U.S. is in a ‘golden age of whiskey’ amid supply chain issues: SVP of Economic & Strategic Analysis

David Ozgo, Senior Vice President of Economic and Strategic Analysis at the Distilled Spirits Council of the United States, joins Yahoo Finance to discuss the shortage of bottles and alcohol heading into this holiday season and trends in the alcohol industry.

Video transcript

JARED BLIKRE: 99 bottles of beer on the wall, you might be lucky to get one in this economy. A glass bottle shortage is now threatening to shortchange shoppers of their favorite bottle of brew. Here to discuss it is David Ozgo, senior vice president of economic and strategic analysis at the Distilled Spirits Council of the United States. David, thanks for joining here. And as I remarked during the break, kind of surprising, but also not surprising. We've seen the chip shortage, we've seen brisket shortages. We've seen a lot of other shortages. But can you break this one down for us?

DAVID OZGO: Well, certainly, Jared. Well first off, thank you so much for having me here today. There is a bottle shortage here in the United States when it comes to getting products, bottles to distillers. Now, it's not really just a bottle shortage that's threatening shoppers this coming Christmas, this holiday season.

We're suffering-- the spirits industry is really like every other industry in the United States in that we're facing issues with regard to getting containers into the US. Roughly 40% of everything you see on your package store shelf is imported. So not only is there a shortage of bottles, but oftentimes, we're faced with shortages of containers, which, in turn, is really leading, to a certain extent, a shortage of product on the shelf this holiday season.

JARED BLIKRE: Well, I think the pandemic has showed that the old supply chain methods and structure is probably obsolete. Things have definitely changed, but I'm wondering, how is your industry tackling these problems here? Because other industries are reorienting some of their supplies here. They're changing their ordering practices. But is that part of the distilled spirits strategy as well?

DAVID OZGO: Certainly. Well, some of our member companies are large international companies that have very, very broad portfolios. While 40% of everything might be imported, that means 60% is domestic product. So if you have a fairly broad portfolio, what they've done is shifted their marketing plans more toward those products that are made domestically. Right now, there's probably more. We're in a golden age of whiskey here in the United States. There's more good bourbon being made in the US than at any time in the past. So, right now, they're shifting their plans more and more toward those products that can be available.

JARED BLIKRE: You know, you said golden age of whiskey, and my ears perk up a little bit. Can you-- I just want to follow up on that, even if it doesn't have to do with the glass bottle shortage here. In your industry, what kind of innovations are being made in whiskey-- bourbon whiskey right now?

DAVID OZGO: I'm not sure. Well, right now, right off, you have over 2,000 craft distillers that are in the marketplace today. And some of them are really innovating with regard to how they're making bourbon or, actually, rye whiskey or, for that matter, even American single malts, effectively something similar to either scotch or Irish whiskey, though it's certainly not scotch or Irish whiskey.

So with all those new players in the marketplace, you're seeing a lot of innovation. You're seeing innovation with regard to what the mash bill is, i.e. The grains that go into the whiskey. Additionally, you're seeing innovation in how they age it, the length of time they age it, or in what kind of barrels they're aging it in. So, as a result, there's really more good whiskey on the marketplace. So, yes, to a certain extent, there is a logistics issue for our industry. But if you're shopping for Christmas, as I said, there's a lot of good whiskey out there. We market over 16,000 products. So it pays to be a little bit creative now. It pays to really experiment a little bit.

JARED BLIKRE: Well, maybe you can-- I want to continue this line here. What other trends have you seen in the industry, aside from whiskey? And what trends may be going in the wrong direction here? What are consumers kind of eshewing?

DAVID OZGO: Well, actually, last year, we had our best day probably in 40 years. Our volumes increased by around 4%. Revenues were up much higher because we saw the consumer really move to those premium and super premium products. So, as a result, really, all categories grew. But we are seeing a lot of strength first, obviously, in bourbon. We see a lot of strength in tequila. We see a lot of strength in cognac. And of course, we also always see a lot of strength in single malt scotch.

So, those are some areas where we're seeing a lot of good growth. But by the same token, there are some very, very good high end rums that are coming onto the market today, and as well as some really premium gins as well. So there are really a lot of options for the consumer. Even though we do face shortages, particularly on some imports, the consumer has a lot of options just because of the variety and the quality that's out in the market today.