Category Archives: Research

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.

Economic Dashboard

Introducing Commerce Lexington’s Economic Dashboard! This tool measures aspects of Lexington and the Bluegrass Region that are important to economic development, including our highly educated workforce, business climate, foreign direct investment, and quality of life. (Full-sized version can be found here.)

This is the first year of the Dashboard. Data reflects both Lexington and the Bluegrass Region. Detailed and supplemental information is available.

Life Sciences and Biotech in Lexington

The Bluegrass Region has acquired a niche within the plant and genetic engineering segment of the life sciences industry, and many area companies are creating valuable pharmaceuticals, including Alltech, Naprogenix, ParaTechs Corporation, MosquitoMate, Evolva, Transposagen Biopharmaceuticals, and Hera BioLabs.

Alltech is a top ten animal health company founded in Lexington, with biosciences centers in the U.S. and Ireland, offices and distributors in more than 120 countries, and nearly 100 production facilities globally. Alltech’s $200 million algae production facility in Winchester is one of the largest algae production facilities in the world and was so successful that Alltech expanded to a second facility in Brazil. Algae are expected to become a crucial area of development as the United States pursues renewable sources of energy to power the country in the coming decades. Locally, the company is known for its award-winning line of beers and spirits with a brewery and distillery in downtown Lexington and, soon, in Pikeville.

Naprogenix is a startup biotech research company that derives compounds from native Kentucky plants to develop new technologies. Plants have a variety of uses in food and medicine and Naprogenix enhances specific bioactivity and qualities of native plants through genomics and molecular pharmacology to increase their usefulness to the pharmaceutical, health, and agrochemical industries. Naprogenix’s products are natural, giving the company a competitive advantage as consumers increasingly pull away from synthetic ingredients in both chemicals and medicines.

ParaTechs Corporation recently developed a bio-insecticide targeting corn earworm moths, the highest crop-damaging pest in North America and the second-highest worldwide. ParaTechs’s bio-insecticide is a mutated nudivirus, a sexually transmitted disease that sterilizes 100% of corn earworm moths it infects, compared to a 30% effectiveness rate when the nudivirus occurs in nature. In addition to increased effectiveness, ParaTechs’s bio-insecticide reduces the need for chemical pesticides and is unlikely to affect other species that do not mate with corn earworm moths.

MosquitoMate developed a biopesticide to reduce or eliminate Asian tiger and Aedes aegypti mosquitoes through sterilization. These pests carry several diseases that are harmful to people and animals, such as dengue, yellow fever, heartworm, West Nile virus, chikungunya fever, and the Zika virus. MosquitoMate infects male mosquitoes with a form of Walbachia bacteria and releases them to mate with females, who are permanently sterilized by the Walbachia. As a result, the next generation of mosquitoes is reduced and the spread of disease is prevented. MoquitoMate’s biopesticide is not transmitted to humans, animals, or other insects, and does not include chemicals or genetic modification.

Evolva, formerly Allylix, Inc., generates and isolates natural chemical compounds that are in high demand for pharmaceutical, agriculture, and flavor-and-fragrance industries. Evolva uses a reengineered version of the fermentation process to grow compounds in a way that is faster and more reliable that the traditional plant extraction process, and cheaper and less complicated than the chemical synthetization process. Evolva is developing a library of compounds that will make many previously unstudied compound samples available for research screening by biotechnology and pharmaceutical companies. These compounds can be used in the manufacturing of products such as foods, medicines, cosmetics, insecticides, and industrial cleaners.

Transposagen Biopharmaceuticals is a worldwide leader in genome engineering technologies and services with applications in therapeutics, research, drug discovery, bioproduction, clinical genetic testing, and agriculture. Transposagen specializes in genetic manipulation technologies, stem cell engineering services, and creating genetically modified laboratory rats.

Hera BioLabs Inc. is a Lexington-based Contract Research Organization (CRO) and a spinoff of Transposagen. Like Transposagen, Hera uses gene editing tools and services to manufacture genetically specialized products and services. In 2016, Hera announced an investment of $1.8 million to move its operations from its current location on the University of Kentucky campus and establish a new headquarters.

Many of these companies operate around the world and several were founded by University of Kentucky researchers.

For more about each of these companies, check out our Life Sciences webpage and white paper.