Distillery investments top $1B in six years

Bailey Loosemore

Announcements for new and expanding distilleries in Kentucky have become so frequent they've started to sound routine.

An overview of the distilling area at the Jeptha Creed distillery in Shelbyville that was opened on Nov. 11. Dec. 7, 2016

Forty million dollars for more warehouses? All right. Eight million dollars for a bottling line? Sounds cool. More than $100 million for a completely new campus? Wait, maybe there's something here.

Since 2010, the Kentucky Cabinet for Economic Development has announced 77 spirits-related investments at a rate of more than one per month. Combined, the projects total more than $1 billion expected to be spent on the booming industry — with many distilleries already looking toward future expansions.

The announcements are on their way to surpassing an estimate put forth by the University of Louisville's Urban Studies Institute in 2014, which suggested that $1.3 billion would be invested in the state's industry between 2008 and 2018.

Kentucky Distiller's Association president Eric Gregory said the institute will release an updated study in early 2017, and he expects the estimates to rise.

That's a good thing, he said, because if the growth slacks, Kentucky could risk falling further behind the total number of distilleries in other states. It could even, possibly, produce less than 95 percent of the world's bourbon.


As of November, Kentucky ranked 10th in the nation for its total number of distilleries, according to a list from the Alcohol and Tobacco Tax and Trade Bureau.

With its 63 facilities, the state has less than a third of the 284 distilleries and bottling plants that call California home and less than half of the 149 in New York — another large whiskey hub.

The state also ranks ninth in terms of distilleries per capita, with a rate of 14.3 facilities per one million residents.

Bourbon production in the Bluegrass State, of course, still blows other states out of the water. But what happens in 10 years if a handful of distilleries in another region take off, Gregory said.

"Suddenly, 95 percent drops and we're losing jobs and investment and identity to other states," he said.

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Industry veterans say Kentucky's Senate Bill 11, which took effect in July, will encourage growth by allowing distilleries to serve drinks by the glass and to sell more bottles on-site. But they acknowledge that the state is still not as business-friendly as others.

Other states "did a lot of things like pass legislation and cut through bureaucratic red tape and said we want distilleries to come here," Gregory said. "... What we're cautioning in Kentucky is we can't be complacent."


Any distiller in Kentucky will say there's no room in this state for complacency.

Heritage companies such as Brown-Forman and Heaven Hill wouldn't have lasted a century riding the curtails of "good enough." And new distilleries wouldn't make it a day by sacrificing innovation and quality.

"We're not after capitalizing on the boom of the industry," said Shane Baker, co-owner of Wilderness Trail Distillery in Danville. "We're trying to be around for the next 100 years."

Wilderness Trail, Jeptha Creed and Copper & Kings are just a few of the 14 new distilleries that have been announced by the cabinet since 2010, accounting for about $277 million of the billion-dollar total investments.

All three are owned by one or two families, tipping their hats to the days when hundreds of family-run distilleries dotted the state.

"I just think it's great that so many people are interested in getting into spirits, in getting into that old heritage that we really do have," said Joyce Nethery, co-owner of Jeptha Creed in Shelbyville. "Being able to distill spirits on a really small scale."

But unlike the 1800s, when anyone could produce spirits from their farm, the industry is quite a bit harder to get into today.

Building a distillery takes time and money, and owners often won't see generous returns until years after their facilities open.

"Generally speaking, if you're going to make a product, try to get it into distribution, you're talking about a couple million dollars," said Kevin Hall, who helps run distilling classes at Moonshine University in Louisville. "We have a lot of people come through that are like, 'I have $300,000, can I do it?' And you're like, 'that's a good way to lose $300,000.' "

Baker and his business partner Pat Heist spent 10 years operating a business that supported distilleries before they could fund a facility of their own.

"For me, personally, as weird as it sounds, distilling has put food on my table most of my life," said Baker, a third-generation distiller. "... It was always in the back of my mind that it's something in our blood."


Maker's Mark Chairman Emeritus Bill Samuels Jr. once told his son that when he first entered the business, he saw several struggling distilleries knock down warehouses – preferring to get rid of the buildings instead of pay for them to sit empty.

The idea seems mad 40 years later, as distilleries statewide construct rickhouses on a never-ending loop.

It's what they have to do, said Denny Potter, master distiller at Heaven Hill.

"Even though it seems very aggressive, it's a very controlled growth," Potter said. "It's just the right way to invest without being too risky."

Distillers who commented for this article said companies employ teams that study their brands' sales and predict how much product will be needed in five, 10 or 20 years.

That information is shared with decision makers, who can then plan the warehouse and distillery expansions.

"We use experience from around the globe in terms of forecasting sales and demographics," said Pauline Rooney, vice-president of distillation and maturation for Diageo North America. "We can say what we think the market will look like five, 10 years down the road."

Outside of production, distilleries statewide are also improving their tourism experiences by building visitor centers, event spaces and tasting rooms meant to draw customers in for the day, instead of a couple hours.

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The developments helped bring more than 750,000 people to the Kentucky Bourbon Trail in 2015, a 22-percent increase over the previous year.

"Continued growth has a lot to do with heritage and authenticity of what we have," said Kevin Smith, vice president of Kentucky Beam bourbon affairs for Beam Suntory. "... The Kentucky Bourbon Trail has been a great tool to help share that history, too. It's tapped into the heartbeat of bourbon and whiskey aficionados."

Bourbon production in Kentucky is still not as high as it was before Prohibition, but with the many investments, it's getting closer.

In 2014, KDA numbers showed bourbon production reached its highest mark since 1970, with 1.3 million barrels filled.

The production numbers tell Hall of Moonshine University that Kentucky's designation as the bourbon capital won't go to another state anytime soon, despite its rank lower on the list.

"All the big bourbon distilleries make really good whiskey," Hall said. "There's no room for anyone to come in and out bourbon them, so they're going to have to compete in a different space."

Reach reporter Bailey Loosemore at 502-582-4646 or


  • 77 distillery investments totaling about $1.04 billion were reported to the Cabinet for Economic Development between January 2010 and October 2016.
  • The investments were announced by 33 companies and estimated the eventual addition of 1,067 employees total.
  • 17 new spirits-related facilities were announced in the past six years, totaling more than $300 million in investments.
  • Compared to other states, Kentucky ranks 10th in the nation for its total number of distilleries and bottling plants. The Bluegrass State is home to 63 facilities, while 284 are located in California - the top state. 
  • Per capita, Kentucky ranks ninth when it comes to the number of distilleries per one million residents. The state's rate is 14.3 distilleries, while California's is 7.3 distilleries.

Sources: Kentucky Cabinet for Economic Development, Alcohol and Tobacco Tax and Trade Bureau, American FactFinder


Between January 2010 and October 2016

  • Diageo Americas Supply - 1 investment totaling $115,000,000
  • Beam Suntory - 11 investments totaling $109,290,000
  • Wild Turkey Distillery - 6 investments totaling $106,792,450
  • Maker’s Mark - 6 investments totaling $97,071,612
  • Heaven Hill - 8 investments totaling $89,599,351
  • Sazerac - 5 investments totaling $84,953,180
  • Woodford Reserve - 4 investments totaling $66,675,000
  • Brown-Forman - 3 investments totaling $66,000,000
  • Four Roses - 4 investments totaling $63,880,000
  • Luxco Inc. - 1 investment totaling $35,000,000