Diageo’s Big Bourbon Bet

Feb. 1, 2019


Diageo is already a global leader in spirits, particularly in the Scotch category, where the international company owns beloved brands such as Johnnie Walker, Lagavulin, Talisker, and others. Diageo has spent years building its sterling reputation and unbeatable Scotch portfolio, and now the multi-national distiller looks to be turning its sights toward the world of Kentucky Bourbon. The latest Diageo news out of the Bourbon Trail has the company investing heavily in a brand new, $130 million state-of-the-art distillery facility in Lebanon, KY.

Bourbon is the New Frontier

Longtime observers of America’s Bourbon heartland will recognize that Diageo has lately been on the move. In recent years, Diageo brought on whiskey and bourbon impresario Nicole Austin to chart the future for George Dickel, and invested heavily in a new $10 million visitor center for tourists travelling to the Bourbon Trail to see operations like Dickel, Blade & Bow, or Tom Bulleit’s Bulleit Frontier Bourbon. The latest investment by Diageo will serve to support their existing operations in the area and signals that the titanic liquor company has the patience, and deep pockets, to become a major force in Kentucky bourbon.

"Bourbon and American whiskey are vibrant and growing categories and we are excited to expand Diageo's footprint in Kentucky to support our ambitions in this space," said Barry Becton, a senior executive at Diageo North America in a statement from the company. Diageo also pointed to forecasts for continued growth in the bourbon category in coming years, including Bulleit’s double-digit growth in the U.S. in the past year.

Diageo’s New Kentucky Homestead

The new distillery will be able to produce up to 10 million proof gallons per year — or 3.8 million 9-liter cases. The company said it plans to distill a variety of current and future bourbon and American whiskey brands at the new facility. The Shelbyville facility can produce up to 3 million proof gallons annually, or 1.1 million 9-liter cases, though there is room for Diageo to expand the plant.

The new facility, located about 65 miles southeast of Louisville in Lebanon, KY, will supplement Diageo’s Kentucky operations at their historic Stitzel-Weller distillery in Louisville, home to Blade & Bow, as well as the Bulleit distillery near Shelbyville. The new 144-acre facility, which will include a distillery, dry house, and warehousing, will break ground in the summer of 2019 and be fully operational by the first part of 2022.

Investment in the Future

Diageo currently employs around 100 people, full time, in the state of Kentucky, and this newest investment is expected to create another 30 jobs, according to the company. Job creation in rural areas, like Lebanon, is in keeping with the company’s “2020 Sustainability Plan” and their commitment to improving conditions in local communities, particularly where the company operates.   

Rep. Brandon Reed, of Hodgenville, KY, lauded the impact the investment is expected to bring. “New jobs and business growth are always good news in our rural areas,” he said. “More jobs and economic opportunity are the positive trends we continue to see ... and I’m excited about the economic opportunity that this announcement will provide to families in Marion County.”

In 2017, Gov. Bevin joined Diageo executives to cut the ribbon on the company’s Bulleit Distilling Co. facility in Shelbyville. The approximately $140 million, 30-job Shelbyville operation includes a 3 million proof gallon distillery and currently six-barrel warehouses. A new Visitor Experience at the site is scheduled to open to the public in summer 2019.

Lebanon’s Mayor, Gary Crenshaw, welcomed Diageo to Marion County and expressed excitement that the company will now share in the county’s vital history within bourbon’s history. “With Marion County’s rich history in the bourbon industry we are proud and humbled to add Diageo’s name to this evolving legacy.”

Breakthru Beverage Group is excited to see how Diageo’s bourbon strategy plays out in the next few years, but one thing seems certain: the brands that have brought them this far—Bulleit, Blade and Bow, George Dickel—will continue to be customer favorites in the years to come. And with the additional capabilities brought on with this facility, Diageo bourbons will be as easy to add to your business as Diageo Scotches are today. Talk to your Breakthru Sales Consultant to place your order and get in on the ground floor of the Diageo bourbon boom.

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