In September 2014, a bourbon brand called Kentucky Owl began to appear on liquor-store shelves around Louisville, Ky. The American whiskey market was booming, and dozens of new bourbons were showing up each year.
But Kentucky Owl was different. Released exclusively within the state in tiny quantities and produced by the scion of an old Kentucky whiskey family, it had an undeniable mystique -- and a price tag of $170.
To skeptics, Kentucky Owl was proof that the whiskey trend had reached its peak. At the time, few bourbons commanded even $50 at retail. Plus, the man behind the brand, Dixon Dedman, didn't even make the whiskey himself; he bought barrels from other distilleries, then blended them. Surely the bubble was about to pop.
It didn't. Within a few weeks, nearly every bottle of Kentucky Owl had sold out. On the secondary market, flippers were asking -- and getting -- five times what they had paid in stores. "Before you knew it, before anybody had reviewed it, you had people camping out to buy a bottle of Kentucky Owl," said Fred Minnick, the editor of Bourbon+ magazine and the author of Bourbon: The Rise, Fall and Rebirth of an American Whiskey.
Several factors gave Kentucky Owl a boost. It had heritage: Dedman, whose family runs a century-old inn popular with bourbon fans, named it after a long-defunct brand created by his great-great-grandfather. Early hype by retailers, along with rumors about the source of the whiskey, also built early interest.
Above all, Kentucky Owl debuted at a moment when whiskey fans, flush with money from a surging heartland economy, were willing to pay extra to get the next hot thing in bourbon. Soon, Kentucky Owl had achieved cult status -- and signaled a fundamental change in the American whiskey market.
"People have called us the Screaming Eagle of bourbon," Dedman said in August, referring to the $3,000-per-bottle cabernet sauvignon whose debut, in 1995, represented a shift toward stratospheric luxury in the Napa Valley wine industry.
Not that he's complaining. In January 2017, less than three years after introducing Kentucky Owl, Dedman and his business partner sold the brand to SPI Group, the Luxembourg-based company best known for making Stolichnaya vodka, for an undisclosed sum rumored to be in the high seven figures.
Six months later, the new owners revealed plans for a $150 million "Kentucky Owl Park" in Bardstown, an hour southeast of Louisville, featuring not just a distillery but a convention center, two lakes and, eventually, a luxury hotel. The company broke ground in November 2017, at an event attended by Gov. Matt Bevin, and it plans to open the first phase of the site in 2020.
The brand's rapid ascent took Dedman by surprise. "I never had a vision for how fast this thing would grow," he said.
You could say the same thing about the Kentucky whiskey industry itself. Although the bourbon market has been growing for almost two decades, a transformation has taken place in the past five years, a reshaping of the industry's potential that most people didn't see coming and are only now starting to grapple with.
Between 2012 and 2017, sales of bourbon whiskey -- 95 percent of which is made in Kentucky -- soared by more than 50 percent, to $3.3 billion. To keep up with demand, nearly two dozen new distilleries have opened in Kentucky in the past five years, including three around Bardstown, a town of 13,000 that sits in the center of bourbon country. Established companies like Beam Suntory and Brown-Forman are undertaking hundred-million-dollar capital projects, while scores of new rickhouses -- the enormous warehouses used to age whiskey -- dot the rolling hills around Louisville.
SundayMonday Business on 01/06/2019