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Kentucky bourbon production reaches nearly 50-year high

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LOUISVILLE, Ky. (AP) — Kentucky bourbon production swelled to a nearly 50-year high last year, and with new distilleries joining the boom, more of the amber whiskey is expected to reach stores and bars.

Bluegrass state distilleries filled nearly 1.9 million bourbon barrels last year, the highest level since 1967, the Kentucky Distillers’ Association said Wednesday. Last year’s production surged 44 percent above the pace in 2014 — the biggest year-to-year difference since 1967, it said.

More than 6.6 million barrels are aging in warehouses dotting the state’s bourbon country, the most since 1974, the industry group said. Since the turn of the century, Kentucky’s bourbon output has skyrocketed by more than 315 percent, it said.

“I wish I were 40 years younger right now,” said Bill Samuels Jr., who retired after a long career as the top executive at Maker’s Mark, the brand started by his parents.

Kentucky is home to about 95 percent of the world’s bourbon production.

The bourbon sector has benefited from improved brand development and marketing campaigns and an emphasis on premium products, and it looks poised for continued higher volumes in coming years, Samuels said.

That’s what the Bardstown Bourbon Co., an industry newcomer, is counting on.

It plans to start production at its $25 million facility in September, making whiskey for its own brands and for small distillers and brand owners lacking sufficient distilling operations.

Demand has been strong enough that the new distillery expects production to quickly approach its 1.5 million proof gallon annual capacity soon after opening, said the company’s president and CEO, David Mandell. That means an expansion could soon be in the works, he said.

“From our perspective, we’re at the beginning of a large growth cycle,” Mandell said.

It’s among a handful of larger distilleries starting production later this year, with more scheduled to open in a year or two, said Eric Gregory, president of the distillers’ association.

He said KDA members are in the midst of a building boom totaling at least $1.3 billion. It includes new production and storage facilities, expanded bottling lines and tourism centers.

The growing inventory amounts to a big bet among distillers that demand will stay strong when the whiskey is ready for bottling. Distillers see it as a winning hand, Gregory said.

“There is always a little bit of a crystal ball going on when you put bourbon back” for aging, he said. “But these distilleries have experts who predict far out into the future as to what the market’s going to look like.”

Last year, combined U.S. revenues for bourbon, Tennessee whiskey and rye whiskey shot up 7.8 percent to $2.9 billion, up $210 million from the prior year, the Distilled Spirits Council said in early February. The growth was led by demand for high-priced, super-premium brands.

Bourbon and Tennessee whiskey exports topped $1 billion for the third straight year, it said.

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