Kentucky Ag News

Agriculture Commissioner Ryan Quarles

Agriculture Commissioner Ryan Quarles, second from left, uses a prop to illustrate bourbon's impact on Kentucky's corn industry. (Kentucky Department of Agriculture photo)


Kentucky bourbon boom adds $1 billion to state economy and 2,000 jobs in the past two years


Kentucky Distillers' Association


FRANKFORT, Ky. - Kentucky’s skyrocketing Bourbon industry shows no signs of slowing down,
as the signature spirit increased its economic output by $1 billion in the last two years alone and
added another 2,000 distillery-related jobs to its workforce, according to a new study released earlier this month.

Kentucky Bourbon now pours $8.5 billion each year into the state’s economy, generates as many as
17,500 good-paying jobs with an annual payroll topping $800 million, provides $825 million in tax
revenue, and is in the middle of a $1.2 billion building boom.

Gov. Matt Bevin unveiled the findings at a press conference Feb. 7 in Frankfort along with top state
and business leaders. The biennial study was conducted by the University of Louisville’s Urban
Studies Institute in conjunction with the Kentucky Distillers’ Association (KDA).

"The powerful growth of Kentucky's Bourbon industry is a testament to our proud history of
innovation, engineering and manufacturing,” Gov. Bevin said. “It is a genuine, home grown, only-in-
Kentucky success story.

“As we continue cutting bureaucratic red tape across the Commonwealth, we will pave the way for
even more economic opportunity and job growth in the Bourbon industry, as well as every other
industry across the Bluegrass state."

Senate President Robert Stivers, R-Manchester, agreed and applauded the industry’s economic
expansion and large spin-off impact, saying, “Kentucky Bourbon is proof that our pro-business tax
agenda works.

“By virtually eliminating the barrel tax, we paved the way for more than one billion dollars in new
distillery investments and created jobs for thousands of Kentuckians,” he said. “That growth is
exactly what an authentic signature industry can do for Kentucky.”

House Speaker Jeff Hoover, R-Jamestown, said the study just scratches the surface of Bourbon’s
growing impact. Many distilleries are still working to implement tourism reforms under Senate Bill
11, which passed the House last year by historic margins.

“There were more than one million visits to the Kentucky Bourbon Trail and Kentucky Bourbon
Trail Craft Tour experiences last year, elevating the Kentucky tourism experience to levels never
seen before,” he said.

“The more we do as a legislature to responsibly regulate this industry in this global economy,
will only serve to fuel this growth in good-paying jobs and investment.”

KDA President Eric Gregory said, “This report proves that Kentucky Bourbon is the new fuel for
the state’s economy. Jobs, investment and revenue are at all-time highs and paying tremendous
dividends to every corner of the state.”

Major highlights include:

  • Distilling contributes $8.5 billion to Kentucky’s economy, up $3 billion since 2008 and $1 billion
    in the last two years alone. This includes direct, indirect (spin-off) and induced impacts;
  • As many as 17,500 people owe their paychecks to the spirits industry; either directly, or because
    their employers are part of the industry supply chain, or due to the household spending of those
    people. This is up 2,000 jobs from 2014;
  • Payroll for those workers increased to more than $800 million, from $707 million in 2014;
  • New craft distilleries employ 200 people with salaries totaling more than $5.5 million;
  • Average salary for distillery employees is $95,089;
  • Distilleries are in the middle of a $1.2 billion building boom driven by the virtual repeal of the ad
    valorem barrel tax and new tourism reform measures;
  • Use of locally grown corn has increased by 65 percent in the last two years, aiding Kentucky’s
    farm families;
  • Distilling has the second highest job multiplier in the state when it comes to total number of jobs
    and spin-off factor, behind only light truck and utility vehicle manufacturing;
  • More than $190 million in tax revenue for local and state governments is generated by spirits
    production and consumption, distillers pay another $625 million in federal excise taxes;
  • At 34.4 cents per dollar of output, Kentucky taxes spirits higher than all other 536 industries in
    the state. Kentucky’s spirits tax rate is fifth highest in the country among open market states;
  • The number of distilleries has grown to 52 – the most distilleries in Kentucky since the repeal of
  • Bourbon barrel inventory, now at 6.7 million, has reached its highest level since 1974;
  • If the industry continues to grow at this rate, economic output will exceed $10 billion by 2020,
    with employment more than 20,000, payroll over $1 billion and state tax revenue $200 million.

Agriculture Commissioner Ryan Quarles said he was particularly pleased with the increased usage of
Kentucky corn, which amounts to 15 to 20 million bushels. “We have been working with the KDA
and our distilleries to source more local corn, so it’s good to see that our efforts are paying off.

“Agriculture has been at the heart of Kentucky Bourbon for centuries, since the first pioneer distillers
started transforming their excess corn to spirits. Now it’s a global partnership as our distillers thrive,
as this study shows.

“We’re thrilled that as bourbon's global presence grows, so do opportunities for Kentucky's farmers.”

Louisville Mayor Greg Fischer said, “We’ve seen first-hand how Bourbonism can boost economic
development and revolutionize tourism. The combination of Louisville’s unique distillery attractions
and growing restaurant scene is drawing national and international attention – and visitors.”

David Adkisson, President and CEO of the Kentucky Chamber of Commerce, said, “The outlook is
bright for Bourbon – and will be brighter as we continue to improve the business environment of
Kentucky. There’s no doubt that Kentucky Bourbon is enjoying a historic renaissance.”

But he noted Kentucky’s rank in the number of distilleries and overall workers has slipped
nationwide. “Other states are catching up. We must continue to be proactive by cutting outdated
regulations, improving our tax code and encouraging businesses to grow and create more jobs.”