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When Bourbon Was Young, Kentucky was Born: Now a Race Toward Youth and New Markets

Ever since Kentucky fought for statehood in 1792, bourbon has been the special beverage along the early frontier of mid America.

Now after some 222 years, bourbon is about to once again become young in its marketing as new worlds discover its beauty.

For decades, drinking strong spirits in the old civilized world of Europe was about scotch, gin, fine wines. Every now and then, when one traveled to the tropic islands of the Caribbean, one drank rum. The most famous rums came from the Bacardi family.

In the twists and turns of a 21st Century, when traditional markets are collapsing to make way for new taste buds and wallets, the world of strong spirits is no longer held to traditions of centuries.

The latest case in point is the announcement that Bacardi Rum will be acquiring Kentucky based Angel's Envy bourbon.

Angel's Envy is a small Louisville based family owned distiller. The family of the late Lincoln Henderson, a legend in the Kentucky bourbon world, has agreed to sell the business to the Bacardi Family. Price is not known at this time.

As Cuba opens up to American business interests and tourism, families of the old Cuba and Caribbean Islands are looking north to America for new markets and new opportunities for generational growth among the youth.

The small Angel's Envy bourbon was such a target. This acquisition allows Bacardi to now have a door into the world of Bourbon worldwide sales and cultural tourism.

Angel's Envy will continue as a stand-alone operation, Bacardi said in a news release. That means the business structure, employee base, production, distribution, commercial and marketing activities will remain unchanged.

Wes Henderson, the chief operating officer, will continue as the brand's ambassador, and the family will remain involved in the brand. Henderson said Monday that he was euphoric over the deal, which has been in the works for a few months.

"Bacardi had been an investor in the brand early on, and it got to a point where it felt like it would be a great idea to take the next step," he said. His son, Kyle, will continue with blending and bottling, which has moved from Bardstown to a temporary site in Louisville down the street from the $12 million dollar distillery building, which is under construction.

There is no planned major expansion of the amount of Angel's Envy released until after the distillery is in operation, but eventually both the quantity and the number of batches or "expressions," will grow, Henderson said.

"Angel's Envy is blended in small batches of eight to 12 barrels. Each expression is allowed to develop naturally, creating nuances in the bourbon from year to year. There are three expressions on the market: a bourbon, a rye and a "cask strength" or undiluted version.

In 2013, when the distillery was announced, Henderson said it would be capable of producing at least 30 barrels a day; he anticipated that sales by 2016 would top 100,000 cases. Sales are projected at 65,000 cases this year, up from 45,000 last year, according to published reports.

Kentucky bourbon and Tennessee whiskey are more popular than ever, pushing distillers to keep up with demand. In 2014, exports of bourbon and Tennessee whiskey topped $1 billion for the second year in a row, setting a record at $1.02 billion, according to figures released Tuesday in New York by the Distilled Spirits Council of the U.S.

Whiskeys account for 70 percent of all U.S. spirits exports, which will hit a record high for the fifth year in a row, according to the industry's lobbying group.

Overall, U.S. spirits sales were up 4 percent in 2014 to $23.1 billion, with total volume up 2.2 percent to 210 million cases. The figures track sales by manufacturers to wholesalers and distributors.

At retail, sales were nearly $70 billion, generating more than $20 billion in taxes, the group said. For the fifth year in a row, liquor picked up market share from beer: spirits now account for 35.2 percent of all alcohol sold, compared with 47.8 percent for beer and 17 percent for wine.

Total bourbon and Tennessee whiskey sales topped 19 million cases, up a phenomenal 7.4 percent, or 1.3 million cases.

For 2014, bourbon and Tennessee whiskey makers (Louisville-based Brown-Forman, parent of Jack Daniel's, is the largest in this category) raked in almost $2.7 billion in gross revenue, up $234 million, or 9.6 percent, from the previous year.

The biggest growth -- 19.2 percent -- was in the super premium category, the highest priced brands, including Woodford Reserve and Knob Creek.

Those brands are the second-smallest segment overall but generate the biggest profits; revenue from the super premiums grew more than 19 percent to $325 million.

The bourbon market is on fire. Sales are shooting well ahead of production. With markets now exploding China, Southeast Asia, Japan, and Europe, new generations of millennials and Generation X'ers will add another 100 million new potential connoisseurs to the tasting and enjoyment of bourbon worldwide.

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