Canadian Manufacturing

Keep pouring: American whiskey makers toast booming sales

Distillers of bourbon and rye are calling for another round as growing exports continue to fuel good times in Kentucky and Tennessee


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Combined sales of bourbon Tennessee whiskey and rye climbed 8.1 per cent last year. PHOTO: Felix Stember/Wikimedia

LOUISVILLE, Ky.—American whiskey makers toasted another round of robust sales in 2017, stirred increasingly by consumers’ thirst for the priciest spirits—mixed in cocktails or sipped straight up.

Demand grew in the U.S. and overseas as the distilled spirits industry gained market share in the crowded domestic adult beverage sector, the Distilled Spirits Council said Feb. 1.

Combined U.S. revenues for bourbon, Tennessee whiskey and rye whiskey rose 8.1 per cent, or $252 million, to $3.4 billion in 2017, the distilled spirits trade group said in a report released in New York. Domestic volumes rose 6.4 per cent to nearly 23.2 million cases.

In another shot of good news for the industry, super-premium whiskeys had the biggest volume surge among American whiskeys. Volumes rose 18.3 per cent, while revenues were up 18 per cent. Those whiskeys typically age the longest and fetch the highest prices.

“The higher priced the product, the faster the sales, virtually across the categories,” said Frank Coleman, a spokesman for the distilled spirits trade group.

The growing popularity of top-end whiskies coincides with another trend—consumers becoming more knowledgeable about the products they sip, said New York City bartender Charles Hardwick.

“Just last week I was stunned to have a guest ask me what whiskies I had from the Buffalo Trace Distillery (in Kentucky) after he stared at my back bar intently for several minutes,” he said. “I find I no longer have to explain the difference between bourbon and rye to people, and they frequently ask what bourbon is in our well from a much more informed perspective.”

One rung down, the high-end premium category for bourbon, Tennessee whiskey and rye whiskey had volume growth of 5.9 per cent. Its revenues rose 7.2 per cent.

“With the economy strong and consumer confidence high, shoppers are treating themselves to our sector’s pricier products,” said David Ozgo, chief economist for the distilled spirits group.

At the other end of the price spectrum, volumes were up just 1.4 per cent in the value category and revenues increased 3 per cent.

Rye whiskey is a small portion of the American whiskey category, but its volumes surged 16.2 per cent last year to 900,000 cases, the report said. The growth was driven by rye’s popularity in cocktails.

Vodka, the distilled spirits sector’s largest category and representing one-third of all volume, had another solid year with U.S. volumes up 2.2 per cent and revenues up 3 per cent to $6.2 billion, the report said. Tequila revenues increased 9.9 per cent to $2.7 billion.

Meanwhile, 2017 export revenues for bourbon, Tennessee whiskey and rye whiskey products are projected to reach $1.1 billion, fueled by favourable exchange rates and demand for premium American spirits, the council said. That would be the fifth time in six years that American whiskey exports topped $1 billion. Last year’s total fell just short.

The top five growth markets by dollar value for American distilled spirits were the United Kingdom, Germany, Brazil, France and Spain, it said.

Kentucky is home to about 95 per cent of the world’s bourbon production, with such brands as Jim Beam, Evan Williams, Wild Turkey, Maker’s Mark, Woodford Reserve and Four Roses.

There are now 39 companies operating 52 distilleries making 6.8 million barrels of aging bourbon in the state, the Kentucky Distillers’ Association said. The industry is in the midst of a $1.2 billion building boom.


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