With its well-known history of boom-and-bust, bourbon’s major comeback and accelerated growth in the last 15 to 20 years surprised many – including some of the industry’s biggest bourbon owners. Business insiders from Forbes to Liquor.com predicted and saw come to fruition a newfound craving and craze for whiskey and bourbon.
Now, aspiring entrepreneurs and investors who missed the chance to stake a claim are scrambling to gain a strong foothold in this promising business.
The good news is that bourbon is booming for a reason, and it is only expected to continue to be in high demand. And not just in America, but around the world.
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Bourbon’s Big Comeback
Within a decade of Prohibition coming to an end, the bourbon industry experienced incredible growth and success. That is, until the early 1970s.
The ‘70s brought with it the increasing popularity of lighter spirits like beer, gin, cheap wine, tequila, and vodka. In fact, by 1973, vodka sales topped those of bourbon and whiskey. Aside from single-malt Scotches making their way on the scene in the ‘80s, the American bourbon industry remained largely stagnant until the turn of the century.
In response, most alcoholic beverage conglomerates built and braced their businesses to accommodate consumer demands. Instead of merely owning and selling bourbon, some diversified their products from rum and bourbon to also include tequila and vodka.
Meanwhile, the glass was half-full in foreign countries like Japan. Previously unknown to the Japanese, bourbon – once introduced – quickly became a coveted commodity. What’s more, the Japanese wanted well-aged, high-proof bourbon in a premium-package. By 1990, an annual import of 2 million bourbon cases were flowing into the country.
By the early 2000s, the Japanese consumer had proven that Americans might, in fact, be a promising target market for a high-quality bourbon product as well. Believe it or not, American tourists had traveled to Japan to purchase the quality bourbon stock!
And Americans’ tastes had, as it turns out, been refined. From 2009 to 2014, Kentucky bourbon not only scored its highest revenue in decades, but also reached $1 billion in sales for the first time.
This was a direct result of combined bourbon sales in America and in foreign markets, thanks to new trade agreements. Flavored whiskeys – such as cinnamon, vanilla, and apple – and creative, ready-to-drink cocktails were new innovations that contributed to millennials’ interests in the drink.
Bourbon’s New Consumers
Millennials are but one demographic of bourbon’s newest consumers. Beverage brands have recognized the payoff of investing in their young and up-and-coming consumers. While millennials are the primary buyers purchasing 52% of the product, Gen X is following close behind at 37%.
Similarly, whiskey is no longer the stereotypical drink of middle-aged American men. Women love it, too. A study by Heaven Hill – a distillery in Bardstown, Kentucky – found that more than 30% of bourbon drinkers are women. This follows a 50% increase in women drinking bourbon between 2011 and 2014.
Furthermore, the “spirit of America” has spilled into other foreign markets. Today, some of the top buyers include Japan, Spain, Canada, and Australia.
Bourbon’s Unfolding Story
The unfolding story – inexplicably intertwined with the rich history – of American bourbon continues to be a common thread of its boom. Time has shown that consumers are interested in more than the drink. They care about the brand, who makes it, where it is aged, and how it is distilled.
For bourbon drinkers and bourbon business owners alike, bourbon is a commodity as well as a culture. Industry experts predict bourbon will remain a desired product and worthwhile investment for years to come.
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