How Kentucky Bourbons Go From Boom to Buck

Like American Apple Pie, Kentucky bourbon flourished after the end of the last Great Depression. But as the economy weakens, after the pandemic – with the imminent arrival of multiple trade wars, the market may be drying up.

Although whiskey, traditionally made of corn, has ageed in charred oak barrels, its roots have gone back to the 18th century, but it did not become the iconic American until 1964, when Congress passed a law declaring it “a unique product of America.”

But drinking trends come and go, and by the end of the 20th century, bourbon was considered a bit old-fashioned-pun.

“You often see this generational change in what people don’t want to drink what their parents drink,” said Marten Lodewijks, U.S. president of IWSR, which collects alcoholic beverage data and provides industry analysis.

Then, as the world recovered from the 2008 recession, drinkers seemed to rediscover this classic spirit for several different reasons.

For beginners, the price is good, which makes it attractive for bar managers to buy and sample them into cocktails and young drinkers. Then, in 2013, Kentucky passed a law that made it easier for companies to buy and resell vintage bottles, opening a high-end collection market. In addition, the mid-century nostalgia was fueled by performances like crazy men, and bourbon will be in a mature Renaissance.

Bourbon grew 7% globally between 2011 and 2020, more than triple the industry’s growth in a decade, according to industry data company ISWR.

Soon, some bourbon distillers became accurate, and people started buying bourbon bottles that didn’t drink, but instead as an investment.

“Everyone is crazy in the Bourbon market, treating goods like stocks,” recalls Robin Wynne, general manager and beverage director of Miss Toronto, Canada, who has been serving as a bar manager for about 25 years.

“People will come in as prospectors and flip the bottles at two to three times the value.”

But like most market bubbles, this bubble is bound to burst. The pandemic locked bar sales, inflation has made many possible bourbon drinkers choose cheaper options – or give up drinking. In Gen-Z, many in their 20s Drink less Elderly siblings and parents have done it at their age.

These factors have led to a decrease in alcohol sales, with bourbon sales particularly slowing by 2% between 2021 and 2024, according to ISWR data.

President Donald Trump’s global tariffs are the last straw. The EU announced retaliatory tariffs on U.S. goods, including Kentucky bourbon and California wine, although implementation has been delayed for six months.

Meanwhile, most Canadian provinces have stopped importing U.S. alcoholic beverages for retaliation. The country accounts for about 10% of Kentucky’s $9 billion (£6.7 billion) whiskey and bourbon business.

“It’s worse than the tariff because it’s actually taking your sales away, removing our products completely from the shelves… It’s a very disproportionate response,” Brown-Forman CEO Lawson Whiting said in March when announcing plans to stop buying our Booze in the Canadian province, which announced in March that the company announced in March that Jack Daniels, Woodford Reserves and Old Forester said.

Trump said tariffs would raise U.S.-made businesses.

But Republican Senator Rand Paul, who represents Kentucky, said the tariffs would harm local businesses and consumers in his state.

“Tariffs are taxes, and when you tax businesses, it always passes as a cost. So the price will be higher,” he told ABC in May.

These economic pressures have caused an increasing list of casualties.

The Liquor Giant Empire reported that sales at distillery in Kentucky produced bourbon, rye and whiskey, down 7.3% in the fiscal year.

Wild Turkey – Kentucky bourbon owned by Campari – has seen sales drop 8.1% over the past six months.

While large international brands are likely to be able to survive the storm, the sales blow has led to an increasing list of casualties.

In July, LMD Holdings filed for Chapter 11 bankruptcy – just one month after the opening of the Luca Mariano winery in Danville, Kentucky.

This spring, the Gallard County distillery entered the takeover.

In January, Jack Daniel’s parent company closed a barrel factory in Kentucky.

Mr Lodewijks warned that the bottom of the barrel had not yet reached.

“I would be very surprised if there were no more bankruptcies and more mergers,” he said.

In some ways, bourbon has become a victim of its own success – the growth in bourbon sales, as well as the growth in premium markets, has helped fuel many small distillery. Since bourbon has to age in barrels for many years, the market on today’s market was predicted a few years ago, which means there is currently an oversupply, which is lowering prices.

But while these economic situations are grim, Mr. Lordejx said history shows that difficult times can create innovation. Scotch whiskey used to be simple, blending in the middle of the road. But when sales fell in the second part of the 20th century, the still began to age over-dose bottles, which helped create the market we now offer for quality scotch whiskey.

In Canada, bourbon imports have slowed to drip, and local distillers have begun trying to use bourbon methods to give Canadian whiskey a similar flavor.

“The tariff war has really laid a positive attitude for Canadian spiritual business,” Mr Wyenen said.

“We have a lot of grains to make these whiskeys without having to rely on states.”