We’ve been through a lot of ups and downs this year, huh? It simultaneously feels like it’s still mid-March but also like a decade has passed since. You’ve probably had a million conversations involving the phrases “unprecedented times” or “crazy year” or “nobody knows.” You’ve probably even caught yourself uttering the title of this series: “The New Normal.” Those words certainly came up a lot when we were doing research for it.
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Back in April I started thinking about college football returning. I wanted to know how college towns, and especially SEC college towns that live and breath gridiron, were going to fare this year. I sat at my desk, ignoring my real job probably a bit too much, and daydreamed about those bars and restaurants, those businesses and organizations, and most importantly those fans across the South getting back normal. What we know now that most of us didn’t know back in April was that this Fall wouldn’t be normal. I thought that maybe there’d be limited fans at games or something, but the idea of a modified schedule or even college football not happening at all was nowhere near my radar. That all seemed unfathomable at the time.
But the pandemic has pushed on, and here we are in September still in the thick of COVID-19. Of course, the impacts of the pandemic are much wider reaching than college football. When you zoom out it’s easy to see how businesses, individuals, families, and routines everywhere have been impacted. You’d be hard pressed to find something going through this year unaffected. Central Kentucky is no exception to this rule.
Lexington brings in billions (with a B) in tourism revenue every year. People visit from all over the country to hit up the Bourbon Trail, Keeneland, Kroger Field, and to experience the unique local flavor that Lexington offers. It’s estimated that the city lost nearly $12 million in hotel revenue in just the few weeks between March 22 – April 11 this year. But if you know Lexington, you know the city truly comes alive in the fall time. Spring is great, but here we are in September and I’m sure we could all share a ton of stories confirming that there’s nothing quite like the fall in the Bluegrass. So now that we’re here, how is it going to be different this year? How are local institutions dealing with COVID? How are engrained traditions going on, adjusting, or dying, this year?
In this series of articles and podcasts we’re going to look at just that. Kentucky truly shines this time of year, so we want to give it at least a bit of the attention it deserves. We want to give local businesses a chance to share their stories and tell us what they’ve been up to. We’ve talked to all kinds of people, from students to entrepreneurs to Keeneland to UK in the search to find what exactly this year is like, what exactly The New Normal is.
And, since we’re talking Kentucky, what better place to start than with Bourbon:
Bourbon started as a necessity back in the day more than a piece of culture like we think about it now. Corn grew nearby, and people wanted to drink, so why not distill some liquor? Over the years the mashbill got refined and the state’s mineral rich limestone water added a unique, truly Kentucky, flavor. As steamboats made Louisville a trading hub local bourbon made its way throughout the country, including as a “purely medicinal” remedy during Prohibition. By the time the World Wars came around young American soldiers were introducing it to the globe, and when they grew up the high class images of Sinatra and the Rat Pack always included a bourbon in hand. Years later, the industry’s adoption of craft blends, single barrel editions, and limited releases has turned it into the collector’s dream and defined a culture of appreciation for the spirit.
If you go anywhere on the Bourbon Trail the number one word you’ll hear is “shortage, shortage, shortage.” Saying there’s not enough bourbon to go around right now would be an understatement. As international markets follow suite in their adoption of America’s Native Spirit and domestic appetites continue to increase, demand far outpaces supply. And since you have to age any bourbon worth its weight in the barrel for a considerable amount of time, it’s not like Kentucky can just start making more to sell tomorrow. Like any art does, a distiller might tell you, bourbon takes time.
If you want to get technical, bourbon must be made with a minimum of 51 percent corn, aged in new charred oak barrels, stored at no more than 125 proof and bottled no less than 80 proof. There are over 7 million barrels of it sitting around the state, making the local industry worth an estimated $10 billion dollars this year. With 24,000 employees making a total payroll of $1.2 billion annually, it’s easy to see how bourbon isn’t just a culture but a necessity for the Kentucky we know and love. But let’s be clear, it’s even bigger than that. The Kentucky Distillers’ Association estimates that for every job in the industry, three extra jobs are supported in the state. When you think about it, it’s easy to see how bourbon directly props up peripheral activities in things like construction and manufacturing, but it goes so much deeper than that when you consider services needed like real estate and legal counsel, as well as the impact to everyday activities in retail, hospitality, and tourism.
So even if for some reason you prefer a vodka soda when you’re cheering on your bet at Keeneland, we’d all be screwed if bourbon was hurt by COVID. This industry dominance and importance is reflected in the capital investment back into the production itself. There’s currently more than $2.3 billion in distilling related capital projects underway in Kentucky. Over half of that investment is happening at Buffalo Trace.
“We’re investing a lot of money to make more bourbon for the future,” said Kris Comstock, Buffalo Trace’s Senior Marketing Director. We talked to him to get his perspective on bourbon and the pandemic. (Side note: he played football at UK with Tim Couch, we got a bit off topic at one point). “We’re investing to double our capacity. We’re building a new aging warehouse every four months. To build, and then fill it with bourbon, it’s $25 million, and we’re doing that every four months. We need more capacity to fill the barrels too, though. We put in a new boiler, we’re putting in a new cooker, we need more fermenter tanks, we need more stillhouses. We need to double everything.”
If I’m being honest, this isn’t the tone I was expecting from Kris. I hopped on the call ready to learn about slowing sales because nobody was going out and revenue loss from the lack of visitors. What I didn’t realize, but honestly should have known, is that liquor is a pretty resilient product. For what it’s worth, Buffalo Trace makes no money from being part of the Bourbon Trail. Tours and tastings are free. Even though they just spent millions redoing their Vistor’s Center a few years ago and are about to do the same thing again, it doesn’t cost a cent to walk the grounds and try their bourbon on site. So, no harm done there.
I asked about sales specifically, too, wondering if there was any way that all of this investment may not be the smartest move in the long run.
“People are continuing to enjoy bourbon,” Kris assured me, “they’re just doing it in different settings, they’re doing it at home as opposed to going out.”
It looks like our ole’ Kentucky bourbon may be just fine after all.
They have had to adapt though, as everyone has. I thought it was really interesting that with different settings come different bottling practices.
“We’ve seen consumption shift a lot. The standard size bottle for bars is the liter, we’ve actually had to change our size mix, we’re putting the bourbon into 750ml bottles so we can get that bourbon into homes. It started back in April, our distributors were telling us that the liters were piling up, don’t send us anymore, swap to 750mls.”
Beyond switching from handles to fifths, they also used their flexible production capabilities to lend a helping hand to the community by bottling hand sanitizer since the early days of the pandemic.
“As early as March we started making sanitizer,” Kris said, “and at this point we’ve made well over a million gallons. We were giving most of it away to hospitals and first responders.”
That really gross smelling new hand sanitizer that makes you feel like you just took a shot from a plastic glass at Two Keys, that’s the kind they’re making. Turns out using ethyl alcohol to sanitize takes you right on back to nights full of regret. But, it’s effective and honestly it’s most likely saved lives. And I don’t want to skip over that fact. Buffalo Trace wasn’t the only one making hand sanitizer this year to fill the gap when healthcare workers, and basically everyone else, so desperately needed it. Companies across the US pivoted to provide help where they could, and Kentucky of course was no exception. Bourbon distillers knew they were in a unique spot to bolster the community in a time of unprecedented need. So, they did it.
“The initial reaction was ‘what can we do to help?’,” says Pete Weiss, the Marketing Manager for Lexington Brewing & Distilling Company. “We were still trying to figure out our strategy with sales moving forward, but the overall attitude was ‘let’s drop everything, let’s figure out how to solve this problem.’”
And it’s not as easy as it seems. It took effort for these distilleries, and others, to pivot production. They had to follow new regulations they had never dealt with before, identify where to ship the product and manage an overwhelming demand for it, distribute it, and repeat. All while foregoing capacity to produce their usual, money-making products. This was a labor of love, and one that these companies jumped on without hesitation.
“Our visitor’s center had to be shut down, so all of the employees that were giving the tours and doing the tastings were shifted over to the hand sanitizer line,” says Pete Weiss. The Town Branch piled up as the liquor bottling room became a hand sanitizer bottling room. The willingness of these employees throughout the industry to so quickly yet so dramatically change up their daily routines is commendable, and it’s not just me saying that.
“We’ve got a great workforce,” Kris Comstock of Buffalo Trace said, “the people are fantastic. They get the credit, everyone who works at Buffalo Trace are heroes to me. We don’t win awards without 500 people coming in everyday and caring about making bourbon, and we don’t stay safe without all of their help too. I’m really proud of everyone that works at the distillery.”
Luckily for those 500 employees at Buffalo Trace, and the tens of thousands of industry employees throughout the state, it seems like things aren’t going to be all that bad in the long term. I don’t think I can overemphasize how important that is to the state economy. Bourbon was prohibition proof, and it looks like it’s pandemic proof as well. There may be a concern with future overcorrection and over-expansion, but that’s years away if it ever comes. We have enough to deal with already in 2020.
But what about the other major alcohol we all love to drink here in Kentucky: beer? Next week we’ll talk to a couple fan favorite Bluegrass brewers: Country Boy and Blue Stallion. Stay tuned to The New Normal, and subscribe on Apple Podcasts or Spotify.