Kentucky Bourbon Biz Helps the World Get Drunk On American-Made Alcohol


The Bluegrass State of Kentucky has long been described as a perfect cultivater for alcoholic beverages. The state produces and ages 95% of all the bourbon in the world. Only Kentucky has the perfect natural mix of climate, conditions, and pure limestone water necessary for producing such a high-quality and massive global supply.

Bourbon was born in the Bluegrass almost 200 years ago. The alcohol is a completely natural product consisting of three ingredients: water, grains, and yeast. All three are equally important to the taste of the final product, and an excellent source of water must be used to cook the grains and to cut the final product to bottling proof. All facets of this recipe must be free of impurities or it will negatively affect the taste.

Today, bourbon is a signature industry that pours hundreds of millions of dollars into Kentucky’s economy, and helps extend the economic reach of the state to global markets.

According to DISCUS reports, bourbon accounts for $752 million of the total of $1.1 billion in U.S. distilled spirit exports in 2008. By volume, Kentucky bourbon is by far the biggest export among American distilled spirits, accounting for 25 of the 54 million proof gallons shipped for all spirits categories in 2008.

The biggest importers of bourbon are Australia, Germany, United Kingdom, Japan, France, and New Zealand, which combined account for 71% of the total U.S. imports of bourbon. Interestingly, about 44% of bourbon exports are in bulk, rather than bottled. Indeed, bulk shipments dominate exports to far away Australia and New Zealand.

State and local governments receive $125 million in taxes every year from spirits production and consumption. Kentucky itself taxes distilled spirits higher than any other state except Alaska. There are seven different taxes on every bottle of spirits in Kentucky. Sixty percent of the retail price of every bottle goes to taxes of some sort.

Local communities benefit greatly from distillery operations, which generate $9 million each year in taxes on aging barrels and property and create essential funding for schools, libraries, fire departments, and more.

Nearly 10,000 workers owe their paychecks to Kentucky’s distilling industry. Estimated annual payroll is $442 million, including vital support jobs in barrel production, bottles, grain, trucking, transportation and more.

Kentucky hosts nearly 43% of all distilling jobs in the United States. Distillery growth has helped Kentucky weather the recession by adding 6% of the new jobs created this decade, while other manufacturers have shed 19% of their employment. With a high job multiplier of 3.29, distilling creates more spin-off jobs than other signature industries in states like Kentucky, including tobacco farming (1.267), horse farms (1.181) and coal mining (2.142).

The tourism impact of the Kentucky Bourbon Trail program is skyrocketing. Distilleries have enjoyed more than 1.7 million visits in the last five years alone. And, more than 9,000 people completed the Kentucky Bourbon Trail tour in 2010, a 300% increase from 2009.