Kentucky Distillers' Association - Governor Matt Bevin Signing HB 400

It’s official, Kentucky, the state the produces 95% of the world’s bourbon, is now in the Direct to Consumer (DTC) shipping business as one more layer of Prohibition era law has been peeled away and Kentucky distilleries and their fans from around the world, could not be more excited. Distillers from across the Bluegrass as well as many state officials that helped to pen House Bill 400, commonly referred to as, “Bourbon without Borders” were on hand to watch Governor Matt Bevin ceremonially sign the new HB400 legislation into law. The event appropriately took place at the Frazier History Museum along Louisville’s famed Whiskey Row which beginning in August 2018 will be the official starting point of the Kentucky Bourbon Trail.

The No. 1 Question from Distillery Tourists – Can I Ship a Bottle Home?

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Distilleries from across the state were visited by more than one million people last year. Of those visitors, more than 70% were from outside of the state. Rob Samuels, Chief Operating Officer of Maker’s Mark and Chairman of the Kentucky Distillers’ Association Board of Directors, said, “By far, the most frequently asked question that we have received for years at the Maker’s Mark Distillery from our friends that have chosen to visit the distillery is, ‘Can we ship their bottle purchases to their homes.’ In fact, that’s the number one question at all Kentucky distilleries and this piece of legislation is now going to allow us to tell them, ‘Yes’ for the very first time.”

“This is a landmark day in the history of our timeless craft,” said Eric Gregory, President of the Kentucky Distillers’ Association that advocated for the law’s passage. “Ever since the KDA created the Kentucky Bourbon Trail tour, visitors have demanded the right to ship bottles home and to friends around the world.”

“We’re extremely proud of this bipartisan effort and offer our thanks to Gov. Bevin, legislative leaders, industry partners and most of all, our 39 members who are working in unison to strengthen Kentucky’s rightful title as the one, true and authentic home for Bourbon and distilled spirits.”

One More Step in Delivering on Kentucky’s Napa Valley Experience

Gov. Bevin hailed the new legislation as a bold step in modernizing Kentucky’s archaic alcohol laws. Bevin said, “Can you imagine the fact that you used to be able to come here, tour here, fall in love with the product and not be able to buy any and ship it home? Crazy! Crazy! Can you have imagined had that been the case in Napa Valley? This is becoming the Napa Valley of distilled spirits, it really is. Right here in the middle of America in a place that is beautiful, in a place that people come and fall in love with where the upside is far beyond what people would have imagined. It always makes me really happy when I hear people who’ve come here for the first time and they just gush about how they are blown away. Rather than living down sometimes as we historically have to peoples stereotypical impressions of us, we are upside surprising people to the degree that people want to come back. And I love it when people come back, they start on the Trail, and indeed part of what we are celebrating here and why we are here is because this is where it’s going to start here officially.”

Watch the video above to hear from Kentucky Distillers’ Association President Eric Gregory, Representative Chad McCoy, Kentucky Governor Matt Bevin, Maker’s Mark COO Rob Samuels, UPS VP of Public Affairs Nick D’Andrea and Louisville Mayor Greg Fischer.

During his term, Kentucky has led the country in reforming Prohibition-era alcohol policies, including new laws to allow the sale of cocktails at distilleries and to permit the sale of vintage spirits to attract more tourists and whiskey connoisseurs from all over the world. The ability to sell cocktails and mixed drinks at a distillery has quite literally changed the business model for many startup craft distillers. Prior to this change in the law, distilleries would roll up the carpet at 5pm. With the new law in place distilleries are able to stay open later into the evening and provide a whole new customer experience. Not only can they engage one-time visitors but local fans now have a reason to come back to a distillery again and again. Distillers have discovered an entirely new line of business that didn’t exist prior to 2016.

Direct to Consumer at the Distillery – In Person

The devil is in the details and there are certainly details that go along with this bill. The new law allows distilleries to ship visitors up to 4.5 liters which is six 750 ml bottles of spirits per person when they visit a Kentucky distillery. Guests also can sign up for “Bourbon of the Month Club” and receive unique shipments of Kentucky’s products throughout the year. And, it’s not just bourbon; it can be any distilled spirit from that distillery.

Visitors can only send bottles if the destination state allows alcohol shipments and the location isn’t a dry territory. Including Kentucky, there are now eight states plus the District of Columbia that allow direct shipment of distilled spirits.

The States that Allow DTC Shipments

Click the name off any state to see their distilleries.

  1. Arizona
  2. Hawaii
  3. Kentucky
  4. Nebraska
  5. Nevada
  6. New Hampshire
  7. North Dakota
  8. Rhode Island
  9. Washington, D.C.

Kentucky’s new shipping law is being viewed as model legislation which other states have already shown interest in adopting. Gregory said, “About seven or eight bigger states have contacted the Kentucky Distillers’ Association. States like California, New York, Michigan, Tennessee and Texas.” He added that KDA representatives will be attending the National ABC Administrators’ Conference this summer and may be on a panel to discuss the details. The KDA worked closely with UPS Airlines, which is headquartered in Louisville, on bill language that other states could use to ensure consistency for common carriers. Shipments are not allowed via the United States Postal Service.

“With this new law, UPS is pleased to tie the Kentucky Bourbon Trail into our global smart logistics network,” said UPS Airlines Vice President of Public Affairs Nick D’Andrea. “Kentucky is now leading the way in blazing a new trail for more states to follow, allowing more consumers access to enjoy great Kentucky spirits shipped by a great Kentucky company.”

Direct to Consumer at Retail – In Person, By Phone and Online

Let’s face it, not everyone is going to make the pilgrimage to visit the Kentucky Bourbon Trail. There loss but, that’s not the end of the trail. There’s another silver lining to this law which didn’t get a lot of coverage at the ceremony and that is ecommerce. Visiting a distillery is fantastic and all but the retail and ecommerce component could be even bigger. The new law also allows licensed alcohol retailers in Kentucky to ship direct to consumers. Same rules apply that it’s only allowed to the eight states and D.C. but, in these days of online target marketing, there’s sure to be a boon here. Time will tell but, this could be huge for retailers that can figure it out. The 2018 Advent Calendars just got a whole lot more interesting!

On a Lighter Note: The “Bourbon Capital of the World” Detente is Over

As the power of bourbon continues to grow, so does the chest thumping for the title of the “Bourbon Capital of the World.” The chief sponsor of the legislation Representative Chad McCoy of Nelson County, KY, could not help but remind folks that Bardstown is the rightful home and owner of the phrase, “Bourbon Capital of the World.” Nelson County includes six KDA member distilleries: Heaven Hill Distillery, Lux Row Distillers, Willett Distillery, Bardstown Bourbon Company, Preservation Distillery and Jim Beam’s Booker Noe Distillery. McCoy said, “I am the representative for Nelson County and, no offense to Mayor Fischer if he’s here, but we are the “Bourbon Capital of the World.” And I’m thrilled to be able to say that and thrilled to be able to be a part of House Bill 400.” Watch the video for the rekindling of the battle.

A bit of history – the Kentucky Bourbon Festival takes place in Nelson County, Bardstown, KY. The festival has been celebrating bourbons amber spirits every year since 1992. According to the states Trademarks and Service Marks office the phrase, “Bourbon Capital of the World” was first used in Kentucky on October 1, 1997. It was then registered by the Kentucky Bourbon Festival on October 10, 2001.

Louisville Mayor Greg Fischer had the last word on the ownership of phrase, “Bourbon Capital of the World.” Fischer said, “Representative McCoy, so, we had a little détente between Jefferson County and Nelson County until I understand you reopened it. I inartfully said several years ago that Louisville was the “Bourbon Capital of the World” and I was quickly reprimanded by then Mayor Bill Sheckles (of Bardstown) and we had a showdown of sorts so I see that beginning anew for us here so I look forward to that battle.”

A Bourbon Toast at 9:30am – It Must be Kentucky

Fischer then went back to his prepared remarks and offered a toast as 18 commemorative bottles from KDA Board member distilleries were loaded to be shipped around the state to key legislators and dignitaries. He cheered Louisville’s growing “Bourbonism” movement that has significantly boosted the local economy.

“This measure will help boost our growing Bourbon tourism industry by allowing visitors to our distilleries to ship bottles of our famous spirit home,” Fischer said. “It’s a win for the economy, and it shows what’s possible when we come together for the common good in the Commonwealth.”

The Bourbon Boom by the Numbers

Kentucky Bourbon is one of the Kentucky’s most historic and treasured industries, a booming $8.5 billion economic engine that generates as many as 17,500 jobs with an annual payroll topping $800 million and pours $825 million into tax coffers each year. In addition, the industry is in the middle of a $1.2 billion building boom, from new tourism centers to expanded production facilities, all to meet the growing global thirst for Kentucky Bourbon.

There are now 39 companies operating 52 distilleries in the state making 6.8 million barrels of aging Bourbon – all modern records. Distillers also paid a record $19.2 million last year in barrel taxes that fund critical local programs such as education, public safety and health.

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