Barrels & Bourbon: Charting Kentucky's Distillery Boom
The Kentucky Distillers’ Association (KDA) has released their 2024 report “The Economic and Fiscal Impacts of the Distilling Industry in Kentucky.” We eagerly await this report as it only comes out once every two years. To save you from reading the 93 page report, I summarized the key takeaways we thought you would be most interested in and of course added our spin. If you need some light reading, you can find the full report here.
If you want the TL;DR version, here it is:
Kentucky's distilling industry is booming, with a notable rise in both distilleries and barrels. This growth, spotlighted in the latest industry report, is shaping the future of the used barrel market, promising an uptick in supply and variety. As we navigate this expansion, Midwest Barrel Co. echoes the call for sustainable white oak reforestation, ensuring our industry's legacy thrives.
Here are our more comprehensive thoughts:
As the backbone of America's bourbon and spirits production, Kentucky's distilling landscape has evolved dramatically, signaling a ripple effect across the used barrel market. Our key takeaways:
Despite Kentucky's distilleries producing a record number of barrels, only a fraction of their spirits are purchased within the state. Meaning, the global impact of Kentucky bourbon is significant. This global reach, especially the rebound in whiskey exports post-E.U. tariff suspensions, underlines the domestic and international demand driving production.
The record production and inventory levels suggest a future increase in the supply of used barrels. This impact will be positively felt for craft beer and international distilling operations in need of once used, freshly emptied bourbon barrels.
The explosion in Kentucky bourbon tourism and distillery visits post-COVID reflects a surging interest in bourbon culture, directly impacting the demand for barrels — both new and used.
The shift towards premium bourbons, aged between four and ten years, might affect the availability and pricing of used barrels, as longer aging periods reduce turnover rates.
With Kentucky's distillery count rising from 19 to 100 since 2009 and 13.3 million barrels currently aging, there has been a significant boost in barrel production. This expansion points to an increased future supply of used barrels, which is expected to positively influence markets that utilize them for aging other spirits.
Craft Distillery Boom
The national rise of craft distilleries mirrors the craft beer movement of the last decade, diversifying the demand for barrels and possibly influencing the types and qualities of barrels in demand.
As craft distilleries proliferate, the variety of barrels needed — differing in size, wood type, and char level — could broaden, offering new opportunities for innovative flavor profiles impacted by their cask choice.
Sustainability and Innovation
The ample supply of used barrels presents a unique opportunity for sustainable practices and innovative uses beyond the spirits industry, including furniture, decor, and even aging other beverages.
The rapid expansion of the bourbon industry underscores the critical need for white oak reforestation. With a maturation period of 90 years for white oak trees, and each tree yielding one to three new 53-gallon bourbon barrels, it's essential to balance bourbon's growth with sustainable practices to preserve the essential resource it relies upon. If you’re interested in partnering with Midwest Barrel Co. on white oak reforestation initiatives please contact us here to learn about our partnership with the Arbor Day Foundation.
To wrap things up, Kentucky bourbon is booming. This report peels back the curtain on a dynamic industry at a pivotal growth juncture. Midwest Barrel Co.’s commitment to innovation, sustainability, and the promotion of white oak reforestation mirrors the industry's trajectory—forward-thinking and grounded in responsible stewardship. Our efforts in white oak reforestation highlight our proactive stance in preserving the resources our industry relies on. As we navigate this exciting era, we invite you to join us in shaping a sustainable, vibrant future for bourbon and barrels, making every sip and every barrel count toward a legacy that lasts.
Jess Loseke & the Midwest Barrel Co. Team