imperiled as it was half a century ago. “Some of the brands that are gone never really had a foothold to begin with,” Williams says.
Thomas refers to it as perhaps a necessary culling of the herd. “It was overdue,” he says. “I think that would have come naturally. A lot of them just never caught on and people were like, why are we bothering with these?”
The brands coming out on top are the ones best positioned to do so. In the case of Buffalo Trace, classic supply-demand economics along with its unique place in the modern bourbonsphere make it a natural candidate to do just what it’s doing right now. “You can’t compete against that,” Thomas says.
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