Bourbon Boom: Kentucky's Signature Product is on a Roll
In the time it takes to age a Kentucky straight Bourbon – that’s two years – the Kentucky Bourbon industry has nearly doubled its workforce, tripled its number of distilleries, and set new modern records for exports and barrel inventories.
These are among the findings of a new economic impact study of the distilling industry announced today by Gov. Steve Beshear and the Kentucky Distillers’ Association. The study shows that the state’s Bourbon business is not only booming, it’s making a major mark on the state’s economy.
More than 5 million barrels of Bourbon and other whiskeys are currently aging in Kentucky – the highest inventory in nearly 40 years. That means there are about one million more barrels in Kentucky than people.
“We all knew the Bourbon renaissance was taking this iconic industry to new levels, but this data is absolutely phenomenal,” Gov. Beshear said. “The amount of progress is unrivaled and unparalleled. The Bourbon boom is real and producing results for all Kentuckians.”
The study, performed by the University of Louisville’s Urban Studies Institute, was funded by the Kentucky Agricultural Development Board and the Kentucky Distillers’ Association to highlight the state and local impact that the distilling community has on Kentucky, particularly the agricultural economy.
Gov. Beshear said it’s vital for all partners to continue to help the homegrown Bourbon industry, entice the next generation of distillers, and strengthen Kentucky’s rightful place as the one, true and authentic home for Bourbon.
“The numbers are impressive, especially when you look at planned investment and jobs created over the next five years as the barrel tax is phased out,” said Senate President Robert Stivers, of Manchester. “This is a perfect example of government working with business to remove barriers to growth.”
“Bourbon County just opened its first distillery in 95 years, and it’s been astonishing to watch the transformation in our downtown as restaurants and other business capitalize on Bourbon’s momentum,” said House Majority Caucus Chairwoman Sannie Overly, of Paris. “The Kentucky Bourbon Trail and Kentucky Bourbon Trail Craft Tour experiences are changing the face of Kentucky tourism. Bourbon isn’t just a drink anymore. It’s a unique part of our culture and our heritage, and people want to experience that authenticity.”
The 67-page report – the third study since 2010 – is the most comprehensive analysis ever conducted on the economic and fiscal impact of Bourbon and distilled spirits in Kentucky, said Kentucky Distillers’ Association President Eric Gregory.
According to the report:
· Distilling now contributes $3 billion in gross state product to Kentucky’s economy every year, up from $1.8 billion just two years ago, a 67 percent increase.
· More than 15,400 people owe their paychecks to the Bourbon industry, compared to 8,690 in 2012, a 77 percent increase.
· Payroll for those workers has skyrocketed to more than $707 million from $413 million I 2012, a 71 percent increase.
· Average salary for distillery employees is $91,188.
· Distilleries plan to spend $630 million in capital investment over the next five years as the ad valorem “barrel tax” is offset by a corporate tax credit that distillers are required to reinvest in their Kentucky operations. This will create an additional 1,500 jobs, $43 million in payroll and $5 million in tax revenue.
· Total capital investment will surpass $1.3 billion in projects over a 10-year period starting in 2008.
· Kentucky distillers source approximately 40 percent of all of their grain from Kentucky farms.
· The study concluded that there is avenue for increasing Kentucky sourced grain with a potential impact of $89 million in sales to Kentucky farms.
· Organically grown, Non-GMO corn is in high demand among several of the distillers.
· The number of licensed distilling companies has tripled – from 10 to 31 in two years. That’s the most distilleries in Kentucky since the repeal of Prohibition.
· Distilling remains one of the state’s top job creators with a 4.35 spin-off factor, meaning every distillery job helps create four other jobs. Distilling now ranks second in total employment and job multiplier out of 245 industries (only animal processing ranks higher).
· Distilling industry employment is up 21 percent since 2000.
· New craft distilleries employ 127 people with salaries totaling more than $4 million. They have invested $30 million already, and plan to spend another $25 to $30 million in the next five years.
· Total property tax assessments have jumped to $2 billion from $1.3 billion in 2012, a 54 percent increase.
· More than $166 million in tax revenue for local and state governments is generated by spirits production and consumption, up from $126 million in 2012 (a 32 percent increase).
· Bourbon and Tennessee whiskey account for $1 billion of the total $1.5 billion in distilled spirits exports, up from $768 million in 2012. It is, by far, the largest export category among all U.S. distilled spirits.
· Barrel inventories are at their highest levels in 40 years, with more than 5.3 million aging currently in Kentucky. Production levels are up 53 percent in the last two years and 150 percent in the last 15 years.
“With Kentucky distillers sourcing approximately 40 percent of all of their grain from Kentucky farms, the findings of this study are extremely important to Kentucky agriculture,” said Roger Thomas, executive director for the Governor’s Office of Agricultural Policy. “The potential for increases in net farm income and market opportunities presented in this study are a win-win for Kentucky.”
To view the entire report, click here.
From the Office of Kentucky Governor Steve Beshear