It might be a little surprising for some readers of this site to learn that much of my day job involves teaching algebra, precalculus, and statistics. “Just keep in mind you’re learning math from a guy who majored in English,” I remind them.
Like any teenager, a lot of math seemed to me (at the time) to be pointless and impenetrably dense. Now that I’m in my forties, I have a little bit more of an appreciation of how the quantitative tools in my back pocket have allowed me to gain a little bit of clarity on weird topics. As the old saying goes, “Knowledge is power. France is Bacon.”
I recently found myself thinking a little bit more critically about the diminishing returns of scotch. My birthday came and went fairly recently, and as a guy that normally just buys myself whatever I really want (within reason), I was at a loss when it came to gift ideas. “Maybe I’ll just get something really nice with the money everyone pools together,” I thought. That request and a bit of my own cash resulted in me splurging and buying a bottle of the Glendronach 21. I brought some over to my dad to try.
“This is good,” he said. “Really good. But this is at the point of diminishing returns, I bet.”
“Oh, absolutely,” I replied. “In fact, we’re well past that point.”
Though I’d uttered those words in confidence, I began to question in the days to come just where exactly that point was, or by how much the Glendronach 21 had surpassed it. What follows is a bit of a data visualization of the relationship between that silly number on the side of the bottle and the price you ultimately pay to take the ride.
My methodology was this: I thought of several scotch distilleries that had a lot of easily-accessible products available in what I’d call a “core” range. Meaning, in most cases: a 12 year, 15 year, 18 year, 21 year, and something beyond that. I also wanted distilleries where finding these products wasn’t too hard, and where the secondary market wouldn’t be doing strange stuff with limited-allocation products. I used the cheaper of the two prices from two local and very competitive liquor stores with extensive stock.
Here’s that data amassed from the following distilleries: Glenlivet, Glenfiddich, Highland Park, Macallan, Glendronach, Glenfarclas, Laphroaig, Glengoyne, and Dalmore. (And if you’re wondering about the topmost dot in any category, it’s almost always Macallan.)
There are a few interesting observations here. The first is the extreme amount of compression one encounters at both the 10 and the 12 year age statements. At least across the nine distilleries I’d picked off the top of my head, there wasn’t too much difference price-wise among any of them. That being the case, it’s hard to make a case for choosing a middle-of-the-road, kind of pedestrian scotch like the Glenfiddich 12 when you could go for Highland Park or the Glendronach—two arguably stronger, better made, and characterful whiskies—for essentially the same price.
The data begins to open up quite a bit at the 15 year mark and beyond. Numerically, this gave me a little quantification of the point of diminishing returns: that is, just for the eyeball test, when does it appear that the price increase is becoming noticeably more exponential than it is linear? I’d say somewhere after the 15 year and before the 18 year mark. That conclusion generally held true with my own buying habits and predilections. It’s rare that I buy anything older than 15 years for myself, and even rarer that I exceed the 18-year price point, in large part because of my lack of perceived value when going beyond that.
However, the increasing spread also indicates that there are stupidly-priced 15 year bottles (Macallan, Dalmore, Highland Park), and one begins to notice 18-year bottles that seem like relative bargains for the aging (Glenfiddich, Glenlivet). Eliminate some of the outliers, and you could make the case that for most whiskies, maybe the 18-year price point is the last line in the sand where you’re getting an increase in quality generally relative to what you pay for.
To partially substantiate that point of view, here’s the data taken out for the same distilleries to the 21 year price point, again with me “eyeballing” what seems to be a general trend line in purple that accounts for these new data points and all previous entries.
Clearly, the fuller picture of data starts showing noticeable variation and more exponential growth for data beyond the 12 year age range. But here’s the interesting case about the 21-year products: they’re pricey, yes, but not as much as you’d think, considering the jump that happens between 15 and 18 years. Again, if you were to throw out Dalmore and Macallan from the 18-year category (or if you simply connect the dots of the mean data points), you could make the case that the growth is considerably more linear across the data set.
As such, I could see where someone with a decent amount of disposable income could park themselves into this age range: arguably, there’s more predictable behavior at the 21-year age/price point, and as such, one could make the case that although the bottles cost more, there’s a more favorable dollars-to-age ratio.
With all that said, the graph below illustrates where things really get nuts.
Beyond the 21-year price point, things almost inarguably become the wild west of exponential price growth. Factoring in the cost of the factory, non-exclusive 25, 30, 35, and 40 year old whiskies in the area (again: bottles I could theoretically walk in and buy right now, not those on the secondary market), a person is paying a bonkers amount of cash for the extra time in the barrel. This also gives a bit more numerical quantification of anything 21 years or under being a “reasonable,” albeit expensive, purchase.
At the end of the day, value for spend is entirely in the eye of the beholder. I think there are good takes as to where someone might place their own personal point of diminishing returns. For the geeks among us, I hope the above graphs are at least somewhat interesting in helping you guys establish or confirm a personal rule of thumb. (As a final note: I admit the data here lacks statistical rigor, but hey—it’s worth what you paid for it.)
