Lexington’s Bourbon Industry

For more than 200 years, Kentucky’s legendary distilleries have crafted the world’s finest bourbons and Lexington is at the heart of the Bourbon Trail. In fact, whiskies are Kentucky’s 9th largest export at $295 million in 2016. To understand the economic significance of the bourbon industry, the Urban Studies Institute at the University of Louisville recently released a report titled “The Economic and Fiscal Impacts of the Distilling Industry in Kentucky” for the Kentucky Distillers’ Association.

The report estimates that about one third of the nation’s bourbon industry employment, payroll, and production workers are located in Kentucky. There are around 4,300 direct jobs in the bourbon industry at distillery production sites and corporate offices, and another 15,000 to 17,500 jobs supported by the bourbon industry with nearly $800 million in payroll.

Employment and average annual wages have increased nearly every year since 2001. In fact, the average annual wage has nearly doubled, rising from $53,000 in 2001 to over $95,000 in 2015 (most recent year for which data is available).

There are more than 50 distilleries in Kentucky, a threefold increase since the Urban Institute’s 2009 study on the bourbon industry. This is largely due to the increasing presence of craft distilleries. In fact, the Craft Spirits Data Project estimates that there are 35 craft distilleries in Kentucky (as of August 2016). Last year, distilling production and consumption contributed $190 million in tax revenue to Kentucky state and local governments.

Lexington is at the heart of Kentucky’s bourbon industry. There are 11 distilleries located in the Bluegrass Region, including Alltech’s Lexington Brewing and Distilling Company in Lexington, Buffalo Trace and Castle & Key in Frankfort, and Woodford Reserve in Versailles, with the James E. Pepper brand of the Georgetown Trading Co. opening soon in the Distillery District near downtown Lexington.

The Kentucky Distillers’ Association conducted a survey of its members and found that capital projects from 2010 to 2015 totaled $485 million and anticipated capital projects for 2016 to 2021 are around $620 million. These investments provide tax revenue for state and local jurisdictions and indicate a strong future for the bourbon industry in Kentucky.

To support the growing bourbon industry, the University of Kentucky has begun offering courses in Distillation, Wine, and Brewing Studies within the College of Agriculture, Food, and Environment. These courses will help provide a local workforce, continued research, and innovation to help the uniquely Kentucky bourbon industry thrive. Furthermore, there are more than 70 wineries in Kentucky and the number of craft breweries and cideries are increasing every year.

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