Bourbon is Riding High as Production and Sales Soar
In what is a clear contrast to tech stocks which did not perform as expected, the sales of distilled spirits soared to nearly $72 billion last year. The surge in demand for Bourbon whiskey is driven by cocktail craze among young drinkers. After the collapse back in the 1970’s, it is now rediscovering its place as a favorite among millennial worldwide. Over the past decade, it has outshone aside beer to become the most selling whiskey. Distillers in Kentucky are taking advantage of this by producing whiskey that is focused on young drinkers who are eager to rediscover the taste of whiskey-based cocktails.
Some American whiskey makers such as Brown-Forman known for Jack Daniel’s and MGP Ingredients saw their stock rise in 2018 as their sales improved substantially. For example, MGP Ingredients’ stock rose significantly from $6 in 2014 to $98 in 2018.
Bourbon is fast becoming the first choice among cocktails thanks to various flavors which make it suitable for mixing. The increasing thirst for premium bourbon brands is giving producers a chance to expand overseas thanks to the transformation brought by younger adults. This thirst for whiskey both in the US and abroad has helped propel the supplier sales for spirits by more than 4%. American whiskeys surpassed its competitors with a growth of more than 7% from the previous year generating revenues of approximately $2.7 billion.
Time changes everything
The bourbon industry has experienced a total transformation. It has gone from a disrespected swill to a special drink world over. This sudden change is seen increased investment in bourbon distilleries mainly in central Kentucky which will allow companies to double their production. It should be noted that Kentucky is the world’s largest producer of bourbon because 95 percent originates there according to a report by state distillers’ association. About 5 million barrels of bourbon and other types of whiskey are in this state currently. This makes it the highest inventory of bourbon since the early 1980s.
Although some industry experts argue that American whiskey is far from peaking, it has made its intention known as it enjoyed booming exports in 2018. It, however, faced various challenges one being the imposition of tariffs by Europe and other crucial trading partners as retaliation for the trade war with Trump administration. Things will eventually work out and Scotch whiskey as well as exporters will make way into these markets. While mainstream brands experience challenges brought about by pricing, whiskey brands are hoping that the new trend will keep them afloat to compete with high-end spirits.
As consumers begin appreciating classic cocktails, such as Manhattan, fine bourbon gets more fame than ever before. Some investors are now skipping stocks in favor of direct investment in barrelhouses. They are currently figuring how to make a kill as value increases occasioned by aging barrels. IJW Whiskey is one of the biggest attractions to whiskey financiers when it comes to this. It is aiming to become the leading independent repository in the world and serve as the biggest supplier to the world’s famous retailers.
While the American Whiskey industry appears to have made great strides over the past few years, complete recovery of the industry might take time. It may also require more efforts for the bourbon industry to reach its full potential and outpace the competition. Despite this, you can now find what you could not back in the 1980’s now with even a more reasonable price and a rich portfolio and flavor. Things may even turn out brighter than before in a few years to come.
