Thu. Jul 25th, 2024

Kentucky recorded its best year for growth of its signature bourbon and spirits industry, with over $2.1 billion in new investments and approximately 700 new jobs for Kentucky residents.

The Governor celebrated the industry’s continued success Thursday as he will join state officials and leaders at Buffalo Trace Distillery to fill the company’s 8 millionth barrel of Kentucky bourbon since Prohibition.

The event caps what has been a monumental year for the Kentucky bourbon and spirits industry, including the sector’s largest investment in state history, announced in October, and new-location and expansion projects throughout the state.

“Kentucky’s bourbon and spirits industry continue to set itself apart as we conclude another tremendous year of growth statewide,” said Gov. Beshear. “The momentum has been incredible, and the demand for Kentucky bourbon keeps growing worldwide. With monumental investments from companies like Sazerac Co., Beam Suntory and Pernod Ricard, our bourbon industry is reaching new heights. I want to thank everyone who has made this growth possible, from the companies themselves to the communities they’re calling home. Bourbon has a truly statewide impact, with partners in every corner of the Commonwealth.”

Currently, the commonwealth has distilleries in one-third of Kentucky counties, with that footprint expected to increase in the years ahead. A large portion of this year’s announcements reside in rural Kentucky, where projects total $1.98 billion in announced investments and 550 new jobs. The commonwealth also saw five new foreign-owned projects contributing to over $730 million in investments and 125 new jobs.

These commitments add to the commonwealth’s booming bourbon sector, a nearly $9 billion signature industry in Kentucky generating more than 22,500 jobs with an annual payroll exceeding $1.23 billion.

Since the start of the Beshear administration, about 70 spirits-related announcements have generated roughly $2.8 billion in new investment, creating more than 1,300 full-time jobs for Kentuckians. Gov. Beshear also worked with U.S. Commerce Secretary Gina Raimondo to remove harmful bourbon tariffs on trade with the United Kingdom and European Union, ensuring continuing strength in the export market, with $430.9 million in all spirits and $339.3 million in whiskey exports in 2021 alone. And Kentucky is on pace to exceed those figures in 2022.

Contributing to this year’s growth within the industry were several recognizable and startup brands, including Atomic Brands, Augusta Distilling, Bardstown Bourbon Co., Beam Suntory, Bluegrass Bottling, Blue Run Spirits, Boundary Oak Distillery, Casey Jones Distillery, Castle & Key Distillery, Four Roses, Heaven Hill Distillery, IJW, Jackson Purchase Distillery, Kentucky Cooperage, The Kentucky Whiskey Co., KWH, Log Still Distillery, New Riff Distilling, Pegasus Industries, Pernod Ricard USA, Rabbit Hole Spirits, Sazerac Co., Ultra Pure, Western Kentucky Distilling Co., Wild Turkey Distillery and Willett Distillery.

This year, the commonwealth saw its largest spirits-related investment in state history, welcoming Sazerac Co.’s expansion with a $600 million commitment in Laurel County, creating 50 full-time jobs.

Beam Suntory was another top investor in the Kentucky bourbon industry this year, with an investment of over $400 million at Booker Noe Distillery in Nelson County, creating more than 50 full-time positions.

Last week, Pernod Ricard USA announced an investment of up to $250 million, creating 55 full-time positions to establish a fully carbon neutral distillery in Marion County.

In June, Heaven Hill broke ground on a $135 million distillery project that will return the company’s distilling operations to Nelson County for the first time since the 1996 fire that resulted in a total loss of the previous distillery, creating 38 full-time jobs for Bardstown residents.

Willett Distillery was also among the largest investments of the year and will locate in Washington County with a commitment of nearly $93 million toward a new-location project that will create 35 full-time jobs for Kentuckians.

Kentucky’s bourbon and spirits industry extends beyond distilling and warehousing as well. The state saw significant investment in the ecosystem around bourbon production in the commonwealth, which includes cooperages, bottle makers, packaging and distribution.

Bluegrass Bottling, a Kentucky-based, woman-owned business, in August announced a $6.25 million investment, creating 27 full-time jobs for the Lancaster area. The company is constructing a new bottling facility and will operate under the name Poor Ridge Distillery. Bluegrass Bottling’s services include blending, proofing, brand development, labeling, private labeling, specialized packaging and designing of spirits brands.

Another company building on the ecosystem surrounding bourbon production is Pegasus Industries in Shelbyville. In March, the company announced the expansion of its headquarters, investing $738,000 and creating 26 new full-time jobs. The project is including new technology, machinery, shipping docks, equipment and systems to help process more orders and assist with specialized packaging and promotional items.

Kentucky Cooperage, a subsidiary of Independent Stave Co., announced an expansion in February with a $4.1 million investment at its used barrel operation in Marion County. The project will create up to 20 full-time positions and contribute to the wide range of barrel and oak products available to distilleries in Kentucky.

The continued growth of Kentucky’s bourbon industry builds on recent economic momentum in the state.

In 2021, the commonwealth shattered every economic development record in the books. Private-sector new-location and expansion announcements included a record $11.2 billion in total planned investment and commitments to create a record 18,000-plus full-time jobs across the coming years. Kentucky’s average incentivized hourly wage for projects statewide in 2021 was $24 before benefits, a 9.4% increase over the previous year.

That momentum has continued into 2022 with 160 new-location and expansion announcements totaling nearly 14,500 full-time jobs behind nearly $9.3 billion in new investment through November.

New job creation is accompanied by rising wages across the commonwealth. The average incentivized hourly wage in 2021 was $24 before benefits, the second-highest mark over the past seven years. Wages have continued to rise in 2022, with an average incentivized wage of $26.71 through November.

Gov. Beshear has now secured the best two-year period in state history for economic growth. Gov. Beshear has announced 41,237 full-time jobs and 728 private-sector new-location and expansion projects totaling, $22.89 billion in announced investments during his administration.

Gov. Beshear has also announced the two largest economic development projects in state history. In September 2021, Gov. Beshear and leaders from Ford Motor Co. and SK Innovation celebrated a transformative $5.8 billion investment that will create 5,000 jobs in Hardin County. And in April of this year, the Governor was joined by leadership at Envision AESC to announce a $2 billion investment that will create 2,000 jobs in Warren County. These announcements solidify Kentucky as the EV battery production capital of the United States.

Kentucky’s success has been noted by both S&P Global Ratings and Fitch Ratings, which have upgraded the state’s financial outlook to positive in recognition of the commonwealth’s surging economy. In addition, Site Selection magazine placed Kentucky at 6th in its annual Prosperity Cup rankings for 2022, which recognizes state-level economic success based on capital investments.

Kentucky has posted record low unemployment rates since April 2022 – the longest period in state history.

In July, the Governor reported the highest annual growth rate in 31 years. And for the second year in a row, Kentucky’s General Fund budget surplus has exceeded $1 billion. Also in July, Gov. Beshear reported that the state’s rainy day fund is up to a record balance of $2.7 billion, significantly higher than the $129 million balance the fund had when the Governor took office.

Kentucky reported August 2022 General Fund receipts hit an unprecedented high for any August on record, marking 21 straight months of growing revenues for the state.

Data from the U.S. Bureau of Labor Statistics showed Kentucky lead the entire nation in job growth for the month of August and tied with New Hampshire for the largest jump in employment growth for September.

In September, Kentucky reported August 2022 General Fund receipts hit an unprecedented high for any August on record, marking 21 straight months of growing revenues for the state. September was also the third highest revenue month on record with more than $1.4 billion reported, marking the seventh month this year with collections topping $1 billion.

And from September 2021 to September 2022, Kentucky added 81,700 new jobs. Except for a four-month recovery period after the initial COVID-19 shock, this is the largest number of new jobs added in 20 years.

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