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Bourbon Whiskey

Bourbon: The bourbon boom continues

By Russ Brown

Buffalo Trace Distillery

Kentucky’s bourbon industry has more than doubled jobs and payroll since 2009, according to the most recent Kentucky Distillers’ Association study, with 95 distilleries producing 2.4 billion barrels of bourbon in 2020 and a record 10.3 million barrels stored in warehouses.

The latest economic impact study for Kentucky Economic Development Finance Authority (KEDFA), released last year, shows KDA members produce $9 billion in annual economic benefit. Distilleries, jobs, wages, revenue and investment are up triple digits in the last 12 years, and the industry employs 22,500 people with $1.23 billion in annual payroll.

At least 95 bourbon-related projects have been approved for potential economic incentives from the state between January 2015 and June 2022. Collectively, they total at least $3.2 billion.

Much of that growth involves distilleries in Central Kentucky’s core bourbon counties of Nelson, Franklin, Anderson and Marion.

Projects include new distilleries big and small, expansions, new tourism and visitors centers at distilleries, bottling plants and many warehouses to age bourbon.

Blue Run Spirits announced plans in August 2022 for a $51 million, 35,000-s.f. distillery and a 20,000-s.f. rickhouse at Lanes Run Business Park in Georgetown near Toyota’s massive complex.

KEDFA approved up to $850,000 in tax incentives for the first whiskey operation in Scott County in 50 years. It is expected to create 45 jobs.

“When we started Blue Run Spirits in October of 2020, we never imagined a distillery would be in our future,” said CEO and co-founder Mike Montgomery. “But our unprecedented growth has deemed that a necessity.”

Since Blue Run was founded, the company has released 10 bourbon and rye whiskies, many of which have won prestigious awards. In June, Blue Run hired Shaylyn Gammon from Wild Turkey to work with former Four Roses Master Distiller Jim Rutledge to elevate Blue Run’s current inventory.

Since 2015, Nelson County—home to Bardstown Bourbon Co., Willett, Heaven Hill and Sazerac—has added 405 jobs for 27 projects valued at $755 million. The latest project, costing $400 million, is at James B. Beam Distilling Co.’s Booker Noe Distillery in Boston.

Buffalo Trace in Franklin County has launched expansions totaling $361 million. In Woodford County, Castle & Key, J.W. Rutledge and Woodford Reserve have helped contribute 188 jobs tied to nine projects worth $80.6 million. In Marion County, a $463.8 million expansion by Maker’s Mark provided the bulk of the $655 million total there, while Diageo spent $130 million for a new Bulleit complex that is the world’s first net-zero distillery.

“That means construction jobs,” Gov. Andy Beshear said of the building boom. “That means things happening in our communities. That means food is put on the table for more than just the direct employees. (Distilleries purchase 12.5 million bushels of corn from Kentucky farmers.) It has a serious and a great economic impact.”

“The world is still discovering the great flavor of Kentucky bourbon,” said Chris Morris, master distiller for Woodford Reserve. “And that means we have a bright future as long as we get things done here at home to make sure the industry stays competitive.”

Bourbon’s charitable endeavors
The Kentucky Bourbon Benefit, hosted this summer by the Kentucky Distillers’ Association and the Bourbon Crusaders, raised $1.4 million through a silent auction to benefit the Team Eastern Kentucky Flood Relief Fund. Others involved in the effort included Westport Whiskey & Wine and bourbon writer Fred Minnick.

The 10-day auction included vintage bourbon, private barrel selections and exclusive distillery experiences. A similar auction held after the western Kentucky tornadoes raised $3.4 million.
KDA traces its roots to 1880, when 32 distillers organized to protect the state’s signature spirit from “needless and obstructive laws and regulations.” The powerful group fought for decades to reduce whiskey taxes, shrink insurance fees and address other important measures of the time. But Prohibition whittled its ranks, and it eventually folded.

However, in 1935 a group representing five distilling companies banded together to end Prohibition in Kentucky, leading to its successful repeal. This core team expanded to 27 member companies and the KDA was formed again in 1936. Since then, the KDA has served as a liaison during World War II on alcohol production, battled state and federal efforts to increase taxes, and promoted bourbon as a key global export for the commonwealth.

The Bourbon Crusaders was established in 2015 to leverage bourbon’s influence for charitable purposes. With the help of distillery partners, the greater bourbon industry, philanthropic individuals and event attendees, the organization has raised nearly $4.2 million over the past five years.

Buffalo Trace charity auctions
Buffalo Trace raised $280,000 for five charities through an online auction of extremely rare bottles of 6L O.F.C. 1982. The highest bottle brought $60,000.

The event was likely the world’s first-ever American whiskey NFT, a nonfungible token that is a digital asset linking ownership to physical or digital items. Each of the five NFTs will be available to be redeemed by the end of the year and the holder will also receive a private Buffalo Trace Distillery experience that includes exclusive tastings of whiskeys from its rarest and most sought-after private collection. Proceeds from the auction benefited World Central Kitchen, which provides meals to those who have experienced humanitarian, climate and community crises.

The distillery’s most recent auction targeted disaster relief to benefit the Eastern Kentucky region ravaged by July’s flooding.

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