Fifteen years ago, bourbon kings poured whiskey on the steps of the Kentucky State Capitol to protest looming tax increases on the spirits industry. On Tuesday, industry leaders reconvened with a bipartisan group of Kentucky leaders to celebrate record growth in the bourbon sector.
Kentucky’s bourbon industry pumps $9 billion into the Bluegrass State’s economy each year, creates more jobs and attracts more tourists than ever before, according to research released Tuesday. Further growth is expected as Kentucky producers make billions of dollars in capital investments.
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Democratic Gov. Andy Beshear praised the bourbon industry for “playing a unique and enormous role in driving our economy and representing Kentucky to the world.” Leading Republican lawmakers pointed to a series of legislative actions they say have helped spur the industry’s growth. According to the Kentucky Distillers Association, Kentucky distillers produce 95% of the world’s bourbon supply.
Bill Samuels Jr. attended Tuesday’s celebration. He also participated in protests several years ago, when he was CEO of Maker’s Mark, pouring bourbon on the steps of the Capitol along with other industry leaders. Samuels said in an interview Tuesday that this was a turning point for Congress and distillers.
“I think this was the end of ignoring industry,” said Samuels, now retired. “And it was the beginning of a really fruitful partnership that has had tremendous benefits for the state.”
The business environment was much different for Kentucky bourbon producers in 2009, when inventories were much lower, totaling about 4.6 million barrels. “Most of us were low on whiskey and pouring it on the stairs just seemed kind of silly,” Samuels said jokingly.
Kentucky Governor Andy Beshear speaks at an event honoring the Bluegrass State’s bourbon industry on February 6, 2024. (AP Photo/Bruce Schreiner)
Kentucky distillers produced a record 2.7 million barrels of bourbon in 2022, according to an economic impact report commissioned by the Distillers Association. This is the fifth consecutive year that production has exceeded 2 million barrels.
The report said producers had a record 12.6 million barrels of bourbon maturing in warehouses in early 2023. These large stocks are a bet on the future, as most bourbons are typically aged between four and eight years before hitting the market. Bourbon develops flavor and golden color during aging.
Kentucky has 100 licensed distilleries, operating in more than one-third of the state’s 120 counties. Distilling creates more than 23,100 jobs in Kentucky and generates more than $1.6 billion in annual wages. Bourbon tourism is booming, with more than 2.5 million visitors last year for his Kentucky Bourbon Trail Craft Tour, which showcases the Kentucky Bourbon Trail and small distilleries.
The distilling industry generated $358 million in state and local taxes last year, according to the study. And distilleries became big buyers of Kentucky’s corn and other grains.
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The icy relationship between distillers and Congress in 2009 has long since thawed. And the industry has produced a series of laws that it claims have helped foster the growth of bourbon production and bourbon-related tourism.
Most notably, a decade ago, the Kentucky General Assembly approved a credit to offset the cost of taxes on barrels in which distilled spirits are aged. Distillers still paid taxes, which primarily benefited public schools, but they got that money back through tax credits. Distillers responded by making huge investments to expand their operations. Other bills passed by lawmakers were in response to Bourbon tourists.
Kentucky House Speaker David Osborne (R) said the industry’s growth is an example of “what happens when government works with stakeholders and risk-takers.”
The event itself demonstrated bourbon’s influence in the Bluegrass State. The event, held in the State Reception Room at the Capitol, was attended by constitutional officials from across the state and members of Congress from both parties.
“We say bourbon brings people together, but when was the last time you guys saw so many Kentucky leaders come together? And to have them come here? We didn’t even need a promise to provide a sample,” quipped Eric Gregory, president of the association. Distilled Spirits Association.
Samuels, who oversaw Maker’s Mark’s growth into a global brand recognizable by its red wax seal, said the outlook for the industry is “a thousand times better” than it was 15 years ago.
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“When I started, we couldn’t hire anyone,” Samuels said. “And now we have people coming from Ivy League schools… contacting us about jobs. Some of the smartest young people have moved to Kentucky. So the industry has brought to Kentucky… The brain is huge.”
