Raise your glass to Kentucky bourbon’s rising economic kick

FRANKFORT, Ky. — Bourbon’s economic potency is getting stronger with age, increasing its impact on Kentucky by $1 billion in the past two years as global demand for American whiskeys continues to grow.


Other whiskeys are sharing in the good times, too. And pricier spirits are in strong demand. Two reports released Tuesday — one in Kentucky, the other in New York — showcased continued growth for whiskey makers.

Combined U.S. revenues for bourbon, Tennessee whiskey and rye whiskey shot up 7.7 percent to $3.1 billion in 2016, the Distilled Spirits Council said in the report released in New York. Domestic volumes rose 6.8 percent last year to 21.8 million cases.

“U.S. sales of all American whiskeys are blazing hot, said Frank Coleman, a spokesman for the distilled spirits trade group. “The more expensive products are actually flying off the shelves the fastest.”

Bourbon, Tennessee whiskey and rye whiskey revenues and volumes continued to outpace the overall distilled spirits industry, the council said in its annual report. Rye whiskey is a small portion of those overall figures, but its volumes surged 17 percent last year.

U.S. volumes for the category’s super-premium products rose 11.8 percent last year, while revenues were up 13.5 percent, the council said.

At the other end of the price spectrum, volumes were up 11.4 percent in the value category and revenues increased 13.1 percent.

The industry has cashed in on the growing popularity of cocktails.

“Spirits makers continue to develop new innovations to appeal to a growing audience of adult millennials, and they are responding,” said Distilled Spirits Council President and CEO Kraig R. Naasz.

Export volumes for bourbon, Tennessee whiskey and rye whiskey products surged by 10.2 percent last year despite challenges posed by a strong dollar, which makes U.S. goods more expensive in foreign markets.

Distilling contributes $8.5 billion annually to Kentucky’s economy, up $3 billion since 2008 and a $1 billion increase in two years, according to a report by the University of Louisville’s Urban Studies Institute.

The state is home to 95 percent of the world’s bourbon production.