The number of barrels of bourbon in Kentucky hit a record 11.4 million earlier this year, according to the Kentucky Distillers Association (KDA), a non-profit trade association.
It comes as the state’s distillation industry marked its fourth consecutive year of filling more than two million barrels.
Including other aging spirits, the state’s total inventory is now nearly 12 million barrels.
Kentucky bourbon has experienced phenomenal growth since the turn of the century. Production has skyrocketed 475% since 1999, according to KDA research. The state’s aging bourbon inventory has more than tripled during this time, while the assessed value of all barrels is now $5.2 billion, an increase of $780 million from 2021.
The new production numbers are based on reported inventory as of January 1, 2022, submitted to the Kentucky Department of Revenue for tax purposes. Figures include all Kentucky distilleries:
- Total barrels of bourbon: 11,406,135
- Number of bourbon casks filled in 2021: 2,619,633
- Total inventory including bourbon and other spirits: 11,982,965
- Assessed value of all barrels for tax purposes: $5,207,221,744
The Bluegrass State continues to benefit from this brown spirits boom. The movement now injects $9 billion annually into the Kentucky economy, supports more than 22,500 jobs with an annual payroll exceeding $1.2 billion per year, and attracts millions of tourists from around the world to the experiences of the Kentucky Bourbon Trail.
However, the number of Kentucky distilleries has not matched this growth. Year-to-date, Kentucky has fallen to 12th in the nation for the number of distillation operations, according to federal statistics from the Tax & Trade Bureau (TTB). Today there are more than 2,300 distilleries in all 50 states. Kentucky has less than 100.
Over the past year, Kentucky ranked 29th in the nation for the rate of adding new distilleries.
Kentucky’s share of distilleries nationwide has fallen from a high of 24% to just 6%, according to the KDA. Kentucky’s percentage of distilling jobs has dropped from 43% to just 30%, even though the state makes 95% of the world’s bourbon.
State industry officials point out that Kentucky’s taxes are holding back growth. To fill those two million barrels, distilleries paid $40 million in discriminatory barrel taxes, the highest amount in history. The assessed value of all barrels in the state also hit a record high this year of $5.2 billion.
“We are thrilled that our local and historic industry continues to thrive, but these numbers could have been much higher if Kentucky did not have a major barrier to entry for new distilleries in the form of this barrel tax. “, says Eric Gregory, president of the KDA. “We are only asking to be treated like every other manufacturer in Kentucky – and perhaps the world – whose products are not taxed during the production process. Barrel taxes stifle growth, penalize success, and compromise the state’s ability to attract new distillers to the birthplace of bourbon.
“Now is the time for solutions. We must protect our dominance from distillation. The future is in our hands,” he adds. “It is essential that distillers, community partners and elected officials work together to attract more distillers and investment to the Commonwealth, because there will come a day – hopefully not in our lifetime – when bourbon will not be as popular as it is right now.”