Call to Order and Roll Call
The 2nd meeting of the Interim Special Committee on Tourism Development was held on Monday, August 15, 2016, at 10:00 AM, at Woodford Reserve Distillery . Representative Rita Smart, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Chris Girdler, Co-Chair; Representative Rita Smart, Co-Chair; Senator Morgan McGarvey; Representatives James Kay, Jerry T. Miller, Darryl T. Owens, and John Short.
Citizen Members: Vicki Fitch, Janette Marson, Lori Saunders, Prakash Maggan, and Mitchell Pearson.
Guests: Chris Morris, Master Distiller, Woodford Reserve Distillery; Kristin Meadors Baldwin, Director of Governmental Affairs, Kentucky Distillers’ Association; and Seth Wheat, Office of Adventure Tourism.
LRC Staff: Karen Brady, John Buckner, and Chip Smith.
Welcome and Overview of Woodford Reserve Distillery
Chris Morris spoke about the history of the distillery, where distilling began in 1812. The distillery has had multiple owners over its lifetime and was last sold in 1940 to Brown Foreman, Woodford Reserve’s parent company. The distillery has been closed numerous times throughout the years for a variety of reasons. In the late 1980s, Owsley Brown had a vision to develop a new Kentucky bourbon that has its own home, and for this home to be open for tourism and visitors. This vision of a new brand led to present day Woodford Reserve. In 1996, the distillery visitor center opened for the first time. Mr. Morris stated that many industry experts agree that it was Mr. Brown’s vision that was the spark that returned bourbon to the popularity that it enjoys today, and the foundation for the Kentucky Bourbon Trail.
According to the International Wine and Spirits Register, Woodford Reserve is the number one selling super premium Kentucky bourbon in the world, and is also in the top five super premium whiskeys in the world. Mr. Morris said that the brand is continuing to grow. Woodford Reserve Double Oaked, the recent entry into the ultra-premium whiskey category, is now the number one selling ultra-premium Kentucky bourbon in the world.
Within the last two years, the distillery has also introduced Woodford Reserve Rye, which it has high aspirations for. Mr. Morris stated that it is a very exciting time for the bourbon industry.
Kentucky Bourbon Trail
Kristin Baldwin stated that the mission of the Kentucky Distillers’ Association is to passionately and responsibly unite, promote, protect, and elevate Kentucky’s signature bourbon and distilled spirits industry. KDA has 28 members.
Kentucky makes 95 percent of the world’s bourbon. The most recent economic impact study shows Kentucky bourbon is a $3 billion industry and that the workforce has doubled since 2012 with over 15,000 employees. Bourbon production has increased 315 percent since 1999. Total bourbon inventory topped 6.7 million barrels in 2015, the highest since 1974.
Kentucky’s spirits exports have grown by 99 percent since 2009. In 2015, Kentucky bourbon and Tennessee whiskey exports to more than 126 countries topped $1 billion.
There are seven different taxes on every bottle of spirits in Kentucky, with nearly 60 percent of the price of every bottle going to taxes.
The Kentucky Bourbon Trail was started in 1999. KDA created it to give visitors a first-hand, intimate, and educational experience into the art and science behind crafting the world’s finest bourbon. KDA launched the Kentucky Bourbon Trail Craft Tour in 2012 to showcase the state’s micro-distilleries. There are nine distilleries on the Kentucky Bourbon Trail and 11 on the Craft Tour.
The bourbon trails are experiencing record-breaking growth. Last year, the Kentucky Bourbon Trail had 762,009 visitors, and an additional 133,864 traveled to the Kentucky Bourbon Trail Craft Tour. Visitors came from all 50 states and more than 50 countries. Eighty-five percent of visitors are from outside Kentucky, and seventy-five percent came to Kentucky just for the Kentucky Bourbon Trail experience.
The official sponsor for the Kentucky Bourbon Trail is Louisville, and it also serves as the official gateway. Official trailheads are Lebanon, Lexington, Bardstown, and Shepherdsville.
The Kentucky Bourbon Trail partners with numerous events. One is the Bourbon Chase, an annual overnight relay race to Kentucky Bourbon Trail distilleries. This event has sold out in all of its six years, and consists of over 400 teams with an average of 12 participants per team. Another event is Bike the Kentucky Bourbon Trail, which provides scenic bike routes to all member distilleries. The Kentucky Bourbon Affair is a six day bourbon fantasy camp that provides participants with unique day events and rare insider access at KDA distilleries, and nightly events with distilleries in Louisville to showcase the city’s bourbon culture and cuisine.
Other KDA sponsored projects are Kentucky Bourbon Tales, the Kentucky Bourbon Festival, the Stave & Thief Society, and an exhibit at the Frazier History Museum entitled Spirits of the Bluegrass: Prohibition and Kentucky.
Ms. Baldwin discussed Senate Bill 11, which passed in the 2016 legislative session. SB 11 grants distilleries the ability to apply for a “nonquota type 3” (NQ3) license, which allows by the drink sales of all types of alcoholic beverages, raises the limit for bottle sales at distilleries from 3 liters to 4.5 liters per visitor, per day, and increases free samples of distilled spirits from 1 ounce per visitor to 1.75 ounces total per visitor. Eight distilleries have the NQ3 license, and many others are in the application process.
With the passage of Senate Bill 11 and the skyrocketing growth of the Kentucky Bourbon Trail, KDA created a task force to focus on strengthening the industry’s commitment to responsibility.
Responding to a question from Representative Miller, Ms. Baldwin stated that KDA has taken a formal position on its opposition to wine in grocery stores.
Responding to a question from Senator Girdler, Ms. Baldwin spoke about the partnership between KDA and the Economic Development Cabinet and how they work together when new distilleries are looking to open.
Trail Towns
Seth Wheat stated that the mission of Kentucky Adventure Tourism is to promote and develop opportunities for outdoor adventure throughout Kentucky by partnering with public and private entities to foster economic growth and physical health, with increased access to Kentucky’s vast natural resources.
Mr. Wheat discussed the Cross Kentucky Master Trail Plan, which is a statewide trails initiative that was released last summer. The plan’s purpose is to outline potential long distance connector trails all throughout the state.
The main reasons why the Kentucky Trail Town program was developed are economic impact, health benefits of outdoor recreation, and quality of life in the communities of trail towns. A trail town serves as a portal to a trail system, provides needed services to trail users, has knowledgeable staff, and reflects its culture.
The process for becoming a trail town is a local, grassroots initiative. The mayor’s office is the official applicant. There are 14 certified Kentucky Trail Towns, and over 40 applications in process.
There being no further business before the committee, the meeting was adjourned at 11:36 a.m.