Raising a Toast to the Bourbon Supply Chain (11/11/25)

Ellie Thornton

Alright Steve, before we get tangled in the storms of global trade wars and tariffs—can we just pause for a second and talk about what an absolute powerhouse Kentucky bourbon is right now? The 2024 numbers are, honestly, a bit jaw-dropping: 9.2 billion dollars in total economic impact last year. That's not just a number, is it? That's, like, real families, real jobs—over 23,000 of them! I was poking around the latest report and, I mean, $358 million in taxes, 2.5 million Bourbon Trail visitors, hundreds of millions pouring into small town economies... It's sort of amazing!

Steve DeNunzio

Yeah, it's wild! And, you know, as someone who grew up in California before coming to Ohio, I've seen plenty of, uh, wine country. But I've visited that Bourbon Trail, and Kentucky's bourbon culture is something else entirely. Think about it—there are more than 12 million barrels aging in their rickhouses right now. That's more than two barrels for every man, woman, and child in the state. It’s a staggering legacy that’s become modern economic muscle.

Ellie Thornton

Seriously! And what I love most is how much this industry means to rural communities. I actually visited Bardstown while I was studying abroad—this must be, what, five years ago now—and you could just feel the local pride. Bourbon isn’t just "big business" there, it’s woven into community events, school fundraisers, the local shops and, honestly, everything had a bourbon story to tell. And with corn production up 300% since 2009—21 million bushels sold to distillers, all from Kentucky farms... That’s not just boosting bourbon, that’s, you know, lifting every local farmer along the way!

Steve DeNunzio

Absolutely. This kind of ripple effect is something we’ve touched on in other episodes—like how infrastructure or supply chain innovation can reshape a whole region. Here you have a signature product that isn’t just symbolic; it pays real wages, funds schools, and builds roads. And bourbon tourists—they’re spending more, and they’re younger compared to your average Kentucky visitor. It keeps those small towns vibrant, alive, and thinking about the future.

Ellie Thornton

And with 100 licensed distilleries now—wasn’t it less than 20 just fifteen years ago? It's, like, you can't walk a mile without bumping into a new tasting room or a local digging up his grandma’s sour mash recipe. But, there’s this undercurrent I keep hearing, Steve, that all isn’t as easy as it looks on the surface. These new jobs, the tourism, the tax revenue... they're real, but they're not insulated from what's happening globally, right?

Steve DeNunzio

That's right. I mean, it’s an incredible time for bourbon, but there’s definitely turbulence ahead. Let’s get into that—because those global headwinds are coming fast.

Steve DeNunzio

So, tariffs. The word that makes supply chain folks everywhere grind their teeth. You look at exports—nearly 30% of all Kentucky bourbon is shipped out globally. That’s a huge exposure. But with tariffs flaring up—especially with the EU and Canada—it’s made life pretty miserable for a lot of smaller players like Brough Brothers and The Bard Distillery.

Ellie Thornton

It’s the unpredictability that gets me. I was reading about how Brough Brothers had these wonderful plans to expand into Canada—big dreams, lots of investment—and now it’s just all paused? I mean, Canadian stores literally clearing American bottles off shelves, contracts broken overnight, just on the threat of a new tariff. And apparently Europe could double down too—possibly a 50% tariff on American whiskey. That’s, what, double the previous rate?

Steve DeNunzio

Exactly, and that's what’s driving all this anxiety. I actually had a student last semester working on a capstone about supply chain risk for distillers. She was struggling to find patterns because, honestly, there's no way to plan. The trade policy changes month to month—you might get a reprieve for 30 days, then bam, the tariffs are back. So how do you decide how much to age, how much to ship, which markets to expand into, when your access can literally disappear overnight? That’s near impossible for long-term planning, especially with the bourbon aging process—some of these decisions, you’re making them five, ten years out.

Ellie Thornton

Right, and these aren’t just numbers on a spreadsheet for the small producers. I saw Tom Bard—the Bard Distillery—basically saying every pallet that doesn’t go out the door, that’s a potential disaster. They’d banked on Canada being, like, a quarter of their revenue, invested in new equipment, everything. And now they’re sitting on inventory because you can’t risk shipping when the market might snap shut. It's kind of heartbreaking and honestly, not just them—he said, “We’re small-business Americans, so we’re going to make it work," but... ugh. It's a lot of risk for people who don’t have the safety nets the big guys do.

Steve DeNunzio

Exactly. Some of the bigger names—Brown-Forman, Sazerac—they can sort of ride these storms out, but the little guys? Not so much. And let’s be real, that month-to-month policy shuffle doesn’t help anyone. As we saw in that food manufacturing article, even just the threat of tariffs is enough for buyers—especially in Canada and Europe—to hit pause or walk away. So, bourbon’s global growth engine is stalling. Even as demand is there, distillers are just waiting for someone to say, “Go!”—and it never really comes.

Ellie Thornton

It’s like building for a party you might not get invited to in the end, right? Where was I going with this...? Oh, but what happens on the home front when bourbon can’t count on exports?

Steve DeNunzio

Well, that's where the next chapter comes in—because at the same time, we’re seeing major shifts in how Americans themselves drink bourbon. And that’s another layer the industry’s gotta adapt to, fast.

Steve DeNunzio

Let’s talk about the U.S. market. After a decade of breakneck growth, things have definitely cooled off. 2024 was, I think, the first year since ‘08 where U.S. whiskey actually saw a decline—down about 4 percent. That’s not a crash, but, uh, definitely the end of those crazy double-digit years.

Ellie Thornton

Yeah, and it's fascinating—young drinkers, if they're drinking at all... that's another trend...are reaching for tequila, canned cocktails, all sorts of ready-to-drink things. Bourbon’s a bit of a tougher sell when something fizzy and exotic is at hand. And shelves are getting crowded—bottles are sitting, prices are creeping up, and suddenly, even enthusiasts are getting a bit... tired, maybe? I’d say the big “premiumization” rush is sort of stabilizing, but, um, retailers are definitely noticing.

Steve DeNunzio

The scramble now is to keep bourbon relevant, right? The industry’s shifting into what people are calling "Bourbon 3.0"—not just selling the drink, but selling stories, values, connection. And that means big moves into sustainability and responsible innovation. Maker’s Mark working with the University of Kentucky on white oak genome mapping—that’s, I mean, that’s long-term thinking, protecting the forests they need for barrels. Wilderness Trail and others putting solar panels on the roofs, water-recycling systems—these aren’t side projects, they’re table stakes for today’s consumer and for future regulations.

Ellie Thornton

I love that. The Bardstown Bourbon Company, for example—they stand out with their open partnership model. It’s not just, “we make bourbon, full stop,” but, “come take part, bring your brand, collaborate.” That flexibility—sort of like what we were hearing about in previous episodes with tech startups adapting fast—is how you weather storms. And Maker’s Mark—their environmental work is super visible, which I think really helps attract that younger, more climate-conscious crowd.

Steve DeNunzio

My uncle will appreciate the Bardstown shout-out. And yeah, it all points to something we’ve seen in a lot of supply chains recently: survival isn't about being the biggest, but about being the most adaptable and aligned with what people care about now. We saw it with drone logistics, truck parking, and, well, almost every episode this season. Bourbon’s not shrinking, but it is balancing—a little bit less boom, a lot more groundwork for the next generation. That "never stays down for long" Kentucky resilience, you know?

Ellie Thornton

Exactly. I reckon what comes next will set the template for other historic industries facing tech, climate, and shifting markets. We’ll keep watching—and tasting, of course!—as bourbon finds its next groove. Steve always a pleasure. Shall we raise a dram to future episodes?

Steve DeNunzio

Absolutely Ellie. Thanks for joining me, as always. And to everyone listening, we’ll be back next time with more stories from behind the freight curtain. Take care Ellie!

Ellie Thornton

Cheers Steve! Cheers, everyone. And remember, you can always email us at milestones at Steve DeNunzio dot com. See you next time!