NEW YORK — In April, the whiskey axis tipped.
You have just landed on the soil of the home of bourbon, Americas native spirit, Bill Newlands, North American president of Beam Inc., told international spirits experts at the World Whiskies Conference.
For the first time, the annual global business summit, a gathering of the worlds movers and shakers in the brown-liquor trade, was held in New York not London, not Scotland. Whats more, the star attraction had the distinct oaky flavor of Kentucky.
Welcome to the Big Bourbon Nation.
The experts came to celebrate the achievements of two Kentucky legends Jimmy Russell of Wild Turkey and Jim Rutledge of Four Roses, who were inducted into Whisky Magazines Icons of Whisky Hall of Fame.
They came to dissect the recent success of American whiskey.
And they came to taste the competition.
The night before the conference, hundreds of enthusiasts gathered to sample more than 300 whiskies from Indian single-malt to Irish whiskey finished in bourbon barrels, and every permutation in between.
Side by side with the peaty Laphroiag scotch, the sophisticated Johnny Walker and the quirky That Boutique-y Whiskey Co. were Kentucky wares: There was Russell pouring samples of his latest Russells Reserve Single Barrel bourbon; Evan Williams representatives extolling the virtues of its new Larceny bourbon; and Jim Beams mustachioed ambassador beside a whole bar devoted to mixing Makers Mark cocktails.
Bourbon was the belle of the ball, and by the end of the night, even the guys in kilts were paying attention.
The reason is clear: American whiskey is winning the world over. Formerly fuddy-duddy brown spirits are starting to look as white-hot as vodka.
In 2012, for the first time in recent memory, whiskey sales increased faster than those of vodka, gin, tequila and other spirits. According to the Distilled Spirits Council of the United States, the alcohol industry trade group, last years 3.6 percent growth in sales of U.S. whiskey was the biggest increase in 30 years. Revenues are climbing even faster up 6.7 percent in 2012 to $6.4 billion thanks to the strong sales of high-end and super-premium products, which now account for 80 percent of the gain.
Much of that momentum came from bourbon, which surged 11.9 percent last year, the second year in a row for double-digit gains.
The bourbon boom is real, Newlands said in New York. Today, bourbon is the fastest-growing category in this country. When did you think you would hear that comment? Its now the No. 3 category within this country, and before this year is over, it will be the second-largest category in our industry in this country.
How big can bourbon be?
Beam grew 10 percent worldwide last year, Newlands said, moving through a presentation showing Beams array of brand extensions everything from Jim Beam Honey and Red Stag Black Cherry flavored whiskies to Jacobs Ghost, a nearly white, barely aged bourbon, and Devils Cut, a woody-tasting bourbon product purportedly derived by extracting alcohol that soaks into barrels.
Sales growth was even stronger for Beams premium brands: Makers Mark, up 15 percent; Knob Creek, up 24 percent; Basil Hayden, up 35 percent.
Were the largest bourbon in the world, the second-largest American whiskey, largest individual spirit in Australia, largest American whiskey in Germany, he said. Jim Beam alone did over 7 million cases worldwide last year.
The boom has been building for a long time: For the past decade, revenues of bourbon and its cousin, Tennessee whiskey, have soared, up 28.3 percent since 2003, to more than $2.2 billion last year.
Much of the growth came in Kentucky, where 95 percent of all bourbon is made, and Tennessee, home of Jack Daniels, a variation on bourbon.
Then Newlands posed a question: How big can bourbon be?
His answer: huge.
Im here to tell you today I think this could be the next massive spirit category worldwide for our business, he said. We believe it, and we think the consumer believes it, too.
Kentuckys bourbon distilleries are banking on it; they (and the state) are investing more than $300 million to capitalize on that growth.
Keeping up with demand
At the rate Kentucky distilleries are turning out bourbon, they will need the capacity. Last year, they filled a million barrels for the first time since 1973. They are likely to fill at least that many this year. Old warehouses that havent been used for storage in years are filled to capacity again, distillers say.
Its all an attempt to keep up with growing demand.
Russell, Wild Turkeys master distiller, has seen it all in his nearly 60 years in the business.
We used to do 70 to 80 barrels a day. Its 560 barrels a day now, Russell said. Wild Turkey has more than 500,000 barrels in storage and expects to have another 50,000-barrel rickhouse ready by October.
Were planning on the future. Were not making something to sell tomorrow. Were making bourbon for six or seven years down the road, Russell said. And Im hoping Im around to sell it.