Kentucky is globally acknowledged for superior proficiency in handcrafting Bourbon, and a new report issued by the Kentucky Distillers Association shows that expertise is growing broader and deeper during the current renaissance of America’s only native spirit. At every level, each step in the process, Kentuckians are building on and strengthening the limestone foundation that created a trademark industry.
Kentuckians have been making whiskey for over two centuries, from the days of farm stills to 19th century industrialization, through economic downturns and Prohibition, up to today’s ongoing boom. Over the last two decades, every important economic measure of the distilling industry has risen to unprecedented levels – facilities, production volume, inventory, employment, payroll, investment, visitation and taxes generated. A deepening thirst among the world’s aficionados has spawned Bourbon distilling operations in all regions of the state, in contrast to the geographic centralization of the 20th century which concentrated in the area between Louisville, Bardstown and Lexington and coined the “Amber Triangle.” This century also brought the emergence of “Urban Bourbon,” with distilleries and tasting rooms in downtowns, as well as Bourbon-themed hotels, B&Bs, Air B&Bs and short-term housing rentals.
KDA members reported capital spending of $1.9 billion over the last five years, almost equally split between construction and other items, such as machinery, equipment and furnishings. Moreover, they plan to spend $3.5 billion over the next five years for a total of $5.4 billion in capital investment over the 10-year period. Every KDA member, whether a large Heritage producer or a small Craft distiller, reported significant investments. This reflects a steady continuation of billions in investment spending we have documented over our previous studies.
Corn production in the core distilling counties has increased 300% since a first economic analysis of the modern industry impact was conducted in 2009. Distillers purchased 21 million bushels of Kentucky-grown corn, wheat and rye in 2023. Growth was especially apparent in Nelson, Shelby, Washington, Mercer and Marion counties – where large, heritage distillers are located. Nelson County is, of course, home to many heritage distilleries. Marion County is home to Maker’s Mark distillery, and has seen a tripling of corn production over the past 20 years.
Not counting farm receipts and operations, distilling generated more than 23,100 jobs with annual salaries and wages of $1.63 billion — $2.2 billion including benefits.
Bourbon related operations permeate into and further grow a way of life in Kentucky that reaches out from each of the 100 distilleries in 42 counties that provided data for the economic study, which was released February 6. As they continue chasing the goal of matching supply to demand, distillers produced a record 2.7 million barrels of Bourbon in 2022. When study data was gathered, there were 12.6 million barrels aging in the Commonwealth, with each barrel tending to remain in the warehouse longer today so Kentucky’s variable seasonal climate can create more complex interaction between the barrels’ charred inner finishes and the special grain bills that are refined into the initial liquids.
Due to the rapid rise in Craft distilleries in all 50 states, Kentucky’s share of the national industry has been slipping. Kentucky’s share of distilling establishments fell from 24% to 6% over the 2001-2022 period, while its share of employment fell from 43% to 27%. However, Kentucky’s share of distilling payroll decreased only from 40% to 37% of the U.S. total. Kentucky’s higher share of payroll is due largely to the presence of high-paying professional jobs at headquarters here. In 2022, the average pay per job in Kentucky distilling was $94,000, compared to the national average of $69,000. So, while the industry has grown in terms of geographic locations around the U.S., Kentucky remains the largest player in terms of overall production, employment and payroll.
Others are undoubtedly learning to make good Bourbon, but they are aiming for a North Star that shines over Kentucky.
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