Overview of the Kentucky Bourbon Industry Impact Study

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Researchers with the Kentucky Agricultural Development Fund recently conducted further investigation into the impact of the distilling industry of Kentucky on its economy. Kentucky is well known for its Bourbon and due to this fact the study is the third of its kind put on by the Kentucky Agricultural Development Fund. It is important to know the impact of a major product on an area, it allows you to better predict what will happen over the years.

To better understand the Kentucky bourbon industry here is an idea of its size. In 2013 there were 3,594 employees working in the distilling industry at a total of 31 licensed companies. Out of those 31 companies 26 of them are long standing establishments. These industries spread 23 counties and over 22 cities, making the 31 different companies fairly spread out. These numbers do not include jobs that are created by the bourbon industry that do not work directly for the distillery.

Kentucky’s connection with bourbon distilling is symbiotic. Many people around the world demand bourbon and Kentucky is one of the biggest supplies of the world’s bourbon, in fact they provide 95% of the United States’ bourbon. Despite the fact that there is the potential for any other state to make bourbon Kentucky has managed to dominate the arena, its only competition: Micro-distilleries. During one particular 2013 bourbon event the taxes paid by visitors to Kentucky was a big source for funding for the state. Local residents only accounted for $205,182 while that of visitors accounted for $419,275.

The state also taxes distilleries and charges licenses for producing spirits which accounts for even more money generated by the state. Not only does the state profit from the bourbon industry, the residents of the state do too. The average salary for a distillery employee in Kentucky is $91,188 as of 2013. This is almost forty-thousand dollars more than the national average salary.

3,594 employees work in the distilling industry in Kentucky but the industry also creates local jobs farming the grain that is used to create bourbon. The researchers do take a moment to point out that there is the potential for the bourbon industry to make even more money for the state though. Currently only about 40% of the grains used by the bourbon industry come from Kentucky; however, it is estimated that that could be doubled if the distilleries decided to try and capture more in-state grains.

Distilleries are closely tied to many other industries in Kentucky. Many jobs besides farming go in to making and selling bourbon. There is marketing, distribution, and utilities. This isn’t to mention all of the equipment production needed to support a distilling operation. In addition to just benefiting other industries in the state, bourbon distillers are interested in keeping the state well maintained to attract more tourists so they have invested over $400,000,000 in capital improvement projects since the year 2008, that’s an additional 1,470 jobs created to work those improvement projects.

In summary the Kentucky economy is closely tied with bourbon production, especially during poor financial times. The production of bourbon always seems to be desired so it is a business that will always be providing an income. This industry is only projected to grow. Between 2008 and 2013 the domestic sales of Bourbon and Tennessee whiskey grew by nearly 20%. It hasn’t shown any signs of stopping.

We look forward to keeping you updated on the bourbon industry. As a supplier of grains to this industry, it’s important for us to keep informed within all things “Bourbon”! If you should need a quote or want to learn more about the grains we provide – we’d welcome the email from you! Contact Brooks Grain, LLC

*Statistic Source: The Economic and Fiscal Impacts of the Distilling Industry in Kentucky.

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