Kentucky Beverage & Food Industry by Ron Kapon

Kentucky has a hearty appetite for the food and beverage industry. More than 270 food and beverage operations employ nearly 43,000 people in Kentucky, and the past five years have seen almost 150 food and beverage operations move into the state or expand. 14% of Kentucky’s manufacturing is related to the food and beverage industry. In Northern Kentucky alone food manufacturers have created $250 million in capital investment since 1987.
“Kentucky Proud is the trademarked brand for Kentucky’s agricultural products that are grown and produced in our Commonwealth. The label tells consumers they are supporting our local farmers and they are buying the very best.” Kentucky ranks fourth in the country for number of farms, with over 85,000 and nearly 14 million acres of farmland. Farm sales in the Commonwealth average $5 billion a year. Kentucky’s borders are within 600 miles of more than 65% of the nation’s population. There are two international cargo hubs located in Kentucky- UPS Worldport at the Louisville International Airport and DHL at the Cincinnati/Northern Kentucky.
A number of well-known food and beverage products are made in the Bluegrass State, from Hot Pockets and Lean Pockets, produced by Nestle Prepared Foods in Mt. Sterling, to Kellogg’s Snacks, which makes baked goods for Keebler in Florence and Pop-Tarts in Pikeville. J.M. Smucker Co. produces Jif peanut butter in Lexington. Bel Brands USA has operations in Leitchfield that produce The Laughing Cow cheeses and Sara Lee pastries to megabrands such as Pizza Hut and Papa John’s.
Ninety-five percent of the world’s supply of bourbon is made in the Bluegrass State. In fact, the current 4.9 million barrels of aging bourbon outnumbers Kentucky’s population of 4.3 million. More than 9,000 jobs in Kentucky are connected to distillery-related enterprise. One of the ways the world knows Kentucky is through its bourbon.
In 2013, whiskey sales increased faster than those of vodka, gin, tequila and other spirits. According to the Distilled Spirits Council of the United States, the alcohol industry trade group, last year’s 3.6% growth in sales of U.S. whiskey was the biggest increase in 30 years. Bourbon surged 11.9 percent last year, the second year in a row for double-digit gains. Combined, bourbon and Tennessee whiskey exports grew a projected 5% to more than $1 billion last year. The industry lumps bourbon and Tennessee whiskey into one category. Both are produced in the same way and with similar ingredients.
Bourbon distillers are meeting the increased demand with new investment in their Kentucky operations. Gruppo Campari plans to invest approximately $48 million and add 62 jobs for a new packaging facility at its Wild Turkey Distillery in Lawrenceburg. Fortune Brands’ Jim Beam spent $18 million to upgrade its visitor center and make other improvements at its Clermont plant to accommodate the increasing visitor traffic to the six distilleries on the Kentucky Bourbon Trail. The company invested another $28 million to expand its bottling operation in Frankfort. Maker’s Mark, known for its iconic red wax seal, undertook a $70 million expansion to boost production, expand bottling capacity and make visitor center improvements at its operations near Loretto in central Kentucky. Woodford Reserve, which is owned by Brown-Forman, opened its expanded visitors center in Versailles to capitalize on the popularity of bourbon consumption and tourism. It is both the oldest and smallest distillery in Kentucky.
I was recently invited, along with six other journalists, to spend almost three days on a Kentucky Food and Beverage Tour sponsored by the Kentucky Cabinet for Economic Development. Our first stop was the Distilled Spirits Epicenter. It is an artisan distillery and education center for small-batch distilling. Housed there are: Grease Monkey Distillery, for testing formulations to running full productions; Moonshine University where one studies the methods used to derive, hone and layer flavors; and Challenge Bottling, a small production bottling line. Several artisan bourbon producers sampled their wares, along with ample hors d’oeuvres.
We had an inside look (the track opened just for out group) at Churchill Downs only 5 weeks after the Kentucky Derby. I was most impressed by the world’s largest (9 stories tall) Panasonic ultrahigh definition video screen that they turned on for our group. Newly appointed Executive Chef David Danielson regaled us with stories of preparing food and drinks for 160,000 people (120,000 Mint Juleps). We then sampled many of the desserts served at the Derby.
We started out our first full day very early with a tour of Clearwater Fine Foods. They are a subsidiary of a Canadian company of the same name. The lobsters are caught in Nova Scotia, packed and shipped to Louisville where they live in massive indoor salt tanks (the largest in the US) that resemble their native environment. By minimizing stress to the lobsters they can maintain the quality of fresh-caught lobster. They are shipped alive in containers that maintain their cold environment. Because of the UPS air hub they guarantee 99.9% on-time delivery to your favorite restaurant.
We next toured the KFC Test kitchen at their corporate headquarters. There are more than 15,000 KFC outlets in 109 countries and around the world serving some 12 million customers each day. KFC is part of Yum! Brands, one of the world’s largest restaurant companies with over 40,000 restaurants in more than 125 countries. Yum! Brands is ranked #216 on the FORTUNE 500 list with revenues of more than $13 billion. Their restaurant brands are KFC®, Pizza Hut® and Taco Bell®. We saw Colonel Harland Sanders’ original desk and memorabilia from his early days with the company.
We spent a fascinating hour at Brown-Forman (Jack Daniels, Woodford Reserve, Early Times, Old orester) cooperage where they produce over 1,500 barrels a day for their many products. The cooperage was opened in 1945 and even though much technology has been added I felt I had stepped back in time. We had lunch at Brown-Forman corporate headquarters.
We left Louisville for Clermont, KY and the headquarters of Jim Beam Distillery. Jim Beam is the best-selling brand of Kentucky straight bourbon and the 14th-best selling spirit in the world. This past April it merged and is now known as Beam Suntory with sales of $4.6 billion. It is the world’s third largest premium spirits company. Thirty family members of the Beam master distillers have worked at the company. After our tour we had a tasting with Fred Booker Noe III, a direct descendent of founder Jacob Beam. Other brands include: Maker’s Mark, Knob Creek, Basil Hayden’s and Old Granddad.
I had been looking forward to tonight’s dinner event since I was invited on this trip. Governor Steven Beshear and his wife Jane welcomed our group to dinner at the Governor’s mansion, built in 1914. The Kentucky Distillers’ Association served several brands of bourbon during the reception. In 2013 a record 571,000 people visited the Kentucky Bourbon Trail. The governor and his wife made us feel so at home we felt as if our group had known them for years. They even posed with a copy of my bourbon article in Cheese Connoisseur Magazine. Governor Beshear is term limited and will be retiring in 2015. One of his great successes has been the signing of 413,000 Kentuckians for the Affordable Care Act (Obamacare).
Our first stop on our last day was at Ale-8-One bottling facility. Ale-8-One is a soft drink unique to the state that has been bottled in Winchester since 1926, and its sodas are sold in Kentucky, Ohio, Indiana, Tennessee, Georgia and Alabama. “It’s like the loyalty shown to University of Kentucky or University of Louisville basketball teams. Kentuckians back Kentucky products.” The name Ale-8-One was the result of one of the nation’s first slogan contests. Still family owned the drink formula is on hand-written notes.
The Kentucky Horse Park is Kentucky’s largest state-owned tourist attraction. The park is dedicated to sharing the Commonwealth’s love of horses with the world. Featuring dozens of different breeds of horse at work and at play, the park showcases the horse in daily equine presentations, horse drawn tours and carriage rides, horseback riding and pony rides, a movie presentation and an exciting array of horse shows and special events. The International Museum of the Horse, an affiliate of the renowned Smithsonian Institution, is the largest of its kind in the world. Other popular activities include trail rides throughout the park’s beautiful countryside and pony rides for youngsters. After the tour we had a buffet lunch there before heading for Northern Kentucky.
In the late summer of 2014 Newly Weds Foods will complete a 326,000-square-foot food production facility in Northern Kentucky. We toured the unfinished building. Here is what I found on the company. Newly Weds Foods recognized the potential of the frozen food industry in the early 1950s and pioneered bakery-based technology that could withstand the rigors of freeze-thaw and longer distribution cycles in batters and breading. They became the top producer of customized food coatings in the United States. In 1977, they introduced Japanese-style bread crumb (Panko) technology to the U.S. This crumb’s unique “slivered” appearance and crispy, yet tender bite quickly made it the go-to breading of culinary professionals as well as the preferred breading for home chefs. In 2014 they launched Kitchencounters, the global culinary connection to key taste centers around the world. The Kitchencounters program will allow customers to conduct real-time discussions with leading chefs throughout the world.
Our last stop was Zoom Essence. Founded in 2008 it manufacturers dry flavors and food ingredients, with more than 300 types in various snacks, vitamins, supplements, soups, coffee and tea. The company provides flavors for beverages, confectionery, snacks, sweets, soup, sauces, baby food and pet food. Spray drying is the production of highly dispersed powders from a liquid emulsion. These powders are commonly used in the food, beverage and pharmaceutical industries. Utilizing our patent pending DriZoom™ technology, ZoomEssence delivers liquid quality flavors & ingredients in a powder form. If you think I understand any of this you are mistaken.
Some of us were dropped off at the Cincinnati/Northern Kentucky airport and the rest were driven back to Louisville. I should have chosen the later since I did not get back to NYC until the next afternoon. But that is for another article.