All September on VinePair, we’re turning our focus to America’s spirit: bourbon. For our third annual Bourbon Month, we’re exploring the industry legends and innovators, our favorite craft distilleries, new bottles we love, and more.
Ninety-five percent. The amount of bourbon made in Kentucky is an easy enough number to come by with a simple Google search.
At least that’s the figure you’ll come across when reading any article published during the last decade that briefly touches on the health of the bourbon industry in America, and the Bluegrass State in particular.
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That the data point has been so regularly regurgitated has surely only bolstered its proliferation over time, and caused the 95 percent figure to be generally accepted as fact. Yet, when one stops to consider certain variables, the veracity of this number starts to seem unlikely.
The first red flag arrives in the form of the statistic having been published unchanged for more than a decade, despite drastic changes in the distilling landscape within the state in that time.
In the Kentucky Distillers’ Association’s (KDA) 2009 Economic Impact Report, for example, the trade organization reports: “Kentucky is known internationally for its bourbon whiskey. The state produces and ages perhaps 95 percent of all the bourbon in the world.” Ten years later, in the 2019 report, the KDA strikes a more assured tone, noting, “Kentucky continues to produce 95 percent of the world’s bourbon.”
Within the 64-page document, the organization also mentions that the number of distilleries in the state increased from 19 in 2009 to 68 in 2019. Meanwhile, information on the KDA’s website suggests Kentucky bourbon production has skyrocketed 360 percent since 2000. Are we to rightfully assume that distilleries outside the state kept up with this exact pace over that period, pegging Kentucky’s share to an unchanged 95 percent?
Outside Kentucky, more questions arise in the form of industrial-scale contract distilleries (namely Midwest Grain Products of Indiana, or MGP) and the influence of craft distillers from around the country. All of which begs the question: How much of the world’s supply of bourbon is actually made in Kentucky?
Contrary to the opening statement of this article, the answer to that question is not easy to determine, though we can try. But first, a few words on the genesis of the claim.
The KDA seems to be one of the greatest cheerleaders for the 95 percent stat — and why wouldn’t it be? — mentioning it in each of its economic reports and in multiple pages on its website. Yet nowhere does the organization list a data source for the figure.
Others who have previously approached this topic in opinion pieces have claimed that the KDA’s president, Eric Gregory, has openly admitted to conjuring the number from thin air. Gregory is someone I’ve had good dealings with during reporting for past articles, but I was unable to reach him for this topic. That’s not to suggest he avoided my emails, however, nor do I buy into the 95 percent figure being his creation. The statistic appears in articles dating back to 2003, yet Gregory didn’t take up his post at the KDA until 2008 (according to his LinkedIn page). Prior to that his background was in journalism and public affairs.
The source of the claim will therefore have to remain a mystery, which is fine, because we have larger knots to untangle. Our first port of call arrives in clarifying how we define 95 percent of the world’s “supply” of bourbon — are we talking annual production or sales?
Since the TTB has long stopped taxing bourbon as it enters the barrel, and now only collects its dues when bottles leave a distillery, sales seem like the easier route of the two. Otherwise, we’d be reliant on each of the nation’s bourbon distilleries openly sharing that information, which enters a whole new galaxy of unlikelihood.
Indeed, the TTB would be a fantastic source for getting to the bottom of this mystery, as it would have access to the federal taxes paid by all producers and could surely break those numbers down on a state-by-state level. But alas, after three unanswered emails, I’m led to believe that the agency currently has bigger fish to fry. So we’ll have to rely on good ol’ off-premise sales figures to paint as accurate a picture as possible. And on this front, things start to get interesting.
For assistance, I reached out to Dave Williams of Bump Williams Consulting, who was able to provide some numbers based on Nielsen data. He opted for volume sales instead of value (given that we’re exploring supply) and viewed the figures for 2020, providing the most up-to-date calendar year account.
According to these parameters, the top 14 brand families (not distilleries) of straight bourbon represent a cumulative 79.9-percent share of volume sales. All of those “families” are based in Kentucky, meaning that we come fairly close to the 95 percent figure with a little over a dozen labels. So what about the other 20.1 percent?
Williams mentioned that, had he continued to tally the results from brand family number 15 onward, he was confident we’d arrive close to, or even at the magic number with Kentucky-based brands. The difficulty in doing so, however, arises from there being so many other brands to look at and their shares rapidly approaching close to negligible. The Nielsen data also doesn’t include origin, so this variable needs to be manually attributed, which is another incredibly labor- intensive process.
To provide further context on the negligibility of brand families 15 onward, the Kentucky-based number 14 held just a 1.2 percent share of volume sales. Meanwhile, three of the most notable non-Kentucky producers (based in Washington, Texas, and New York) each accounted for a 0.1 percent share of volume sales or less. When Williams tallied 15 of the most significant non-Kentucky brands, their combined volume sales share totaled just 0.3 percent.
With many household-name Kentucky bourbons unaccounted for in the top 14, and the best-known non-Kentucky bourbons making up such a small share combined, this would appear to cancel out the influence of non-Kentucky craft brands on the final percentage.
Still, I had one nagging doubt: Many Kentucky-based brands buy their bourbon from (or have it contract distilled at) Indiana’s MGP distillery. How many of these producers were lurking in the dataset and skewing the percentages because their stated origin appears to be Kentucky but their spirits were actually produced in Indiana?
Answering this question raises even more issues because MGP does not publicly list its clients due to confidentiality agreements. (It goes without saying why a “Kentucky” bourbon brand might want to avoid sharing that its bourbon was actually distilled across state lines in Indiana.) But we can try and paint a vague picture based on more data from Williams and anecdotal evidence.
In a mid-2018 interview with NBC News, MGP CEO Gus Griffin claimed his company supplies “over a million cases of bourbon a year to the industry.” Given that we’re taking him on his word alone, we can simplify things slightly by rounding this figure down to 1 million cases, and gauge what proportion of the bourbon market that equates to.
In Nielsen-tracked off-premise channels for 2017 — the closest complete year to Griffin’s claims — straight bourbon sales totaled around 6.5 million cases. However, this figure comes with a huge asterisk, as it doesn’t capture any data from control states, independent liquor stores, or on-premise sales, Williams explains.
“Let’s assume that we are picking up 50 percent of total spirits/straight bourbon sales, which is a generous assumption,” Williams writes via email. “That would put total case sales at [around] 13 million.” Based on this number, the alleged MGP-produced volume of 1 million cases equates to 7.6 percent of total bourbon sales. Yet, this figure could also come with its own caveat, Williams adds. “My guess is that that 1 million [MGP] number also includes some rye bourbon and possibly some other variants which would not fall under the ‘straight bourbon’ whiskey type in this data as well.”
If we are to therefore take Griffin’s word, and overlook some fairly generous caveats on the non-Kentucky front, this leaves us tantalizingly close to the 95 percent number. Go figure.
Still, there is one final elephant in the room to address: Jack Daniel’s.
While the Brown-Forman-owned brand markets itself as a Tennessee whiskey, all of its production standards qualify it as a bourbon under TTB regulations. In volume sales terms, Jack Daniel’s ever so slightly edges Jim Beam, the best-selling straight bourbon brand, which has a volume market share of around 29 percent, according to Nielsen data.
If we do include Jack Daniels in this exercise, there’s simply no way that Kentucky can claim 95 percent of the world’s supply of bourbon. But given that Brown-Forman chooses not to market this whiskey as bourbon, and based on the fact the TTB refers to Tennessee whiskey and bourbon as separate entities in official communications, this seems like a stretch.
Perhaps the answer to the initial question is simple after all: How much of the world’s supply of bourbon is made in Kentucky? That depends on how you define bourbon.