Kentucky’s $9 billion bourbon industry has more than doubled jobs, payroll since 2009

Despite the COVID pandemic, Kentucky’s bourbon industry is hitting new highs. According to the latest economic impact study, distillers in 2020 had nearly $9 billion in impact on the Commonwealth.

“It is exciting to see bourbon continuing to boom and to bring Kentucky along with it,” said Gov. Andy Beshear in a press conference in the Capitol Rotunda in Frankfort.

“Now is not only the time for bourbon, it’s the time for Kentucky.”

Beshear and the Kentucky Distillers’ Association unveiled the 2021 economic study, commissioned by the KDA from economist Paul Coomes. This is the sixth version of the report, which he has prepared since 2009.

Beshear also thanked the distillers, who recently raised more than $3.4 million for tornado relief for Western Kentucky.

The governor hailed the “decades-long resurgence of our native spirit,” particularly under difficult circumstances.

“The KDA’s latest bourbon impact study numbers are outstanding,” Beshear said. “That would be true in any year but to see this during a pandemic is nothing short of incredible.”

How Kentucky’s bourbon industry is growing

▪ $8.94 billion in annual economic impact, according to the latest study, from more than 95 distilleries owned by 75 companies in 40 Kentucky counties.

▪ The distilling industry employs 22,500 people with $1.23 billion in annual payroll, the study said. Since 2009, jobs and payroll have more than doubled, Beshear said.

▪ Average salary in the bourbon industry topped $100,000 for the first time, at $101,567.

▪ The industry’s impact on farmers also is growing, Beshear said, with more than 12.75 million bushels of corn purchased from Kentucky farms. Another 4 million bushels of corn were purchased form outside the state.

▪ Industrywide, Kentucky distillers are in the midst of a $5.2 billion building boom, Beshear said, with $3.3 billion pledged for projects over the next five years. “That means construction jobs,” he said.

Much of that building boom will be for new rickhouses to store aging bourbon: Last year, the distilleries produced 2.4 million barrels, the third time that production has topped 2 million.

The distilleries also are maximizing tourism with new visitors centers at major distilleries including Four Roses and Heaven Hill.

One of the only soft spots economically: Exports, which were down $170 million from previous year due to retaliatory tariffs. But trade negotiations under the administration of President Biden resulted in the removal of all tariffs.

KDA President Eric Gregory thanked legislative leaders on both sides of the aisle for their past help with tax incentives and other bills that have enabled the growth of the industry.

Senate President Robert Stivers, R-Manchester, created the Bourbon Barrel Reinvestment Tax Credit in 2014, which offset the tax that distillers pay on aging barrels. Gregory said the credit stimulated barrel production leading to now-record inventories.

The distillers are lobbying for continued tax reform efforts to better compete with distilleries in other states, including more relief from barrel taxes.