Bourbon Industry

Bourbon, Tennessee whiskey exports top $1 billion, setting record

A row of bourbon bottles at JDI in Lexington, Ky  on Thursday June 6, 2013  in Lexington Ky. Photo by Mark Cornelison | Staff
A row of bourbon bottles at JDI in Lexington, Ky on Thursday June 6, 2013 in Lexington Ky. Photo by Mark Cornelison | Staff Herald-Leader

The boom in bourbon shows no sign of slowing down: A record $1 billion in bourbon and Tennessee whiskey was exported in 2013, according to figures released Tuesday in New York.

Exports of bourbon and Tennessee whiskey were up 5 percent, to $1.005 billion in 2013 from $956.8 million in 2012, a $50 million increase.

The Distilled Spirits Council of the United States said that total American distilled spirit exports crossed the $1.5 billion threshold, with most of that coming from Kentucky bourbons and Kentucky-owned Brown-Forman's Jack Daniel's Tennessee Whiskey.

"Eighty years after Prohibition repeal, this global whiskey renaissance is a trend that is benefiting producers, large and small, in the U.S. and around the world," Peter H. Cressy, CEO of the spirits industry trade and lobbying group, said in a news release. "These export records are driven by industry innovation, a very positive perception of American distilled spirits quality and heritage, and market-opening trade agreements."

Kentucky Distillers' Asociation president Eric Gregory said Tuesday that few distillers would have believed bourbon's reversal was possible.

"We live in a global economy. Many of the international markets are driving the bourbon renaissance, especially the thirst for super-premium and ultra premium products. Single barrel and small batch bourbons are very popular in Asia, Russia, India and China."

Combined export and domestic sales of bourbon and Tennessee whiskey reached $3.4 billion, with the overall distilled spirits market rising 4.4 percent, or $928 million, to $22.2 billion, according to the group, known as DISCUS.

Retail sales of distilled spirits were estimated at $66 billion.

Overseas, the taste for American spirits keeps growing. The top five markets for U.S. distilled spirits of any kind were Japan (up 68 percent since 2012 to $120.8 million), Germany (up 114 percent to $140 million), France (up 268 percent to $130 million), the United Kingdom (up 89 percent to $159.6 million), and Spain (up 171 percent to $69.8 million).

"It used to be that America was known primarily for exporting Fords, Levi's and movie stars. Now, we have an equally as impressive calling card in the form of American whiskey," said Gerry Ruvo, chairman of Campari America, parent of Wild Turkey in Lawrenceburg. "Globally, Wild Turkey is growing at a strong 5 percent clip fueled by a worldwide growing interest in brown spirits, particularly bourbon. And while exports are doing exceptionally well, back here at home the Wild Turkey brand is on fire, posting double digit growth numbers. It is fair to say the hardworking people of Kentucky are on a roll, and the world is noticing."

Likewise, Beam Inc., parent of Jim Beam and Maker's Mark, hailed the gains.

"The DISCUS report is another powerful testament to our brands' heritage, authenticity and innovation — qualities that are helping fuel the growing demand for bourbon in the U.S. and in international markets," said Paula Erickson, spokeswoman for Beam.

The top growth markets were Nigeria, Panama, Greece, Georgia, China and Belgium, which each account for less than $20 million in sales but have seen tremendous recent increases.

In a news release, DISCUS senior vice president for international trade, Christine LoCascio, attributed the gains to the opening of new markets and trade agreements in recent years that have significantly reduced or eliminated tariffs in key countries and regions.

LoCascio also cited the group's export promotion program "Cheers From the U.S.A." which, in partnership with U.S. Department of Agriculture since 2005, has promoted American spirits in 15 countries. It currently has "American whiskey ambassadors" in China and India.

In the United States, sales of bourbon and Tennessee whiskey topped 18 million cases, up 6.8 percent. Revenue from those sales rose 10.2 percent, to $2.4 billion in domestic sales.

Overall supplier spirit sales in the United States rose 4.4 percent to $22.2 billion, with whiskeys leading the way.

DISCUS chief economist David Ozgo said all major whiskey categories grew last year. That's a first.

"The wide product selection spirits suppliers offer consumers again paid off with solid revenue growth," Ozgo said. "For the first time in decades, all whiskey categories saw some growth. Whiskey was once the dominant spirit of choice for most Americans. While growth had been picking up over the last few years, 2013 was a banner year."

Sales of whiskeys of all varieties in the United States grew 6.2 percent, to 52.7 million cases, or $7 billion in supplier sales.

"Last year, we thought whiskey set the world on fire with 3.8 percent growth, until this year, when it grew 6.2 percent, which is tremendous growth," Ozgo said Tuesday.

Besides bourbon and Tennessee whiskey's increase, Irish whiskey sales rose 17.5 percent, to 2.5 million cases, or $500 million; and single-malt Scotch rose 11.6 percent to 1.8 million cases worth $590 million.

The rise of cocktail culture, product innovations such as new "expressions" and premiumization — interest in older, limited and expensive spirits — fueled the higher whiskey sales.

According to Ozgo:

■ Flavored whiskeys, which accounted for 45 percent of whiskey growth volume, and traditional whiskeys (including the more expensive premiums) were responsible for 80 percent of revenue growth.

■ Another big factor was the rise of craft distillers and craft brands, from 82 in 2010 to more than 400 in 2013.

■ There were 129 new straight whiskeys, including 53 bourbons, introduced last year.

Distilled spirits continued to gain market share on beer for the fourth straight year, according to DISCUS. Spirits inched up 0.4 percentage points and now account for 34.7 percent of the beverage alcohol market, compared with beer's 48.3 percent and wine's 17 percent in 2013. Each point of market share equals $630 million in supplier sales, DISCUS said.

The market share gain is important, Ozgo said, because overall consumption per capita is holding steady, so the main way to increase distilled spirits revenue in the United States is by taking market share from beer.