Robert Downing, lead distiller at Barrel House Distilling Co. in Lexington, mixes and cooks corn for the distillery’s Rockcastle Bourbon.
Kentucky bourbon contributes $8.6 billion annually and more than 20,000 jobs to the state’s economy, according to a new economic impact study released by the Kentucky Distillers’ Association.
The study also indicates that the bourbon industry in Kentucky generates $235 million in local and state tax revenue and a total annual payroll topping $1 billion.
In the past decade, the number of distilleries in Kentucky has more than tripled to 68, and the number of counties with a distillery has quadrupled to 32. The study also reports that here are now nearly two barrels of spirits for every person in the Commonwealth, valued at $3 billion, or three times more than 2009.
Eric Gregory, president of the Kentucky Distillers’ Association, applauded state and legislative leaders for their work to modernize alcohol laws, reform tourism restrictions and address the industry’s tax concerns.
“By working together to remove unnecessary and artificial barriers to business, we have transformed Kentucky bourbon from an industry once viewed as ‘sin’ to one that truly defines signature impact, expansion and global image,” Gregory said in a release announcing the study results. “This is the epitome of how a public-private partnership works.”
The biennial study was conducted by economists Dr. Paul Coomes and Barry Kornstein, formerly of the University of Louisville, in conjunction with the Kentucky Distillers’ Association.
In the study, Coomes noted that the analysis is based on data collected before retaliatory tariffs on whiskey exports were imposed by the European Union, China, Canada, Mexico and Turkey. Therefore, the impact on Kentucky distilling is not yet detectable in this report.
Major highlights of the study include:
- Distilling contributes $8.6 billion to Kentucky’s economy, a 60 percent increase since 2009.
- More than 20,120 people are employed by the spirits industry, a 104 percent increase in the last 10 years and 2,600 more since 2016.
- Payroll for those workers increased to more than $1 billion, from $442 million in 2009.
- Distilleries are in the middle of a $2.3 billion building boom, nearly twice the projection from the previous study in 2017.
- Average salary for distillery employees is $94,899, up from $77,000 a decade ago.
- More than $235 million in tax revenue for local and state governments is generated by spirits production and consumption, an 88 percent increase since 2009.
- Distillers paid a record $23 million in barrel taxes in 2018 to fund local schools, libraries and other community needs. That’s more than double ($10 million) the amount from a decade ago.
- The tax-assessed value of aging barrels is now $3 billion, triple the value in the last 10 years.
- The number of distilleries has grown to 68, a 258 percent increase in the last 10 years.
- Currently, 32 Kentucky counties have at least one distillery, up from only 8 in 2009.
- Bourbon barrel inventory, now at 7.5 million, has reached its highest level since 1972. Bourbon production (new barrels filled) has increased 115 percent since 2009.
- Kentucky exported more than $450 million in bourbon and other spirits in 2017; the export value has tripled in the last 20 years.
- KDA distillers bought more than nine million bushels of corn and other grains from Kentucky farmers in 2017, more than half of all distillery corn purchases.