Understanding the ‘Bourbon Boom’ and Increasing Demand for Bourbon Barrels

With the introduction of super-premium bourbons such as single barrels and small-batch brands in the 1990s, the bourbon industry has started booming and achieved financial success today. It has already garnered international interest in the first few years of the 21st century. Today, bourbon is responsible for pumping billions of revenue dollars into the country annually. Times have changed indeed!

The romantic vanilla, oak, and caramel notes of bourbon are hard to define, and everyone would admit to feeling a pull towards it. We are pretty sure all of you are utterly fascinated by the incredible resurgence of bourbon. According to the Kentucky Distillers Association (KDA) data, the production of Kentucky accounts for 95% of the world’s bourbon supply and is the highest since 1972.

Experts have termed it as the ‘Bourbon Boom’ owing to the bourbon industry’s drastic growth. The spirit has reached a level where it competes with other whiskey counterparts like rye and other distilled spirits like gin. With record bourbon sales, bourbon productions have only continued to increase in 2020. It won’t be wrong to say that used bourbon barrels are likely to grow too.

Even global insight firms are predicting that bourbon sales will increase in the next 5 years. There’s no doubt in that, isn’t it?

The next question is who’s fueling this massive demand and how Bourbon managed to build a strong consumer base in the past 20 years? This article will cover all of the questions that are lingering in the mind of every aficionado. Before that, let’s have a quick recap of the history associated with your sweet, rich, and woody Bourbon.  

Tracking Down the History of the ‘Bourbon Boom’

Bourbon is now the hottest category in the spirits industry unless you live in a dry county. Looking back upon its history, Bourbon lost ground to lighter spirits until 1970. During 1970, Bourbon and whiskey became America’s preeminent libation in the pre-Prohibition and post-WWII eras as they slowly lost favor to white spirits. 

In the early 2000s, there was a minor uptick in bourbon interest following the 9/11 attack that led to outbursts of patriotism. With time, Bourbon seized the opportunity, and the prices skyrocketed as people preferred the native and affordable spirit more than ever.

Even bartenders and the craft cocktail movement play a huge role in shifting from white to brown spirits. Today, Bourbon has positioned itself as a lifestyle and not just a mere spirit. This is how the bourbon boom began. 

Let us give you a few statistics to understand the magnitude of this movement. 

• According to Nielsen data in 2019, the off-premier dollar sales increased 12.9% in 2019 and reached a total of $1.78 billion. This made Bourbon the third fastest-growing spirit after tequila and rye whiskey. On the other hand, only vodka and blended whiskey managed to record greater off-premise dollar sales totals than Bourbon in 2019.

• The global data from The International Wine and Spirit Research (IWSR) stated that Bourbon represents 8.7 % of the US’s total spirits volume. After looking back over the past 5 years, they reported the compound annual growth rate of 7.9% for volume sales and 11.4% for dollar sales. 

As said earlier, the industry will continue to experience continual growth over the next 5 years for both value and volume. Along with the spirit, the demand for new charred oak and bourbon barrels continues to be on the rise. Get used oak bourbon barrels for sale right here!

The Rise of Bourbon

Rise of Bourbon

According to Eric Gregory, President of Kentucky Distillers’ Association (KDA), the combination of four key factors has kindled bourbon growth in recent decades. The introduction of small-batch and single-barrel expressions in the 80s and 90s kicked off the premiumization trend that helped in boosting bourbon’s reputation as a high-quality spirit. 

• Firstly, with the emergence of the global export market in the mid-90s, scotch whiskey and other international whiskeys were shipped overseas after the North American Free Trade Agreement (NAFTA) Agreement and European Union (EU) Agreement was done.

• Secondly, these agreements have helped increase exports and ensure trading partners respect the ‘distinctive product recognition’ that has protected bourbon’s reputation internationally. (Every bottle sold in foreign markets where the U.S has trade agreements should comply with America’s legal definition of the spirit.)   

• Thirdly, the cocktail culture has also helped rediscover classic bourbon cocktails like old fashioned. Bartenders have also mastered the art of making fantastic cocktails. 

Lastly, we cannot forget about bourbon tourism. Today, bourbon tourists can visit distilleries located within an hour’s drive of each other, just like the Kentucky Bourbon Trail and the Kentucky Bourbon Trail Craft Tour, which witnesses millions of tourists annually. 

Several experts have agreed that bourbon tourism has attracted huge consumer interests who have loved its authentic and smooth taste for decades.

We cannot forget that distillers have been continually innovating bourbon and implementing the latest techniques like barrel-finishing. This has helped them understand the nuances of whiskey and pull out certain flavors you wouldn’t have ever thought.

Even flavored bourbon brands are trying hard to establish themselves in the market and have acted as a bridge for consumers to fit into the bourbon subcategory. Bourbons have evolved in the past few years owing to their latest innovations and wide demographic of drinkers. Surprisingly, women are exploring the subcategory with higher-end cocktails.

The 25-to-54-year-old range holds the largest percentage of bourbon consumers, says a study by IWSR. This means bourbon is no longer an older man’s drink. Your bourbon has made its way among wealthier drinkers too. We don’t say this; it’s what the MRI-Simmons study shows.

“Consumption by adults with a household income between $150,000 and $250,000 has jumped 46 percent since 2013, according to MRI-Simmons. At the $250,000 to $500,000 range, it’s increased 78 percent.”

You won’t be shocked to hear that bourbon sales were significantly high during the pandemic. The Nielsen data revealed that the off-premise sales of bourbon have already reached $1.34 billion, which is a 29.7 percent rise compared with the same period last year.

Larger distilleries are the main beneficiaries and have notable increases in recent years and during the pandemic. The supply of used bourbon barrels is blooming too as people prefer aging bourbon in it.

Conclusion

There’s only one issue that has impacted the bourbon industry – the 25% tariffs imposed on American whiskey by the EU in 2018. Due to this, the American whiskey exports declined from $757 million to $462 million between June 2018 and June 2020. Unfortunately, the tariffs are expected to increase to 50% in 2021 unless an agreement is signed between the EU and U.S. (1)

Along with this, the U.S. has enforced its own tariffs on EU imports, making the export market less attractive for bourbon producers. They are thriving to sustain on their home soil. Despite these issues, bourbon shows no signs of slowing down and continues to hold its lion’s share. 

Along with it, the demand for bourbon barrels has increased exponentially as people are using it to age spirits like tequila, scotch whisky, gin, wine, beer, etc. to obtain unique flavor characteristics. Barrels are an ideal souvenir for weddings and events too.

If you need oak bourbon barrels to adorn your bachelorette party this year, Rocky Mountain Barrel Company offers you used oak, bourbon, whiskey, wine, and rum barrels from across the world. Originally focused in North America, we have expanded our operations over the years to include multiple countries and a wide variety of barrels. We have branched into innovative barrels like those used to create vanilla extract, hot sauces, or even maple syrup. Be part of our expanding client pool!

Do check out our latest post on using “used bourbon barrels” for wedding decor here.