KY Distilling Industry to See $2.3B Building Boom by 2022

In Kentucky, $2.3 billion in capital projects–including new distilleries, warehouses and tourism centers–are expected to be completed or planned by 2022, according to an economic impact report released this week.

The extensive economic impact report, conducted by economists Dr. Paul Coomes and Barry Kornstein in conjunction with the Kentucky Distillers’ Association, outlines 10 years of growth in the Kentucky distilling industry, from 2009-2019.

As part of the report, they surveyed all KDA members, asking what they’ve spent on construction and other capital investments over the last five years as well as what they plan to spend the next five years. They reported collectively spending $1.1 billion over the last five years and they plan to spend $1.2 billion over the next five years. Every KDA member reported “significant investments,” per the report.

In fact, in 2018, the following companies made announcements to expand or build out capabilities in the state:

— Diageo plans to invest $130 million over three years to build a new distillery in Lebanon, KY.
— Heaven Hill announced plans for a renovation, expansion and rebrand of its current Bourbon Heritage center in Bardstown, KY as part of a $65 million investment plan.
— Beam Suntory plans to invest a total of $164 million to increase capacity at two distillery locations in the state.
— Kentucky-based RH Resolute Distillery plans to invest $9.7 million to takeover an uncompleted distillery in Hickman.
— A Diageo affiliate purchased 350 acres near its Bulleit distillery for $2.8 million.

“As a signature industry, Kentucky embraces with open arms any business looking to build on the growing momentum of the bourbon industry,” says Gov. Matt Bevin.

KY DISTILLING INDUSTRY BY THE NUMBERS. Over the last 10 years, there’s been a 258% increase in the number of distilleries in the state, from just 19 in 2009 to 68 by 2019.

Distillery tourism is also booming. The number of stops on the Kentucky Bourbon Trail and Craft Tour hit 1.4 million in 2018, that’s a 370% increase from the distillery stops recorded in 2009 (less than 300,000). And it’s on track for record growth by 2020.

Kentucky bourbon now adds $8.6 billion annually to the state’s economy, providing $325 million in local and state tax revenue.

“What a monumental success story,” says KDA president Eric Gregory. “By working together to remove unnecessary and artificial barriers to business, we have transformed Kentucky bourbon from an industry once viewed as ‘sin’ to one that truly defines signature impact, expansion and global image.”


More than half of US consumers (52%) say they’re trying to reduce their alcohol consumption, according to a recent IWSR study. But more than 70% said they have not yet considered switching to low or no alcohol products, which may be due to the limited amount of products available.

In the US, the number of low/no alcohol brands represents just 0.5% of the total beverage alcohol market, according to IWSR. But thanks to the health and wellness trend, particularly popular among younger generations, IWSR expects the low/no alcohol market to provide big opportunities for the bev alc industry.

IWSR expects the largest category gainer in the segment will be RTD products, which they project will grow nearly 40% by 2022. After RTD is wine (up 17.7%), then spirits (up 7.1%), and finally beer (up 5.6%). Even though, currently, low/no alc beer accounts for the majority of the low/no alc market.

“The ‘Dry January’ movement isn’t new, but one of the reasons we’ve heard so much more about it this year is the broader trend that points to consumers’ increased interest in physical and mental health. And that’s creating an interesting shift in consumer preference for low and no alcohol beverages, outside of soft drinks,” says IWSR ceo Mark Meek, adding “For leading producers of beverage alcohol, this obviously presents considerable opportunity to develop new products, claim their share of the category, and ultimately grow revenue.”


Earlier this week, Texas Senator Brian Birdwell introduced a bill (SB 645) to remove certain limits and exceptions to package store permits in the Lone Star State.

Currently, the Texas Alcoholic Beverage Commission code limits the number of package store permits a person can hold to five. But there are two exceptions: if the permits were owned before May 1, 1949; and the consolidation exception for family members, or consanguinity exception.

“For generations, Texas law has unfairly granted some families the ability to own an unlimited number of package stores while restricting others to a maximum of five. This protectionist arrangement has enabled a handful of entrenched package store owners to dominate the market while restricting competition and, ultimately, choices for consumers,” says Distilled Spirits Council vp Dale Szyndrowski.

If these issues sound familiar, that’s because Wal-mart filed suit against the TABC challenging those same sections of the TABC code in 2015.

You may recall, US District Judge Robert Pitman ordered the TABC to cease enforcement on the aforementioned sections of the code [see WSD 03-21-2018]. The case is currently sitting in the appeals court.


WINE INSTITUTE RECEIVES $9.8 MILLION FROM USDA to “identify and access new export markets” as well as mitigate “the effects of unjustified trade retaliation against US farmers and exporters,” as part of the department’s Agricultural Trade Promotion Program, per the USDA. “These funds come at a critical time when California wineries and wine grape growers are competing for market share with wine producers around the world who receive substantial subsidies from their government,” says WI chief Robert Koch. “The additional resources from ATP will allow us to expand promotional activities and distribution channels in key markets including: China, Japan, Canada and the United Kingdom.”

RNDC TO DISTRIBUTE SAZERAC’S NEWLY ACQUIRED BRANDS. Sazerac has appointed Republic National Distributing Co. to distribute its newly acquired brands across CO, OK, LA, IN, KY, FL and SC. You’ll recall, Sazerac purchased 19 brands from Diageo including Seagram’s VO, Goldschlager, Parrot Bay, and Myers’s Rum, for $550 million [see WSD 11-12-2018].

MGP INGREDIENTS LAUNCHES NEW BOURBON BRAND. MGP Ingredients has launched Eight & Sand Bourbon Whiskey, a blended bourbon whiskey brand. The name is inspired by the American railroad, referring to the eighth notch on a train’s throttle and the sand used on the wheels to prevent slipping, per a release. It will be available across AZ, CO, IL, IN, KS, KY, MN, MT, MO, NE, TX and WI for approximately $30 a 750 ml.

FOUR ROSES TO LAUNCH PERMANENT LINE EXTENSION. Four Roses Small Batch Select is the distillery’s first permanent line extension in more than 12 years, per a release. The bourbon is non-chill filtered and bottled at 104 proof. It will launch this spring in KY, NY, CA, TX and GA.

HENNESSY LAUNCHES ‘WE ARE’ CONTENT SERIES. Hennessy is celebrating Black History Launch with the launch of “We Are,” a four-part content series highlighting the stories behind trailblazers. The first part, called “We Are Creators,” includes hip hop artist A$AP Ferg, fashion designer Kerby Jean-Raymond of Pyer Moss; DJ and son of Jam Master Jay, TJ Mizelli and vintage designer Sami Miro. The company will also launch “We Are Proud,” “We Are Disruptors” and “We Are Ambitious.”

Until Monday,

“Judge each day not by the harvest you reap but by the seeds you plant.” – Robert Louis Stevenson

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