OUR MISSION SINCE 1880
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2 OUR MISSION SINCE 1880 PROMOTE, PROTECT & UNITE KENTUCKY S SIGNATURE BOURBON AND DISTILLED SPIRITS INDUSTRY FOUNDED IN LOUISVILLE HQ IN FRANKFORT SECURE THE INTEGRITY OF OUR INDUSTRY AND OUR TIMELESS CRAFT STRENGTHEN KENTUCKY S RIGHTFUL PLACE AS THE ONE, TRUE AND AUTHENTIC HOME FOR BOURBON.
3 KDA NOW HAS 27 MEMBERS THE MOST SINCE THE REPEAL OF PROHIBITION 3
4 KDA HERITAGE Beam Suntory, Clermont & Loretto Brown-Forman Corp., Louisville & Versailles Diageo North America, Louisville & Shelbyville Four Roses Distillery, Lawrenceburg & Cox s Creek Heaven Hill Distilleries, Inc., Bardstown & Louisville Wild Turkey Distillery, Lawrenceburg
5 PROOF KDA welcomed its first Proof member in 2013 with the addition of Michter s Distillery in Louisville to our historic ranks.. EDUCATIONAL KDA welcomed its first educational member in 2012 the Distilled Spirits Epicenter in Louisville. The DSE offers educational and training courses, bottling services and small batch production for a variety of clients.
6 CRAFT ESTABLISHED MEMBERS KDA began welcoming craft distillery members to its ranks in Established members have 100 or more barrels in inventory of Kentucky produced spirits. Alltech s Town Branch Distillery, Lexington Copper & Kings American Brandy Distillery, Louisville Willett Distillery, Bardstown
7 CRAFT INTRODUCTORY MEMBERS Introductory members have fewer than 100 barrels in inventory of Kentucky produced spirits. Barrel House, Lexington Kentucky Peerless, Louisville Bluegrass Distillers, Lexington Boundary Oak, Elizabethtown Casey Jones, Hopkinsville Dueling Grounds, Franklin Corsair, Bowling Green The Gentleman, Paris Kentucky Artisan, Crestwood Limestone Branch, Lebanon MB Roland, Pembroke Old Pogue, Maysville Three Boys Farm, Frankfort New Riff, Newport Silver Trail, Hardin Wilderness Trail, Danville
8 WELCOME TO THE GOLDEN AGE OF BOURBON
9 WE ARE THE 95 PERCENT! ECONOMIC IMPACT STUDY SHOWS BOURBON NOW $3 BILLION INDUSTRY AS WORKFORCE DOUBLES IN LAST TWO YEARS, NUMBER OF DISTILLERIES TRIPLES, $1.3 BILLION IN CAPITAL INVESTMENT
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11 KENTUCKY DOMINATES BOURBON PRODUCTION Production has increased by more than 150 percent since 1999 (455,078 barrels to 1.2 million barrels in 2013) Highest production year since 1970 Premium small batch and single barrel brands are driving the Bourbon Revolution More than 5.3 million barrels of Bourbon gently aging in Kentucky First time inventory has topped 5 million barrels since 1977 The 2014 tax assessed value of aging barrels is $1.9 billion, double the amount since Source: Kentucky Revenue Cabinet 11
12 THERE ARE 1 MILLION MORE BARRELS OF BOURBON AGING IN KENTUCKY THAN PEOPLE 5.3 million barrels 4.3 million people 12
13 GENERATES $166 MILLION EVERY YEAR IN STATE AND LOCAL TAXES Seven different taxes on every bottle of spirits in Kentucky Aging barrel tax (local) rate by jurisdiction Aging barrel tax (state) 5 cents per $100 value Case tax 5 cents per case State excise tax $1.92 gallon Federal excise tax $13.50 proof gallon State wholesale tax 11 percent (raised in 2005) State sales tax 6 percent (added in 2009) Nearly 60 percent of every bottle of spirits in Kentucky goes to taxes Source: Distilled Spirits Council of the United States (DISCUS); The Economic and Fiscal Impacts of the Distilling Industry in Kentucky, University of Louisville, October
14 BARREL TAX VIRTUALLY ELIMINATED LEGISLATURE PASSES HOUSE BILL 445 KENTUCKY BOURBON BARREL REINVESTMENT CREDIT WILL POUR $13.3 MILLION (AND GROWING) BACK INTO DISTILLERIES
15 THE WORLD IS THIRSTY FOR BOURBON AMERICA S #1 SPIRITS EXPORT U.S. distilled spirits exports surpassed $1.5 billion in 2013 Kentucky Bourbon and Tennessee whiskey exports topped $1 billion for the first time Kentucky spirits exports grown by 99 percent since 2009 Exported to more than 126 countries Canada, UK, Australia, Germany, France, Japan are top export countries Top emerging markets for Kentucky Bourbon include Spain, Israel, Latvia, Panama, South Africa, Chile, Bahamas & Netherlands (by percentage growth, ) U.S. spirits exports to Korea increased 73 percent since the Free Trade Agreement passed in 2012 and eliminated tariffs Source: Kentucky Cabinet for Economic Development; Distilled Spirits Council of the United States (DISCUS); The Economic and Fiscal Impacts of the Distilling Industry in Kentucky, University of Louisville, October
16 PUT YOUR MONEY WHERE YOUR MASH IS $400 million since $630 million in next 5 years $1.3 billion between
17 In 1999, the KDA created the Kentucky Bourbon Trail tour to give visitors a firsthand, intimate and educational experience into the art and science behind crafting the world s finest Bourbon. 17
18 UNRIVALED CRAFTSMANSHIP KDA launched the Kentucky Bourbon Trail Craft Tour in 2012 to showcase the state s micro-distilleries, becoming the first state in the country to have such a tour. 18
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20 A record 571,701 people visited the Kentucky Bourbon Trail tour last year, a 12 percent increase over 2012 An additional 61,698 traveled to the Kentucky Bourbon Trail Craft Tour in its first full year of existence Visitors came from all 50 states and more than 50 countries and territories More than 1 million visitors in last two years and 2.5 million visitors in the last five years Passports have increased 9,614 percent since 2007 more than 70,000 completions National Geographic named the Kentucky Bourbon Trail adventure a top 10 Best Spring Trip for 2013 CNN International named Kentucky Bourbon Trail tour a Top 10 Classic American Experience 20
21 CHANGING THE KENTUCKY TOURIST Average household income is $95, percent are above $100, percent came from outside Kentucky 75 percent came to Kentucky just for the Kentucky Bourbon Trail experience 31 percent made multiple trips to complete their Kentucky Bourbon Trail experience 47 percent had 3 or more people in their group 63 percent stayed 3 or more days and 79 percent stayed in a hotel or bed & breakfast Average spend is $978! Source: U of L study 21
22 THE NATIONAL PRESS HAS TAKEN NOTICE OF BOURBON S GROWING TOURISM AND ECONOMIC IMPACT. 22
23 FORTUNE MAGAZINE COVER AND EIGHT- PAGE SPREAD IN SPRING ISSUE 23
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25 Five-day Bourbon fantasy camp, June 3-7 Louisville CVB Host City sponsor Unique day events at KDA distilleries with rare insider access Nightcap events with distilleries in Louisville to showcase the city s Bourbon culture & cuisine Prestigious opening & closing events, plus a few surprises 50 Golden Tickets sold out in a week Dynamic demographic from all over the world Classic, unforgettable experience only whiskey event actually produced by the distilleries themselves Individual tickets on sale soon at 25
26 KENTUCKY BOURBON TALES
27 WHY TRANSPORTATION IS VITAL TO BOURBON
28 HOW TRANSPORTATION SERVES BOURBON The three-tier system requires a degree of separation between the manufacturer, distributor and retailer Transportation Services was the 7 th highest commodity purchased by distillers last year Over $14 Billion purchased 68.5% from Kentucky Vendors Trucking is the largest component of our industry A reliable, steady interstate system is critical to our daily operations. Source: The Economic and Fiscal Impacts of the Distilling Industry in Kentucky, University of Louisville, October
29 FROM GRAIN TO GLASS Grain to the Distillery Corn, Malted Barley, Rye or Wheat Barrel Making and Delivery Logging of staves Delivery of finished barrels to distillery Filling barrels and sending to warehouse to age Once aged, remove of barrels to bottling 29
30 FROM GRAIN TO GLASS Delivery of bottling material Glass bottles, labels, corks & other packaging Once bottled, picked up by distributor Distributor takes goods to warehouse Distributor will distribute spirits to retail locations across the country Consumer drives to retail location to purchase spirits 30
31 OTHER TOUCHES Spent Grains Farmers drive to distilleries to pick up spent grains to feed to livestock Exports Bulk spirits can be exported Tankers full of spirits exported via cargo ships Bottled in the final region Customs and consumers dictate finished product Rare occasion for spirits to ever be moved via air Delivery of finished goods Illegal for spirits to be shipped directly to consumers in KY Wine can be shipped, but not spirits or beer 31
32 WHAT DOES THIS MEAN FOR KENTUCKY? Good for consumers educational opportunities to learn more about the craft, its history and its future Good for tourism - increased tourism and positive publicity means more visitor dollars & hospitality revenue to local communities and state coffers Good for business spin-off companies build on the surging Kentucky Bourbon Trail experience, from tours to hotels, restaurants, bars and more Good for the industry visitors flocking to distillery home places, increasing brand awareness and loyalty Good for Kentucky keeps the Commonwealth competitive in the global marketplace and helps solidify the Bluegrass as the one, true and authentic home for Bourbon 32
33 IF YOU CHOOSE TO ENJOY KENTUCKY BOURBON, PLEASE DO SO RESPONSIBLY. THANK YOU. 33
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