Whiskey and Bourbon Business on the Rise: Distillers Facing New Challenges
Whiskey enthusiasts across the globe are watching with bated breath and watering mouths as the market transforms. For the bourbon devotees, whiskey connoisseurs, and liqueur lovers, the booming business means new flavours, intriguing brands, and an exciting experience. But while aficionados are enjoying this golden time, the beloved distillers face tough situations.
The Global Whiskey/Malt Whiskey Market
The business is surging at an unprecedented rate. According to statistics, the global whiskey market, which was valued at approximately $57 billion in 2018, is expected to grow to an impressive $88 billion by 2025. America’s native spirit, Bourbon, is even making waves overseas, especially in China and India, where there is a growing middle class boasting a taste for Western culture and, significantly, bourbon whiskey.
The advent of craft distilleries and the rise in popularity of small batch and single malt whiskeys have further fuelled this growth, giving aged spirit lovers the luxury of choice. To top it all off, the surge in cocktail culture around the world has further propelled the industry.
The Challenges Amid the Boom
However, for distillers, this boom is a double-edged sword. The increasing demand for whiskey and bourbon is putting more pressure on distilleries to produce more, faster. Unfortunately, as every whiskey lover knows, you can’t rush a great bourbon or whiskey.
Distilling is an art that depends heavily on time and patience. Aging – the process that grants whiskey and bourbon their distinct, rich flavours – cannot be sped up. Meanwhile, the increasing demand for these liquors is causing reserves to dwindle, which threatens the supply of aged spirits essentially.
The Shifting Market Dynamics
As the industry grows, the dynamics of the whiskey and bourbon market are also shifting. Distilleries, faced with the surge in demand, are ramping up production, sometimes at great cost. Many are investing in improving and expanding their facilities. While some of these investments will no doubt pay off, they also introduce a potential for a whiskey bubble that could pop if the demand unexpectedly drops.
The Battle for Barrels
Another challenge distillers face is the battle for barrels. All bourbon must be aged in new, charred oak barrels, which are becoming more difficult to procure due to soaring demand and restrictions on logging. Some distilleries have reported that they’re on waiting lists for up to a year to get new barrels for aging.
Effects of Tariffs
International trade disputes have also hit the whiskey and bourbon industry hard, especially in the United States, as countries including Canada, China, the European Union, and Mexico imposed retaliatory tariffs on American whiskey. This trade dispute has caused a decrease in exports and slowed the industry’s robust growth rate. Despite this, the domestic market continues to flourish.
The Rise of “Whiskey Tourism”
One unexpected yet delightful outcome of this bourbon boom has been the rise in “whiskey tourism.” Distilleries, particularly in the U.S., have started offering tours, tasting events, and festivals to cater to whiskey enthusiasts’ growing interest. Over a million visits were recorded in the Bourbon Trail in Kentucky alone in recent years, which turned bourbon distilleries into lucrative tourist destinations.
The Future of Distilleries
As challenging as these times are for beloved distillers, the future remains promising. The whiskey and bourbon market still holds immense potential for growth. While addressing these industry issues calls for decisive actions, the passion of distillers, their commitment to quality, and the unshakeable spirit of whiskey enthusiasts worldwide will undoubtedly keep the industry flourishing.
The world of whiskey and bourbon is ever-changing. In the face of these challenges, distillers strive to create masterpieces in every bottle while maintaining the spirit’s soul. And for those of us fortunate enough to enjoy the fruits of their labor, it’s a beautiful time to raise a glass and toast to their unyielding dedication.