Above: A YouTube message from Scott Bush and Keith Kerkhoff, addressing Batch 4 availability and some common misconceptions.
Greetings from Templeton. We wanted to share our 2011 allocation update with you as well as various other facts in light of some rumors flying around Iowa. We have always tried to openly communicate with our partners and customers and want to make sure you have good information.
As many of you know, our product is aged in new charred oak barrels for more than four years, so we are only able to sell today what we had distilled in 2006/2007. We refused to rush our product or sacrifice quality, which has led to a long game of hurry-up-and-wait. We started to expand production at the end of 2006 and that product began to come online in December 2010. However, demand for Templeton Rye has expanded right with this increased supply. We sent 5,000 cases to the State of Iowa in December and were as shocked as anyone that they were all sold in a week. We honestly thought that 5,000 cases would go a long ways toward filling the Iowa pipeline. Unfortunately, that was not the case.
2011 Supply and Allocation
Below is our December 2010 – December 2011 preliminary allocation. We will be sending these cases to each market (Iowa, Chicago, New York City and San Francisco) at the beginning of each month. As you can see, we sent nearly 80% of our December allotment to Iowa and will continue to do our best to supply our home state while balancing the future growth for our company. In fact, the Iowa allocation below is 33% higher than the allocation we shared with the state back in June. Most people in the industry think we are crazy to allocate this much product to Iowa, but it is important to us as Iowa people and as an Iowa company. Please support us on this fact if you hear folks saying we are “sending all our product out of state.”
Iowa Allocation and Procedure
Iowa is what is known in the industry as a “Control State,” meaning the State of Iowa acts as the distributor for spirits state-wide. We sell every bottle of Templeton Rye in Iowa to the Iowa Alcoholic Beverages Division (also known as the ABD). The ABD applies a “mark-up” or tax, and sells the product to licensees (spirits retailers). Please note that despite serious pressure, we have not changed our price to the ABD. The ABD applies a set mark-up and retailers have the liberty to set the final price charged to consumers.
The ABD allocates the cases we send them every month to “uniformly distribute” them amongst licensees. They decide how many cases each licensee can order every month and they begin to fill orders on a certain day. Iowa licensees order on either Monday, Tuesday, Wednesday or Thursday with delivery the following day. Depending on what day of the week a licensee orders, and the amount of product sent in that month, they may or may not get any product that particular month.
Each party mentioned above is in a tough spot because of the supply/demand situation. We realize that and truly appreciate their efforts. What we want to make clear is that once we sell product to the ABD we do not control where it ends up or the price on the shelf. We have a lot more influence on those items in other states, and quite frankly, if Iowa were not our home state we would probably allocate much less product here.
Selling at the Distillery
We have legally been able to sell product at the distillery since July 2010. We chose not to sell at the distillery because we did not think it was the right thing to do with our retail partners in such short supply. We thought the Dec 2010 allocation would go a long way towards filling the Iowa pipeline and we had planned to start selling at the distillery on January 1st. Because the December ’10 allocation went so quickly, we have put those plans on hold. We honestly do not know if (or when) we will start to sell Templeton Rye at the distillery. Please watch our newsletter for any updates on this subject.
Where to Find a Bottle?
Once we sell a bottle to the ABD we do not have any information as to where it will end up, so we can’t really help find a retailer that has product in stock. Retailers can only sell what they get allocated from the state, which is limited by the amount of product we send to the ABD – so we ask that you please do not get frustrated with retailers. They are doing the best they can in a tough situation and would obviously be happy to sell you a bottle if they could.
One option is to search various stores the first week or two of each month and hopefully find a bottle in stock. We have also noticed a lot of our fans helping others find bottles on our Facebook page and through the Twitter hashtag #TRspottings, so be sure to watch those channels as well.
From January 2010 through November 2010 we sold 3,100 cases in Iowa. From Dec 2010 through December 2011 we are set to sell 20,000 cases in Iowa. Our aging stock for 2012, 2013 and 2014 is obviously already in the barrels and each year is a significant increase over the previous year.
As mentioned earlier, once we sell product to the ABD we do not control where it ends up or the price on the shelf.
We sincerely understand that the current Templeton Rye supply/demand situation is causing some headaches for folks trying to buy and sell our product. We apologize for this and can only say that we share your frustration and wish we could grow the company overnight – but that is simply not the case. We appreciate the work that our loyal retail partners have done in the past and continue to do on a daily basis. We also appreciate the support and enthusiasm of Templeton Rye fans in Iowa and around the world.
Happy New Year and all the best to you and yours!