Bourbon brings more than $10bn to Kentucky
The Bourbon sector generates US$10.6 billion for Kentucky’s economy annually and supports nearly 24,000 jobs, a new report has revealed.
The figure comes from the eighth edition of The Kentucky Distillers’ Association (KDA) biannual economic impact report, The Economic and Fiscal Impacts of Kentucky’s Distilled Spirits Industry, 2024-2025.
In its previous report, released in February 2024, the KDA found that Kentucky Bourbon generated $9bn for the economy.
KDA president Eric Gregory said: “This comprehensive analysis demonstrates the economic impact of Kentucky’s homegrown and historic Bourbon industry, which remains significantly ahead in jobs, investment and stature from over a decade ago.
“Bourbon is a long-term business, and the data shows that its Kentucky foundation remains strong. But we also must remember that its future isn’t guaranteed and this data is a snapshot in time.
“Together, these reports provide a clear, long-term record of Kentucky Bourbon’s growth as a signature industry and the policy challenges that determine its future.
“Kentucky Bourbon has been around for more than 200 years and has overcome its fair share of challenges. By working together, and with the sacred name of Kentucky on every bottle, we must ensure the next report is a toast to progress.”
The Bourbon sector supports 23,935 jobs and US$2 billion in salaries, wages and benefits. The number of jobs is up by more than 800 compared with two years ago.
The KDA noted this increase comes in spite of headwinds in the industry that have resulted in distilleries pausing production and cutting jobs in the past year, such as Jim Beam.
In terms of the whole of the US, Kentucky leads the distilling scene, holding 27% of both spirits output and employment. This was ahead of Tennessee, which placed second with 8.4% share.
The report also revealed the impact of Bourbon on agriculture. Of the 27.3m corn bushels purchased annually in the US, 84% come from Kentucky farmers. This is up from 70% in the previous report.
Gregory stressed the need for continued support: “We need the support of elected officials at every level of government to help create a stable, competitive environment so Bourbon can produce more American jobs, satisfy the global thirst for our signature spirit and continue to invest in our Kentucky home.”
All-time highs
There are now more licensed distilleries in operation in Kentucky than ever before (125). The number of ageing Bourbon barrels is also at an all-time high: 16.1bn.
The 125 distilleries are owned and operated by 104 companies in 45 of Kentucky’s 120 counties.
Kentucky senate president Robert Stivers pointed to the benefit the broadening geographical impact has on rural communities: “There are now distilleries from Pikeville to Paducah and from Augusta to Adairville. Forty-five Kentucky counties now have at least one distillery, with one developing in my home county of Clay.
“That’s a number far beyond the industry’s traditional core counties where these operations are bringing commerce, tourism and vibrancy to their communities while attracting additional development like restaurants, lodging and retail.”
Last week, the Kentucky Bourbon Trail added 10 distillery experiences and satellite tasting room locations to the now 68-stop route.
The trail is said to welcome more than 2.5m visitors each year. In 2024, it reached a record high of 2.7m.
Over the next five years, KDA members will invest US$1.45bn into the sector.
Taxes
Kentucky Bourbon generates US$372 million in local and state tax revenue every year. This is an increase of $200m over the past 10 years, the report found.
Kentucky’s spirits taxes have soared by 163% in the past five years. The state paid US$75m on ageing barrel taxes in 2025, according to the report.
State governor Andy Beshear added: “Despite national challenges from tariffs and harmful federal policies, Kentucky’s US$10.6bn Bourbon industry continues to show the world its importance by supporting nearly 24,000 jobs and generating a record US$372m in local and state tax revenue.
“This industry is essential to our success and way of life and, as governor, I’m going to keep standing up for Kentucky Bourbon and the hardworking people who make it so special.”
The Kentucky General Assembly passed a gradual tax relief on duty paid on barrels in 2023. This will come into effect in 2026 and will see distilleries get a tax reduction of 4%.
Kentucky house speaker David Osborne said Bourbon’s future success will “run through the General Assembly”. He explained: “It should surprise no one that legislative action to modernise our Commonwealth’s alcohol laws, advance responsibility measures and reform taxes to create parity all charted the path for Kentucky Bourbon’s growth the past decade.”
“Now Bourbon attracts tourists by the millions, contributes abundantly to our workforce and tax base and makes Kentucky an envy of other states and nations across the globe.”
Kentucky house speaker pro tempore, David Meade, added: “The kind of prosperity and broad impact in this comprehensive study clearly demonstrates what happens when elected leaders pass pro-business policies to unburden a signature industry from outdated and cumbersome policies and punishing taxes.”
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