Production

USA Whiskey Today

A lowdown on the state of the industry
By Liza Weisstuch
There was mutiny last summer when Maker’s Mark announced that they would lower the proof of the bourbon. Beam Global, which owns the iconic brand, revealed that they were running short on stock, and to maintain the supply, they would cut the product from 45% ABV to 42% ABV.

The plan got scrapped in the end, as Maker’s drinkers pronounced it unacceptable. Meantime, many wondered if it was all merely a public relations stunt. But this is just one example that demonstrates just how hot of a commodity American whiskey has become.

Where once bourbon was relegated to the bottom shelf of the whisky aisle and considered the domain of cowboys and farmers, it currently appears on the shelves in posh bars right next to prized single malts. In fact, in the past five years, a number of lively bars have opened in trend-setting areas, like Brooklyn and San Francisco, dedicated exclusively to American whiskey. An increasing number of brands are releasing limited edition bottlings. Allocation has become common. Cult followings have developed around a few costly whiskies, making them harder to find than the Loch Ness Monster.

According to the Distilled Spirits Council of the United States, a trade organization, over 18 million 9 litre cases of bourbon and Tennessee whiskey were sold in the US in 2013, generating over $2.4 billion in revenue for distillers. Super-premium spirits led the march, growing 87% by volume from 2003 to 2013 and 104% in revenue in that time.

Many chalk up the change to the increased marketing of high-end spirits. Then there’s the cocktail renaissance. Whiskey-based vintage drinks, long trendy in rarified hipster circles, jumped the shark to the mainstream in the past few years. The phenomenon is often called the “Mad Men effect,” after the television show set in an ad firm in the 1960s.

With this explosive popularity, many are starting to wonder: where do we go from here? Well, the simple answer is: more bourbon. Companies that once sourced spirit from elsewhere are using facilities of their own, like Kentucky Bourbon Distillers, which restored Willet distillery, a long mothballed family property. Michter’s has a new home base in the middle of Louisville. And in June, Diageo announced that it would invest $115 million to construct a new distillery in Kentucky. And that’s just to name a few.

Not surprisingly, Kentucky’s whiskey tourism has boomed, prompting a number of long-standing companies to lay out vast sums to construct modern shiny new visitors’ centers.

Many wonder how far the flavoured whiskey fad will go, a trend that got off the ground with Red Stag, a cherry-flavored brand Jim Beam that was designed, largely to appeal to women. In the years since, Wild Turkey offered American Honey, Knob Creek introduced Smoked Maple Bourbon and loads of small distilleries got creative with experimental releases. But many industry insiders ask why bother? Why flout authenticity?

But perhaps the biggest source of curiosity—and suspense— is what will happen to the craft distilling industry. Eight years ago there were a few dozen small scale distilleries around the country. Today there is at least one in every state, and over a dozen in a few of them. Some of them source the juice, then age it at their own distillery, and thanks to a crinkle in the TTB’s regulations, they can note on the label that the product is “produced at” their own distilleries. But the few operations making their own grain-to-glass product are wondering not if, but when the emperor will be called out for his trickery. Only time will tell.