Spirits firms invest US$200m in Kentucky

In 2016 the spirits industry invested almost US$200 million in Kentucky through new locations and expansions, new data has revealed.

This year the spirits industry invested almost US$200 million in Kentucky

Information recorded by the Kentucky Cabinet for Economic Development in the New and Expanding Industries Report revealed that 12 companies spanning distilleries, coopers and multinational groups spent US$177m on “economic development”.

The report is compiled from data provided by companies, local and industrial development contacts, newspaper announcements, and Cabinet programmes designed to “locate and retain industry”.

At US$35m, the largest investment comes from Luxco Inc., which is currently constructing its new distillery, named Lux Row Distillers. The Rebel Yell, Ezra Brooks and Blood Oath Bourbon owner broke ground in May this year, with the distillery on-track for completion in the fourth quarter of 2017.

Evan Williams maker Heaven Hill came in a close second, investing US$30m in the opening of a vast new warehousing complex and expansion at Bernheim Distillery in Louisville, while Woodford Reserve Distillery came in third, spending US$22m.

In the wider remit of the industry, East Bernstadt Cooperage invested US$20.3m, while the Independent Stave Company spent US$18m; expanding production to address the running shortage of barrels in the whiskey industry.

Sazerac Distilleries Inc. demonstrated an aggressive acquisition streak in 2016 – notably acquiring Southern Comfort from Brown-Forman for US$542m earlier this year – and also investing US$15.3m developing in Kentucky which is home to its Barton 1792 Distillery and A. Smith Bowman Distillery.

The firm is set to plough US$200m into its Buffalo Trace Distillery in phased investments over the next seven years – spending US$6.5m in 2016 as the producer struggles to meet soaring demand.

Other big spenders include craft distillery, New Riff Distilling, which invested US$12.5m, and Beam Suntory, which spent US$10.3m – last month opening its first new rackhouse in Frankfort since 1968; the largest that can currently be built under current Kentucky state law.

At the same time, Beam Suntory announced plans to invest more than US$1bn in Kentucky Bourbon production over the next five years.

Start-up distillery Patriot Brands also made the list, constructing a US$5m distillery, visitors center and history park in Henry County, while Gruppo Campari-owned Wild Turkey Distillery invested US$1.9m.

With US$1.2m, James E Pepper Distilling Company rounded off the list – in May The Georgetown Trading Co. revealed plans to rebuild the historic distillery, which was mothballed in 1958.