Good Economic News, Thanks to Bourbon and Rye

Do you like business stories where American manufacturers enlarge their factories and add workers so they can increase production? Especially when a lot of that increased production is destined for export? Or when companies put new offices into a revitalizing downtown? That's what whiskey is doing for Kentucky and, in this case, her largest city, Louisville.

Heaven Hill has announced that it will increase capacity at Bernheim, its Louisville distillery, by 50%; increasing annual output to about 5.3 million gallons. This is Heaven Hill's second major expansion since it acquired the distillery in 1999. It is expected to be completed next year.

All of Heaven Hill's whiskey is distilled at Bernheim and transported by tanker to Bardstown, where it is barreled and aged.

Heaven Hill is also building a new visitors center, "The Evan Williams Experience," on Main Street downtown. It too will open in 2014.

A few blocks away, Beam is building its Global Business Services Center, expected to open in the next few months. Beam's headquarters are in Deerfield, Illinois, a suburb of Chicago, but the company's principal U.S. production facilities are in Kentucky.

The Global Business Services Center will combine select financial and human resources transactional activities into one centralized hub. The center will act as the primary point of contact for Beam’s North America business in the areas of benefits, compensation, accounts payable, payroll and other key business processes. It will employ about 60 professionals.

This is on top of recent production expansions at its Clermont, Boston, and Frankfort facilities, and a huge investment in a new visitors center at Clermont.

These are only the latest announcements. American whiskey is also helping the economies of Tennessee and Alabama.

Every community likes to see local businesses expand. What's unique about American whiskey is that there is so much mystique around Kentucky and Tennessee that the distilleries can't leave. At the very least, they need their distillation, aging, and tourism facilities there. But since those have to be there, and the state and local governments have continued to be supportive, it makes sense to consolidate other parts of the business there too.

Although air quality is sometimes a problem, Louisville has a high quality of life coupled with a low cost of living and a mild climate. There are certainly opportunities to attract more business from other companies that are in the whiskey business, directly or indirectly.

Much of the industry's current growth is driven by predictions of explosive sales increases in Asia, particularly in India and China. If all of that goes according to plan, the future for Kentucky is bright.