Lifestyle:
I am often asked the question “What do you see in the future for Bourbon? Will the Bourbon Boom last?” I am no fortune teller, so my opinion is just that, an opinion. However, I will attempt to tell the future here. I will start by looking at the past.
Bourbon went through some tough times in the late 20th century. Sales decreased starting in the 1960s and were at a record low when the 1990s started. However, sales started turning around in the late 1990s and the so-called “Bourbon Boom” started. I say so-called because sales, as great as the growth rate was, barely surpassed what sales were in the 1950s. I think it was more of a natural adjustment in the market for whiskey. Sales today are still strong, but the growth has slowed down in the last few years and there is once again overproduction in the market and that is hurting the smaller, artisan distilleries. Many of them have been forced out of business in the past two years.
Bourbon will not return to the bad old days of the late 20th century. There were many factors that caused the decline, but I have written about that before and you can read my blog on that subject. I do see problems for the Whiskey industry as a whole. Donald Trump’s obsession with tariffs is the first hurdle the industry has to overcome. Export sales of American whiskey fed the growth. The trade wars with Canada, Mexico, Europe and China put sales in these growing markets in doubt. Canada has already pulled American whiskey from their shelves and that is going to hurt American distillers. This means the distillers are going to have surplus whiskey domestically that they made to supply foreign markets that they now cannot sell. They have to find a new market for those whiskeys, hopefully in a country that is not part of a trade war.
Domestic sales of whiskey have slowed, but are still strong. This is helped in part by Bourbon Tourism. The Kentucky Bourbon Trail has grown to include 60 distilleries. They are bringing in 2.5 million visitors to the distilleries each year. If each visitor only buys one bottle of whiskey on each visit, that is still a lot of whiskey being sold. That is just in Kentucky. Distilleries in other states have also embraced the tourism side of distilling and are selling bottles to tourists. As long as the tourists keep coming, sales will continue.
You will see a decrease in the price of some whiskeys. As distilleries try to get rid of their excess barrels, they will offer them at lower prices to non-distilling whiskey brands. It is hoped they will pass along some of that savings to consumers. You should also see more whiskey on the market for the allocated brands as supplies increase.
With the slow-down of sales, you will also see the bad side of the business as distilleries start laying off employees because they are not needed. This has already started with Brown-Forman closing its Louisville Cooperage and will continue as other distilleries feel the pinch in sales.
To sum up what I think the future will bring is a leveling off of the market. Bourbon sales will continue to decrease in overseas markets because of trade wars. Domestic sales will continue to be strong. Distilleries that are making good whiskey will continue to sell bottles. Only when export markets are once again made open, will you see growth return to the whiskey industry.
Photos Courtesy of Rosemary Miller