FRANKFORT, Ky. — It’s a great time to be in the bourbon business – so says a new economic impact study that shows the industry booming over the last two years and nearly doubling in workforce size.

One doesn’t have to be a bourbon lover to love what it’s doing for communities that call themselves home to those distilleries, be they major, well-known places or newer establishments. The study, released by the University of Louisville’s Urban Studies Institute in conjunction with the Kentucky Distillers’ Assoc. (KDA) and the Kentucky Agricultural Development Board, reported the number of state distilleries has tripled in two years and set major new benchmarks for payroll, tax revenue, exports and barrel inventories.

That includes making a major impact on local agriculture sectors. Eric Gregory, president of the KDA, said part of what the study did was to look at those local ties.

“We also wanted to benchmark where we stood on the grains issue, because we know we use a lot of corn and we’re using more corn than ever before, but how much of that is locally sourced  corn verses corn from other areas?” he said. “We found that about 40 percent of our grains were coming from Kentucky farmers.”

He said the overwhelming majority, if not all, of the newer facilities are using 100 percent Kentucky grains. “We have started looking at what some of the obstacles are for some of the bigger facilities to use more locally sourced grain.”

One issue is many of the large, well-established distilleries have used the same grain contracts for 70 years and making a change is feared to make a change in the way an individual bourbon might taste.

“We’re going to be working closely with the Kentucky Corn Growers Association and the Governor’s Office of Agricultural Policy and probably the ag commissioner’s office, to see if we can get all of these sides together and talk to see what we can do to source our local grains,” Gregory said.

According to the study, several distilleries have voiced a desire to get more grain from Kentucky producers, depending on price and quality requirements, including corn from non-genetically modified seeds. As it stands now, the local grain used by Kentucky’s distilling business supports 1,500 jobs and almost $60 million in farm output.

Kentucky producers could supply as much as 80 percent of those grains, which would double that impact. In return, state farmers are getting an estimated $2.5 million worth of spent grains to feed their livestock from distilleries, most of which is given away. The report noted the distillers produce enough spent grain to feed 90,000 head of cattle a year.

Bourbon brings about $3 billion into Kentucky’s economy, something that benefits everyone, said Gregory. In the next couple of years another dozen distilling operations could open around the state. Currently there are 31 distilleries located across Kentucky, the most since Prohibition.

But if there is anything to be concerned about, it could be the fact other states are also seeing increases in the number of distilleries. In fact, Kentucky only ranks eighth in the number of distilleries.

“There are more distilleries in places like Colorado, Washington, Oregon, New York and California than there are in Kentucky,” said Gregory. “We are concerned as an industry, and I think as a state that we don’t want to fall behind. Right now we make 95 percent of the world’s (bourbon) supply, but what happens if that slips to 90 percent or 85 or 80 percent? Suddenly we’re going to lose those jobs and investments to other places.”

He said it’s something the industry is conscious of and he thinks there is room to grow and attract a lot more of the next generation of distilleries to Kentucky.

Since its release, the economic impact study has been the buzz of the state capital. Gov. Steve Beshear said the report proves the bourbon boom is producing results for all Kentuckians.

“We all knew the bourbon renaissance was taking this iconic industry to new levels, but this data is absolutely phenomenal,” he said. “The amount of progress is unrivaled and unparalleled.

“At the same time, it’s clear that we still have work ahead of us. We have the most distilleries since Prohibition, yet we’re losing ground in attracting new companies as other states modernize their alcohol and tourism laws to make it more appealing to locate there.”

Beshear added the state must continue to help the homegrown bourbon industry, entice this next generation of distillers and strengthen Kentucky’s rightful place as the one, true and authentic home for bourbon.

During a press conference to announce the study findings, Joe Fraser, chair of the KDA board of directors, said he wondered what Kentucky’s distilling forefathers would think about this news.

“I’ll bet they never dreamed that bourbon would one day be a $3 billion global industry, and that people from all over the world would travel to Kentucky just to see how it’s made,” he said. “When we look back 50 years from now, I think we’ll find that Kentucky was just entering the Golden Age of Bourbon, and the best is yet to come.”

This new study is the third since 2010 and is the most comprehensive analysis conducted on the economic and fiscal impact of bourbon and distilled spirits in Kentucky, said Gregory: “To be honest, we’re all blown away by the findings.”

To view the complete economic impact study, go the KDA website at www.kybourbon.com