Kentucky & Ohio Love Bourbon

According to data from the Distilled Spirits Council (DSC), whiskey was the number two spirit in terms of volume in 2020 but easily outdistanced vodka (the top volume spirit) in terms of dollars generated; $10.8 billion in sales for whiskey, compared to $6.9 billion for vodka. Out of that $10.8 billion, American whiskey sales in 2020 were worth more than $4.3 billion to distillers.

While bourbon may fall into the larger “American whiskey” category, it does have its own set of requirements that make it bourbon. On May 4, 1964, the United States Congress recognized bourbon as a “distinctive product of the United States.” The Federal Standards of Identity for Distilled Spirits (27 CFR 5) state the bourbon must meet these requirements:

Kentucky has a distinct “home field” advantage compared to other states when it comes to bourbon and it began with the settlers of the land. In the late 1700s’ Germans, Irish and Scottish immigrants settled in what would become Kentucky and found the land was perfect for growing corn and other grains. Some of them had knowledge of making whiskey and the limestone water shelf in the state proved to be perfect to aid in the distillation process. Kentucky’s water has a high pH, which promotes fermentation. The limestone adds minerals, like calcium and it filters out impurities, most importantly iron, which gives liquor a bad taste. Kentucky’s limestone water was perfect for those early distillers who developed bourbon.

95% of the world’s bourbon is made in Kentucky and 100% of the world’s tastiest bourbon comes from Kentucky

– Jimmy Carpenter

Every state in the US has at least one distillery producing whiskey and while California, New York and Washington are the top three states in terms of the number of distilleries producing spirits, there is certainly no debate as to which state produces the most bourbon. “95% of the world’s bourbon is made in Kentucky, and 100% of the world’s tastiest bourbon, comes from Kentucky,” says Vice President & General of Heidelberg Kentucky, Jimmy Carpenter. “The climate, topography, and geology of Kentucky make it the absolute best place to make bourbon.  Having four distinct seasons with very hot summers and very cold winters helps Kentucky Bourbon to mature in a way that gives it that perfect balance of sweet, rich and toasty goodness.”

There are currently more than 70 distilleries producing bourbon in Kentucky. The Kentucky Distillers’ Association, which has been an advocate for the bourbon industry since its formation in 1880, classifies its members into three tiers: Craft – 1,000 to 10,000 barrels produced, Proof – 10,001 to 49,999 barrels produced and Heritage – over 50,000 barrels. “In Kentucky, we work across the spectrum of different size distilleries,” says Kentucky General Sales Manager, Joshua Mulberry. “We work directly with three members in the ‘Heritage Tier’: Willett, Wilderness Trail and Green River. We also work with five members of the ‘Craft Tier’: Boone County, James E. Pepper, Old Pogue, Log Still and Second Sight, although some of those will be growing into the ‘Proof Tier’ shortly. There are also independent bottlers that we work with that have contracts to have whiskey produced to their specifications; some of which they can tell us who is making their product, others are top secret.”  

With all of the different distilleries producing bourbon in Kentucky and the number increasing annually, there are always new brands and suppliers to go after. With its current crop of distillers from the “Craft” to “Heritage” Tiers, Heidelberg has shown it can work with suppliers of all sizes.

“Sometimes we find distilleries and sometimes they find us,” says Joshua. “Increasingly we are being sought out as Heidelberg has developed a reputation for being a great spot for developing new producers and brands and getting those brands into the right accounts and to customers to help get brands up and running. We stay on top of trends to make sure we are helping to advise new producers with what will work and what won’t.”

In 2020, according to the DSC, 45.2% of all off-premise spirits sales in Kentucky were American whiskey, the most in the US. Ohio ranked seventh at 24.9%, so while the Buckeye State is not consuming as much whiskey as its neighbors to the south, it still is drinking its fair share.

“Bourbon hasn’t come close to its peak in Ohio,” says Heidelberg Vice President of Sales, High Proof Spirits Pat Keith. “The Ohio Division of Liquor Control is doing great things continuing to get Ohio access to bourbon that hasn’t been available here in the past. As long as the current regime is in place, I see bourbon continuing to grow. American whiskey (non-bourbon) and rye whiskey are close to their peak, as the Ohio consumer seems to gravitate more and more to Bourbon.” According to the Ohio Division of Liquor Control American Whiskey sales (bourbon, rye, rye malt, malt, wheat, Tennessee and corn) in 2020 in the state of Ohio jumped 17% to $353.5 million.  

Since Ohio is a “control state,” when it comes to distribution of high proof spirits, there is a bit of a lengthier process involved to work with a supplier to help bring their product to the market. “It really is a multiple step process once a relationship has been started with a potential supplier,” says Pat. “Some will reach out to us and I reach out to suppliers/distilleries that I feel have a great shot at being listed in Ohio and becoming a successful craft brand here. But everything moving forward hinges on the Ohio Division of Liquor Control approving the items they have submitted for sale in the state getting approval.”  

The growth of American Whiskey, in particular bourbon is not a unique occurrence over the last few years. According to the DSC, whiskey sales have doubled in the US from just over 13 million 9 liter cases in 2002 to over 26 million cases in 2020. Jimmy thinks that the rest of the country is catching up to what Kentucky has always known. “Kentucky has always had a healthy thirst for bourbon,” he says. “Going back several decades, bourbon has been the #1 spirit in Kentucky over vodka, rum, tequila and the other categories, both in value and in volume.  What has changed over the last decade or so is the desire for higher end bourbons.  Even as scarcity has driven the price up, the Kentucky consumer has continued to make bourbon their go-to spirit of choice.”