Times are tough. Anywhere you go in the world people are struggling for equality, struggling financially, and even fighting for their lives. The economy has taken a major hit because of the pandemic, and the distilled spirits industry in the United States is no exception. In the Commonwealth of Kentucky, the Bourbon industry has seen its share of tough times and has always worked to help its community when possible. Whisky Magazine recently caught up with Kentucky Distillers’ Association president, Eric Gregory to learn more about the state of the Commonwealth of Bourbon in 2020.
“The good news is we had an outstanding legislative session with the passing of the eCommerce bill,” says Gregory. “We all knew that piece of legislation was the last domino to fall because wine has been doing this already since the 1970s and they’re in 46 states. We’re in a dozen states. Even before COVID-19 we were moving toward an increasingly delivery-based society, and I think the pandemic has unexpectedly expedited that process. A lot of states’ governors, like New York and California, have used executive powers to allow intrastate shipping during the pandemic. I’ve been talking to a lot of the guilds in those states and they think it has been so successful that when their legislatures meet next year they will be looking to keep that and expand to interstate shipping.”
In addition to the ability to ship Bourbon, which has always been dicey at best, there have been other major legislative victories for the industry according to Gregory.
One such victory is the ability for distilleries to sell collaborative beers in their gift shops, something Gregory points out is a major win for microbreweries across the region.
Another major victory lies in fighting drunk driving. The KDA worked together with legislators to pass and fund the ignition airlock program.
“Kentucky is the gold standard when it comes to Bourbon production, and we also have to be the gold standard when it comes to responsibility.”
Back in 2016, laws passed that allowed distilleries to serve cocktails and have other services besides tours, which has kept business flowing for many of them over the last several months. Aside from these legislative victories, which have made the industry more resilient in the face of uncertainty, quick action at the outset of the pandemic and its effects has also kept the industry going.
“Even during the pandemic, we were fortunate that we were able to remain open on the production side,” says Gregory. “I would like to think there was never any doubt, but we made sure the governor had all the facts, that you can’t just shut off a Bourbon still, and that we didn’t want to be looking four, five, six years out and have a dip in the Bourbon inventory because of the pandemic.”
There was never any doubt that distilleries would use their time and resources to help fight the pandemic during these difficult times.
“Our members really stepped up during the pandemic – one, to ensure the health and safety of their employees, and two, by producing hand sanitizer without even being asked to do it,” Gregory recounts. “There was never any question, they immediately pivoted to hand sanitiser, which has been a lifeline for the smaller craft distilleries. The big distilleries were able to do it in such volume that they were able to reach out to hospitals and first responders to donate it, which helped our Commonwealth keep the virus down initially. Our smaller craft distilleries were able to sell it just a little over cost locally, which both kept their communities supplied and allowed them to keep the lights on.”
Tourism, however, has taken a crippling hit according to Gregory. While things like curbside sales, hand sanitiser production, and to-go cocktails have kept things running, smaller distilleries depend on tourism for a significant portion of their revenue. Gregory has been in close contact with other guilds and the ASCA and has heard too many tales of smaller, newer distilleries in other states shutting down or having to lay off staff. To his knowledge, there have yet to be any distilleries in Kentucky that have had to shut down.
The KDA consulted with an infectious disease expert at the University of Kentucky early on to get a handle on what to expect and how to prepare. They released a report to officials and distillery members outlining what actions needed to be taken.
“Everything he told us has come to pass,” Gregory says. “One of the most important things he told us is you have to be sure you have an efficient rebound strategy in place until there is a vaccine. He told us anything you roll out you have to be prepared to close back up within 24 hours.”
2020 is the 21st birthday of the Kentucky Bourbon Trail, and in addition to yearly events like The Kentucky Bourbon Affair and Bourbon and Beyond, all of which have been cancelled, additional planned celebrations from May through August have also had to be shelved this year.
“We’re also looking at the social unrest side of things,” says Gregory. “We have really been upset by the deaths of George Floyd and Breonna Taylor in our own back yard. That has really forced us and given us the opportunity to start looking at an industry that has predominantly, for two centuries, been driven by white men, and we have to do better. There are some points in history where you look back and say that was an opportunity for broad change and this is one of those. We are looking at scholarships. We will have an advisory panel in place in the next few weeks to help us make those decisions and steer us in the right direction. It’s going to bring about fundamental change.”
The Kentucky Bourbon Industry is no stranger to fundamental change, and its adaptability over time is what has kept it so strong for so many generations.
“We will adapt and evolve,” says Gregory. “This industry survived Prohibition, so whatever it takes we will do it. A lot of the distilleries are already looking forward to January first.”
“The good news is we had an outstanding legislative session with the passing of the eCommerce bill,” says Gregory. “We all knew that piece of legislation was the last domino to fall because wine has been doing this already since the 1970s and they’re in 46 states. We’re in a dozen states. Even before COVID-19 we were moving toward an increasingly delivery-based society, and I think the pandemic has unexpectedly expedited that process. A lot of states’ governors, like New York and California, have used executive powers to allow intrastate shipping during the pandemic. I’ve been talking to a lot of the guilds in those states and they think it has been so successful that when their legislatures meet next year they will be looking to keep that and expand to interstate shipping.”
In addition to the ability to ship Bourbon, which has always been dicey at best, there have been other major legislative victories for the industry according to Gregory.
One such victory is the ability for distilleries to sell collaborative beers in their gift shops, something Gregory points out is a major win for microbreweries across the region.
Another major victory lies in fighting drunk driving. The KDA worked together with legislators to pass and fund the ignition airlock program.
“Kentucky is the gold standard when it comes to Bourbon production, and we also have to be the gold standard when it comes to responsibility.”
Back in 2016, laws passed that allowed distilleries to serve cocktails and have other services besides tours, which has kept business flowing for many of them over the last several months. Aside from these legislative victories, which have made the industry more resilient in the face of uncertainty, quick action at the outset of the pandemic and its effects has also kept the industry going.
“Even during the pandemic, we were fortunate that we were able to remain open on the production side,” says Gregory. “I would like to think there was never any doubt, but we made sure the governor had all the facts, that you can’t just shut off a Bourbon still, and that we didn’t want to be looking four, five, six years out and have a dip in the Bourbon inventory because of the pandemic.”
There was never any doubt that distilleries would use their time and resources to help fight the pandemic during these difficult times.
“Our members really stepped up during the pandemic – one, to ensure the health and safety of their employees, and two, by producing hand sanitizer without even being asked to do it,” Gregory recounts. “There was never any question, they immediately pivoted to hand sanitiser, which has been a lifeline for the smaller craft distilleries. The big distilleries were able to do it in such volume that they were able to reach out to hospitals and first responders to donate it, which helped our Commonwealth keep the virus down initially. Our smaller craft distilleries were able to sell it just a little over cost locally, which both kept their communities supplied and allowed them to keep the lights on.”
Tourism, however, has taken a crippling hit according to Gregory. While things like curbside sales, hand sanitiser production, and to-go cocktails have kept things running, smaller distilleries depend on tourism for a significant portion of their revenue. Gregory has been in close contact with other guilds and the ASCA and has heard too many tales of smaller, newer distilleries in other states shutting down or having to lay off staff. To his knowledge, there have yet to be any distilleries in Kentucky that have had to shut down.
The KDA consulted with an infectious disease expert at the University of Kentucky early on to get a handle on what to expect and how to prepare. They released a report to officials and distillery members outlining what actions needed to be taken.
“Everything he told us has come to pass,” Gregory says. “One of the most important things he told us is you have to be sure you have an efficient rebound strategy in place until there is a vaccine. He told us anything you roll out you have to be prepared to close back up within 24 hours.”
2020 is the 21st birthday of the Kentucky Bourbon Trail, and in addition to yearly events like The Kentucky Bourbon Affair and Bourbon and Beyond, all of which have been cancelled, additional planned celebrations from May through August have also had to be shelved this year.
“We’re also looking at the social unrest side of things,” says Gregory. “We have really been upset by the deaths of George Floyd and Breonna Taylor in our own back yard. That has really forced us and given us the opportunity to start looking at an industry that has predominantly, for two centuries, been driven by white men, and we have to do better. There are some points in history where you look back and say that was an opportunity for broad change and this is one of those. We are looking at scholarships. We will have an advisory panel in place in the next few weeks to help us make those decisions and steer us in the right direction. It’s going to bring about fundamental change.”
The Kentucky Bourbon Industry is no stranger to fundamental change, and its adaptability over time is what has kept it so strong for so many generations.
“We will adapt and evolve,” says Gregory. “This industry survived Prohibition, so whatever it takes we will do it. A lot of the distilleries are already looking forward to January first.”
