Sazerac in talks with Brown Forman?

Alcohol; in general, is in a bad way. Americans are drinking less, Gen Z doesn’t drink and THC has entered the equation.

The boom in bourbon faded faster than expected and they’ve collectively overproduced on a positively massive scale. Some estimates suggest that every bourbon distillery could shut down tomorrow and it would take nearly a decade to go through what’s already in barrels at current consumption rates.

Sales are down and the distilleries know bankruptcies are coming. They’ll be able to buy barrels of aged juice for pennies on the dollar at liquidation. Now we’re at that point where closures (Kentucky Owl/Stoli and more) and consolidation/sales are happening. Four Roses to Gallo Wines being the most notable sale recently.

Brown Foreman has been in discussions with Pernod. Saz has entered the discussion. Saz wins either way. If they get BF at a good price they have virtually locked up bourbon in the US. In years past there would be anti-trust discussions. If their presence drives up the price for Pernod it’s still a victory of sorts for Saz.

I really hate the consolidation we're seeing in the industry. Buffalo Trace is already not consumer friendly, and more mergers isn't going to help.

Wine will be fine as long as you have middle class moms.

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I'm really interested in watching this play out over the next 20 years as boomers truly die off. This goes for all alcohol businesses from beer to wine to bourbon.

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It’s going to be wild. I’ve been in the alcohol industry for the past decade and exited last year. I still have many industry connections and keep up to the extent possible.

I think it’s important to remember that while what’s happening in the US is huge; it’s not necessarily a leading indicator of what’s going to happen elsewhere.

During my time I had the occasion to pour at events in South America, Europe, Asia and even Africa. Alcohol is woven deeply into the societal fabric in some countries. Alcohol consumption in places like the Czech Republic or the Baltics and former Soviet Bloc isn’t going anywhere. Mexicans aren’t giving up cerveza any time soon. The Spaniards will always have a relationship with red table wines.

Marijuana/THC while certainly gaining acceptance is still highly illegal in much of the world. So this substitution effect we’re seeing here isn’t necessarily a viable alternative elsewhere just yet.

I do agree with many others that the next decade or so is going to fundamentally reshape the alcohol business in the US. It’s why I got out. Although I also believe things are cyclical and what was once old always becomes new again as a future generation adopts it and puts their own spin on it.