A host of product innovations, plans to ramp up production and Trump tariffs made 2018 one of the most gripping years for the contemporary American whiskey industry. But which brands will shake up the sector in 2019?
The remarkable pace of American whiskey’s growth seemed unstoppable – until US president Donald Trump decided to wage a trade war on unsuspecting nations around the world, unwittingly throwing Bourbon into the crossfire.
International trade relations got off to a rocky start in 2018, when president Trump slapped duties on steel and aluminium imported into the US.
Soon after, the EU, China, Canada, Mexico and Turkey fought back with their own set of punitive taxes, several of which affected American whiskey. The industry warned there would be casualties, and the ongoing tit-for-tat tariffs have affected the entire Bourbon supply chain.
Just last month, Scott Harris, of Catoctin Creek Distillery, said: “Not only are the tariffs impacting my company, but also my eight farmer suppliers, my glass producer in Pennsylvania and my cork producer in South Carolina.”
As the trade conflict continues to simmer, a number of leading producers, including Beam Suntory and Brown-Forman, have spoken of price increases.
The Distilled Spirits Council hopes that the recently announced US-Mexico-Canada Agreement, which replaces the beleaguered North American Free Trade Agreement, “will lead to further discussions in North America, the EU and elsewhere, resulting in the swift removal of the retaliatory tariffs on American spirits exports”.
Amid such uncertainty, the larger category players have yet to disclose whether the hikes have had a meaningful impact on their sales. Nevertheless, interest in Bourbon and other American whiskeys continues to grow, and Euromonitor predicts that volume sales will increase by 4% in 2018 to hit 387 million litres.
But the perennial question remains: can producers keep up with demand? Well, they are certainly trying, with a number of key players announcing eye-watering investments to ramp up capacity.
Chief among them is Buffalo Trace, which in June announced a US$1.2 billion expansion of its Kentucky distillery, which will be phased over 10 years.
Kris Comstock, senior marketing director at Buffalo Trace, says: “We continue to build new warehouses at a rate of one every four months; we installed new boilers over the summer and our progress continues for our new bottling hall to be completed in 2019, and new cookers next summer.”
At the start of this year, Jim Beam and Maker’s Mark owner Beam Suntory announced a US$917m investment to expand Bourbon production over the next five years, and last month Heaven Hill Brands confirmed it plans to pump US$65m into enhancing its operations in Bardstown, Kentucky, including a rebrand of the Bourbon Heritage Center.
Such investments have been applauded by the Kentucky Distillers Association, which revealed that Bourbon stocks in the state reached a 46-year high in 2018. There are now at least 7.5m barrels of Bourbon maturing in Kentucky – the equivalent of almost two barrels for every person living in the state.
Click through the following pages to see which brands we believe are ones to watch in the year ahead.