250 - The Future of Bourbon with Eric Gregory, President of the KDA

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The Kentucky Distillers’ Association does more for bourbon in the US than just Kentucky alone. Eric Gregory, the President of the KDA, has been on both sides of the government trying to put the interests of the distillers and consumers first. We talk about his experience with government lobbying and how he revived the organization. What is the future of bourbon? Are distribution laws changing, what will happen with tariffs, and how will the Bourbon Trail maintain growth?

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Show Notes:

  • This week’s Above the Char with Fred Minnick talks about up and coming writers.
  • Tell us about your background.
  • What was it like at the KDA when you first got this job?
  • What was your first lobbying experience at the KDA?
  • Any good horse racing tips?
  • How do you see bourbon growing?
  • What do you think of the tariffs?
  • Tell us about the lobbying process.
  • How do you keep it bipartisan?
  • When you hear rumblings of new taxes what do you all do?
  • Tell us about the steps you have taken from the promotional side of the Kentucky Bourbon Trail and the Kentucky Bourbon Affair?
  • How many trail visitors did you have the first year?
  • Talk about partnerships.
  • What are some of the weirdest requests you've gotten from people?
  • Are there other states that look to your organization for guidance?
  • What is your position on the secondary market?
  • Why do so many people oppose shipping alcohol?
  • What do you think about bourbon tourism growth in Bardstown vs. Louisville?

0:00 How many visitors Did you have at that time?

0:01 The first year we did the passport in 2007. We had 189 people complete the Kentucky bourbon trail

0:10 and send them a pin.

0:23 Hey, it's Episode 250. Another big number mark and we're glad you're still here with us. And well, it's not much has really been going on because of COVID-19. It's putting a stop on pretty much everything except delivery services. And that's where we start this week's news alcohol delivery app drizzly says it has seen sales explode in the last week of March climbing 537% above the company's expectations. What's more is that 42% of those orders came in from new accounts. The company says that new buyers on the platform have jumped 900% year over year. Same goes for minibar, sales are up 143% new buyer is up 547% and quarters are up 100% with an average order size up 22%. If you haven't had the chance yet, go listen to our podcast back on episode 248 when we had drizzly CEO and founder Corey rellis on the show to talk about his business. A recent study by economics at john Dunham and Associates estimates that America's wine and spirit wholesalers can expect to lose up to $921.4 million in uncollectible or difficult to collect receivables, due to on premise accounts such as restaurants, bars and clubs that have been impacted by the shelter in place environment, and Massachusetts craft distillers are urging their governor to allow permission to deliver spirits. The Massachusetts distillers Alliance asked Massachusetts officials to take steps similar to those made in a handful of other states, such as California, New York. Washington, Kentucky and Virginia to eight independent distillers that are struggling during the current crisis. In a quote by the Alliance's board, they wrote we pay over two and a half times the rate of excise tax per proof gallon paid by brewers. Yet during these challenging times greater latitude is being extended to restaurants, breweries and wineries. While our businesses remain bound by the rules and laws that put us at great financial risk. We have a significant struggle ahead for some good news, and you all are the first to hear it because we are putting on a free online bourbon conference called whiskey from home happening on May 2 2020. Starting at 12 o'clock pm eastern This event will be streamed live through multiple properties with speakers from the entire castle the roundtable but also Peggy knows Stevens. It's bourbon night, the bourbon review, dad's drinking bourbon and more will have live seminars, panels, virtual tastings. The list goes on or incorrect credibly excited to bring more of this great content to you all. And if you can, please share it. Spread the word. Let your bourbon friends know, let your bourbon societies know let your friends that aren't into bourbon and want to get into bourbon know about it and family as well. This is a full five and a half hour jam packed event that will be streamed live, and you will get the chance to network with other people in real time and ask questions through chat. Go to whiskey from home comm and register today for your free ticket. Now for today's podcast, I was super excited to interview our guests. The Kentucky distillers Association does more for bourbon in the US than just Kentucky alone. Eric Gregory, the president of the KDA has been on both sides of the government trying to put the interest of the distillers and the consumers First, we talked about his experience with government lobbying and how it led him to reviving an organization that was struggling. He's maneuvered the KDA into a model that other states can follow. So we discuss what the future of bourbon looks like. Where the laws changing with the regulation of distribution? What's gonna happen with the tariffs and how will the bourbon trail maintain its current pace of growth? All right now Don't forget it. Whiskey from home.com go register now to get your free ticket. I also talked to Joe from barrel bourbon this week and he has a special message he wants me to share that will lift your spirits. You can now buy barrel craft spirits products and have them shipped right to your door. Just visit barrel bourbon.com from the comfort of your home and click Buy now. Alright, here's Fred MiniK with above the char

4:37 I'm Fred MiniK. And this is above the char. This week's idea comes from Kyle man or at bourbon numbers on Twitter. He writes nothing better than expanding my whiskey perspective. Are there any up and coming writers in bourbon that deserve the above the char spotlight? Or are there any underrated sites we should add to our family favorites. Thanks. Listen, there's nothing I like more than promoting good writing and a perspective that is different than mine. Listen, I am a big, big fan of the cocktail walk. Now I as you know, I am a big rum head. So I would I would get you to start with the cocktail wonk. That's Matt Patrick. He actually writes for me at bourbon plus, he writes the vintage column and that is a writer, you need to check out he wrote the book, The Tiki minimalist. So that is a great book. He's a great guy. And if you're wanting to learn more about another spirit, rum is the one I would recommend going to of course, I wrote a book called rum curious and Matt edited that for me. So I'm a big fan of Matt and everything that he does for the rum community. After that, I would say if you're not already following him, whiskey jug is a young up and coming writer. He's been at the game for Little bit of Joshua Peters is a. He reminds me a lot of myself about 10 years ago when I was out there kind of investigating and trying to break news in the whiskey circuit. he's a he's a very good, he's a he's a very good no bullshit kind of writer. So I'm a big fan of what Joshua Peters is doing. I think he's got he's got a bright future ahead of him. And I also wanted to ask you to go and check out the classics, the writers who are no longer with us. Gary Reagan wrote the book of bourbon, probably one of the one of my heroes in the, in the bourbon world. He because he kind of came at bourbon in a very similar fashion, as I did, but he was a bit before his time, and he broke into like, he broke away from bourbon a little bit and made his own bitters and kind of got a little bit more into the cocktail movement. And then you have the greatest whiskey writer of all time, in my opinion. Michael Jackson. Michael Jackson, the guy with the glove and the jacket and the weird stuff, I'm talking about Michael Jackson, the beer, the beer critic and whiskey writer. His words just flew off the page. And we're just so beautiful. So check those writers out. I'm a big fan of all of them. And I think they can all add to your perspective. But at the end of the day, it's about whiskey is about an experience for you. While the writers, the bloggers, THE podcasts, were all about bringing the information. We're all about trying to explore this community with you. At the end of the day, it's about you, and what's in your glass what you like, and what conversation Do you like to have around whiskey? So thank you for the question, Kyle man or at bourbon numbers on Twitter. Now that came in on April 4, when I asked people to send me their ideas for above the char. I love getting a good idea. So hit me up on Twitter. Twitter, Instagram, Facebook, or go to Fred medic comm and send me your idea. But that's this week's above the char until next week. Cheers.

8:15 Welcome back to an episode of bourbon pursuit the official podcast of bourbon. Kinney and Fred on the road today down in Frankfort. The you know, it's always funny. There's always a good joke that says How do you pronounce the capital of Kentucky? Is it Louisville or Lewisville? And they're like, Nope, it's Frankfort.

8:30 Yeah. You know, hopefully our guest today is part of a campaign to move it to Louisville, you know,

8:35 oh, well, I mean, they just got this new place that we're sitting and that is true.

8:38 That is true. Well, so this is where at the headquarters of the Kentucky distillers Association. And you know, 15 years ago, these guys could not get a meeting with a lot of the legislators. Now one of the first calls a new governor makes is to the KDA because bourbon is political capital and I believe that the Kentucky distillers association is the most powerful lobby in Kentucky. And that was confirmed to me by the Senate Majority Leader, David Thayer. I asked him, I was like, hey, how powerful is the KDA? They're like, and there's really not anyone more powerful right now. I mean,

9:15 is it basically coming from all the taxes from? Well, like it's fun and back in the mistake, let's take a look at what bourbon has

9:21 done for the state. It's really one of the only good conversations that people can have when they're talking about Kentucky you got the derby but the horse industry has been falling for for a while. I mean, it's that's a signature industry and it's it's been hurting. Yeah, getting the gambling, you know, they're trying to bring it in, but Ryan keeps getting denied. And the coal industry is turned to us. Sadly, I mean, it's not. If you look at Eastern Kentucky, it's hurting. And bourbon is the one thing that's kind of carrying the state forward. And one of the reasons why is because of the man we have sitting here and what the KDA has done for the last 10 years. In 2009 you know, when there was a new sales tax Taxes coming in. They protested. And they poured whiskey on the state capitol steps in the way of their protests. And they've been every single year, they have been peeling away ridiculous laws county by county and in the state and in town by town. And that's why we're able to like have a sip of bourbon while you visit a distillery a mean people don't realize that it wasn't that long ago that we didn't have tours, these guys created the Kentucky bourbon trail. So that is why everybody who's listening to this should be thankful that we have someone like this who has their interests at heart fighting for them in the bourbon industry.

10:44 In Frankfort. Yeah, there's a there's a lot to go over today. And with all that, I mean, taxes, tariffs, you name it. So we'll we'll get to a little bit of that. But you know, we'll first introduce our guests. So today on the show, we have Eric Gregory Eric is the president of the Kentucky distillers Association better known as the KDA. So Eric, welcome to the show.

11:00 Well, thank you, you, you guys are making me blush here. So thank you for the kind words. And I've got to say, we obviously couldn't do this without strong support from our membership. So let me lead off with that we appreciate and value all of our members. And they say guess before

11:15 we before we kind of dive into the KDA in the membership and really what the key days mission is like, let's kind of talk about you real quick. Like, where's where's your background? Where'd you come from? Did you I mean, were you part of, you know, moonshine and you said you know what, I'm gonna go ahead and make this legal and get off

11:31 get into business. I this I liked where you were moonshiners?

11:33 No, no, no, no, I grew up in the cornfields of Western Kentucky. My parents ran a grocery store. My dad was a huge Maker's Mark fan and my mom like ofits and in the 1970s I mean, I could still you know, see in my mind's eye my dad coming home every day from work, boring him little makers and in a glass with one cue, my mom Love ofits and some sprite or some ginger ale and then go on the back porch and sit and that was their time and they talk about their day and have a drink. And so it was just always surveillant in and in our household. So no, really just, I'm the luckiest sob in the world. I started my career many people know as a reporter, with the Lexington Herald Leader newspaper, spent eight or nine years there, immigrated to Hawaii for a couple of years and worked at the Honolulu advertiser. Oh my God, why would you come back here that everybody asked me, you know, how crazy are you? So have you ever lived in Hawaii? It's a great place to visit but it's really really expensive. And it's pretty far away from family. And, you know, once you get over there and you realize that everything that you love deer in the world, to me was in Kentucky and not only my family, my wife's family, but I'm a huge Cincinnati Reds fan. I love Keeneland I love the horses. I love Berman. I love UK basketball and they just want a championship without me and Kentucky and things and the tug of home really starts kind of, you know, getting pretty strong. So since those

13:14 those you'd be late night tip offs, right, I mean, if you're sitting now I

13:18 will do a six hour time difference. I'm sitting there having lunch, you know, at the local bar. And in watching the games that was kind of kind of crazy. But move back to Kentucky work for the paper again for a couple of years, went into political consulting. After that one of my jobs in the newspaper was covering the state legislature and back then the limit every two years. For 60 days. A happy channel used to say that he wished the legislature met every 60 years for two days instead of every two to two years for 60 days. So I covered them and I kind of had the political bug a little bit so when political consulting and public relations running campaigns in Kentucky, Indiana and Tennessee That led to one of my clients was the electric power cooperatives and doing lobbying and things for them and they ended up hiring me as their GM lovers manager. So I spent almost eight years working here in Frankfurt is their contract lobbyist, and, and September of 2007, I got a call from one of my best friends. He said, your dream job just opened up. And I said, What's that? He said, the president of the Kentucky distillers Association, he said they want somebody with a media background check. They want somebody with public affairs, government affairs background check. And they want somebody with lobbying experience to check and I love their product. So check that check. But in a resume, three and a half month interview process, Oh, wow. And they they offered me the job on December 7. And it's funny because they asked me in my last interview, how long do you think you'd stay at KDA Acid Are you kidding me This is like the best job in the Commonwealth outside of UK basketball coach you know where President a church on downs or something like that you I said I'm here as long as you'll have me You can drag my cold dead people body out of that chair someday but but we haven't slowed down since it since taking over it is been an amazing run so far

15:18 I kind of want to kind of want to give a little bit of a historical perspective here about the KDA. At this juncture Go for it. It was not really an organization that was known for doing anything or getting anything done. And no offense to interior history, but they didn't do anything. You know, other than like some some efforts in the 1800s and the 1950s. They were mostly just kind of a drinking club of the distillers getting together and they just, they just let things be dictated to them. And I'm curious because everything changed when Eric took office. And you know, Bill Samuels, Jr, who's the longtime Maker's Mark Chairman, has told me many, many, many times is that A lot of the growth of bourbon is because of this man and his leadership for the KDA. So I'm curious, you get the job, what are those first 40 days? Like, what are you assessing? And how are you? What are you looking at?

16:13 Well, it's funny, because the job description in those conversations, they were saying things like, you know, we'd like you to, you know, can you promote this bourbon trail thing we've got going on and, and I went into one of the the meetings and the interviews, and the New York Times had just done a front page travel section feature on the Kentucky bourbon trail, and actually held it up at the at the interview and said, What did y'all do to get this? And they literally said, Well, I don't know a reporter just showed up one day and like, you're getting front page travel sections in the New York Times without drying. You know, you don't know what you've got here. This is amazing. So, yeah, that first 40 days was really transitioning. My predecessor, a great man senator, former state senator Daniel out of Springfield have I don't think is enough credit back in the 70s and 80s when he was a state senator, he really worked hard to keep the ad valorem barrel tax issue from just exploding and driving a lot of distillers and those aging warehouses that Sandy out of Kentucky. And really, you know, he was running the KDA out of his law office in Springfield. And most people don't know that Katie went part time in the 1980s Oh wow. Because bourbon you know, had taken it on the chin and most people had written it off as Matt Shapiro said to the great liquor store in this guy and there was not much you're right for the KDA to do so. He You know, he but Ed for saw the the bourbon revolution coming and the Kentucky bourbon trail picking up speed and said you need a full time staff again. And so that's that's where I came in. So yeah, that first 31st 3040 days was really quite frankly kind of relaunching the association from scratch. We had to find an office in in Frankfort. We moved our operations here from here was running it out to get him his law office in Springfield, Washington County, find an office. After three or four months, I was allowed to hire an executive assistant and just got thrown into a legislative session, you know, with no idea. We need to come up with priorities. And you know, just really, like you said, start to get the KDA build an image bank among the legislators that we're here and we're lobbying and we're not asleep at the wheel anymore,

18:28 quite frankly. Can you remember that that first lobbying experience you did for the KDA?

18:33 Oh, yeah. They started talking about tax raising taxes in 2008. And myself and the wholesalers Association, and the retailers all went in and started talking to, to the legislators because they had just raised our taxes in 2005, wholesale taxes went from 9% to 11%. So we went in and say, Look, as you just, you know, raise our taxes a couple years ago. You're Gonna do it again and we fought it back that year and 2008 but then it came, you know crashing down upon us is very mentioned in 2009. But, again, I was doing all this I'm a bourbon geek. First of all, I'm a longtime bourbon geek. I'm one of the people that stood in line and you know, outside of liquor barn waiting for the different wax colored bottles and whenever bill Samuels I was one I am one of the first before I took this job, I was one of the first bourbon ambassadors at Maker's Mark. I worked my way through college at a liquor store right before Keeneland All right, what bottles were you stashing away back? at you know, we hidden makers gold that was really about the height of bourbon back then, but I remember vividly when we got the first bottles of Blanton's in the liquor store, and they were $35 and we were like Who the hell in their right minds gonna pay $35 for about a bourbon you get makers for 10 over here, right you know and Because we were the last liquor store before Keeneland in the airport, Toyota had just opened up and all the Japanese executives would stop at our liquor store and stock up on bourbon that before they got on the plane to take back home, and they fell in love with blends, and they love the bottle and the horse on top of the bottle. And so every Friday night, when they were making their rounds back to the airport to go home, there was a line of camrys waiting at the draft through and I knew I had to have cases in cases of Blanton's there and I would just go out and load them in the back of the car and they hand me over the cash and go so is more and more of the small batch really the bean products, the small batch selections, the you know the the knobs and things like that as those started rolling out. I had to really become more knowledgeable about what was coming out for our customers at the time. And so my friends all kind of, you know, kidding me about them being the bourbon geek and in teaching about that. So that's awesome. It really

20:58 does run through your veins.

21:00 You know and again and I got a lot of great tips track tips you know from the trackers coming in I think between that and you know that kind of kept me in school paid for for

21:12 me people can say that they made their way through college just like having a good few bets here and there right?

21:18 Especially my bets I guess what's your percentage on on betting?

21:23 I do. I don't do it anymore. You know when you've got young children Fred so once you your children start growing up and I've got you know, I'm putting my first into college later this year and then my son who is getting ready to turn 16 I got to get a car for him and everything else. My sister works at Keeneland and so you know there every now and then I'll get her to place a bet for me, but, boy, my bidding has gone down exponentially is a head start.

21:55 And he said a more attention and he's like winning by that by that.

21:58 Yeah, what's the best bet is Keep your money in your pocket, right? Yeah,

22:00 exactly as I'd say, if you do have a good horse racing tip, what would it be? Oh, wow, you are gonna go bet.

22:08 You know, I'd probably have to have a form with me, you know, to answer that question. Again, I really used to study that form. And there was a group of us former reporters who are now lobbyists and in everything up here who would hit kealan all the time. So I'm big on Kentucky born and bred, you know, I do get a lot of great tips from from my sister who sees them come through as yearlings, you know, in the Keeneland sales and stuff like that. But mainly, I look at bloodlines, you know, a when a family coming down the form the first thing I'll do is start circling but bloodline so that know that that'll be a good, you know, and then you get to look at, you know, how long it is. And if they're closer. I mean, there's just, I don't know,

22:54 that's a that's a good one. It's nice.

22:56 The Kentucky way, right. Yeah.

22:58 My dad's tip, he said Always circle, the ones that were the owner and the trainer are the same person because he was like they put a little bit more effort into that that horse. Right. That's a good point. That's, that's that's his little tip. But yeah, I like to go ahead and try to run with it again, you're still gambling at the end of the day. So let's go ahead and kind of want to shift gears a little bit and kind of talk about the growth of bourbon and kind of really, where have you seen it? And kind of, you know, you've been a pretty instrumental part of this. And so a few months ago, there was a press release that came out about now that there are more barrels of spirits aging Kentucky than there are people, twice as many, twice as many barrels twice as many. You're right, twice as many. Yeah. So kind of talk about like, Where, where do you kind of see the evolution of this going? And like, do we expect three x four x now coming here in the next two, three years?

23:44 A short answer? Yes. I'm typically pretty optimistic about that. I guess the biggest challenge that we faced are the tariffs, the retaliatory tariffs that are put on us. Because you know, everybody asks y'all, you know, what's feeling The bourbon revolutionary thing and we all know, you know, the rise, the cocktail culture, the madman effect. I think bourbon tourism has been has played a big part of that maybe a bigger part and most people understand the fact that we're just putting out some of the best juice that the Commonwealth has ever delivered, again is good. But really the opening of the global markets to me has been one of the if not the driving factor in the growth of Kentucky bourbon, because the I don't think it's any coincidence that back in the mid 1990s, when we had NAFTA and the EU treaties, that's when you start to see the spike in production, and the you know, the growing global thirst, but because we're fine, we were finally on a level playing field with our friends in the scotch industry who've had a 600 year head start on us. So, yes, you know, we have seen bourbon growth exponentially in the past five years. We're currently in the middle of a $2.3 billion capital investment spree. And most of that is Pre production for that, for that global market. We've you know, especially to the EU, you know, in the past three to four years, you're looking at 20 to 30%, even I think two years ago was 43% growth every single year to the EU market. And so that's when we got the call 18 months ago that the tariffs were starting to be used as pawns in a trade war that none of us saw coming. My first reaction was damn we made it we're being used as pawns in a trade war, then that was that was oh my god. Now we're really, you know, what are we going to do now? I really do believe that. You're going to continue to see growth and a lot of people ask us after that press release came out, you know, because not only do we have more than 9 million barrels aging right now in Kentucky. We filled 2 million barrels for the first time in the modern era of Kentucky bourbon in 52 years. And you know, we'll we thought the tariffs are hurting wires. Are you feeling that many barrels and begin the blessing and the curse of Kentucky bourbon is you can't make it overnight. So administration's change, you know, you're looking six, eight years out, hopefully this issue would be settled. But, you know, if the EU market which is almost half of all of Kentucky's whiskey exports, if that continues to escalate, as it has with the new tariffs on scotch whiskey, then you know, to me, that's a game changer. You know, it's, it's something that could really have long term effects if we don't get this resolved pretty soon.

26:35 And you're you're pretty knowledgeable person on this particular subject. And there is people that talk about this all the time. But when it talks about tariffs, they talk about exports, and they have this very narrow minded view and they're like, that's fine. More bourbon here in America. kind of tell people maybe they I don't believe that's right, but kind of give your kind of explanation rationale on that.

26:57 Yeah, well

27:00 Well tariffs or taxes First of all, and in we'd like to say there are no winners in a trade war. You know, there's no really good way out of this because what most people don't understand is when bourbon took a nosedive most of the bigger distilleries diversify their portfolio so they own a scotch whiskey distillery or an Irish Whiskey distillery, a Canadian whiskey distillery. Tequila distillery. And so that's when you saw the tariffs, you know, enacted back, you know, it wasn't just you. It was Canada and Mexico, and other places as well. A company like brown Forman or Jim Beam that owns multiple distilleries across the world. They're not only taking a hit on the retaliatory tariffs on Kentucky bourbon. They're also taking a hit now on scotch whiskey and Canadian whiskey and Irish whiskey and things like that.

27:50 So they're getting both ends of it. Yeah,

27:52 you know, and so they're taking five punches through the gut right away. So you know, that's not good from an industry standpoint because You're, you know, that that for destroy a purely business standpoint, it's hurting business, then we have, as an industry have done so much over the last generation to convert scotch drinkers, you know, mainly from a global community over to bourbon drinkers. And that's a lot of investment in that that most people don't understand. And that market helps us, you know, grow here in Kentucky and produce more alcohol. So if you're a scotch drinker, if you're a newly converted scotch drinker, to bourbon and you go into your favorite watering hole now and you see that bourbon is 25%, higher in price, do you go back to what you were drinking, and now we've lost you, potentially for a generation, that that's not good. Then you've got the situation where, if you're a company, you try to absorb that 25% or as much of it as possible as you can Which means less jobs and investment here in Kentucky, which again, hurts the Commonwealth. or going to your point out, you know, hey, I've just invested $50 million and doubled my production and I've got these stills do I keep them running? Well, okay, you do that. And suddenly, in six years, there's a glut of spirits on the market, that's gonna cause a price war, which probably the first casualty is gonna be the craft spirits market, it's going to put people out of business. And that's not good from a global spirit spirits industry, as well. So we don't like door number one, door number two or door number three on all those and that's why we've been lobbying awful hard to get this resolved as quick as possible.

29:47 So talk to me a little bit through about what your processes when you're lobbying against efforts like this,

29:53 bang the drum as loudly as possible. We've met with pretty much anybody who would listen to us And I've got to give a hand to our partners at the Scotch whisky association that still spirits counts the United States the American craft spirits Association, the American just just distilled spirits Association I mean this affects all of us. So one of the things that we did in Fred was actually there a couple years ago we brought the world whisky community to Lowell and had a W nine some of their Nanos so we called the W nine and talked about this you know, what are we all going to do about this because it affects everybody and we met for two days and eventually put out a resolution calling upon the world's leaders to get together and resolve this quickly before the long term consequences you know, send them became real and even planted an oak tree right in front of the Frazier there and got a lot of press and we got a lot of phone calls about it and and we all kind of went back to our corners and, and did what we we've continued to do is is just talk to us. Every Congress person, you name it. Congressman Andy Barr in Kentucky was having a fundraiser with Vice President Pence flying in. He managed to get our major companies in a meeting with Vice President Pence who from Indiana knows exactly what bourbon means to Kentucky. And he took that message back to President Trump. The governor here in Kentucky had Vice President Pence in last year during the derby did the same thing for us to help us. We've got you know, we're on speed dial with Senator McConnell's office checking in consistently with them on what more they can do. We've had meetings recently with commerce, cabinet, finance, cabinet trade, you know, Senator Grassley, his office, all these people just really explained to them how devastating these consequences could be if this goes on much longer. And the answer to them is all you know, we understand, but these decisions are being made itself high levels. That's where the frustration comes in. And, you know, we know that the US does have trade issues with countries and we get that. And we know that the steel and aluminum thing is a real issue because here in Kentucky, we have great steel and aluminum plants because of our historical low energy rates. So, you know, we're not pointing fingers at anybody, we're just, you know, going up and just trying to tell our story on you know, what this could mean to the industry. You know, because it's like, again, it's like just putting the brakes on a freight train, which is trying to sell bourbon at the end of the day, or at least

32:38 get and I want to remind, I want to remind people to who are listening, and we're never we're never really going to get a lot of backlash on this. People are gonna think all this is political. You know, you're you're you're bashing Trump and what he's trying to do. I want to remind people that this is not political. This is this is an industry who speaks to both sides. Absolutely. And talk bipartisan Talk Talk to us about about that about how you how you have to kind of keep your personal politics out of it and how you have to work with both sides. What's that like?

33:11 Well, you know, let me start from a state point here. You alcohol bills in Kentucky are incredibly hard to pass no matter what the subject is. I mean, we've even had people up here that will vote against our social responsibility efforts. Just because the word alcohol it's in the title of the bill. So we have to have Democrats and Republicans supporting alcohol measures or they just won't pass. So yes, we are constantly we say we support our friends and we have friends on both sides of the aisle. And the great thing about our Kentucky General Assembly is they understand that because they know that some of their members because of their constituencies and coming from drag counties just cannot support alcohol yet but without like how he said yeah,

33:54 yeah,

33:56 yeah, TBD drywall wedge, the you know, the The great thing about one of the smartest things that the KDA did, you know, years ago back in 2010, was invite the craft distilleries are coming into Kentucky into the Association. We change our bylaws, because not only is it good for them and our our legacy distilleries have been tremendous mentors to them, but it also spread our political footprint across the state now in 32 counties. And so we've had legislators now who never voted wet, who vote wet because they understand the the economic impact and the tourism impact, especially of that craft distillery in their district. So that's really helped. But we know you look at you know, we have a political action committee, we raise money for that. You look at our donations, they're almost evenly split between Democrats and Republicans, because we have to have support on both sides of the aisle. So we're very fortunate in Kentucky. Yes, we have Senator McConnell, who can be a lightning rod, obviously, if you're, you know, in politics, but we're lucky that we have his leadership up there because he has the President's ear and he is always, you know, carrying our agenda. That's why we have given him awards in the past. We're very fortunate to have john Yarmuth out of level now chairing Ways and Means and so met with him recently and, and he gets it because congressman Yarmuth is a huge rabid fan, and especially in local bourbon city right now, you know, and all the tremendous growth there he sees the tourism impact in the economic impact on a daily basis. Having him in the house carrying that message for us is equally as important. And, you know, he and Congressman Brett Guthrie started the bourbon caucus in DC which which is growing and as more and more states you know, produce America's only native spirit. So we have to be bipartisan and it's funny because as presently Katie, you know, you have to be kind of like a chameleon on my Republican friends think I'm a democrat and I'm a democratic friends think I'm a Republican. And I say well, I must be doing something right. Y'all don't know what I

35:55 guess. Yeah. Yeah. Well, you also have to be careful to with your membership of when you go to bar what you pick?

36:01 I do. And it's funny, obviously, you know, when people ask me, what's your favorite bourbon Kentucky bourbon is always my answer. But in it, what I usually try to do one of two things I'll usually try to drink from the county I'm in. right then. I also tend to favor our chairman or Chairwoman right now, at the time if you know this year is the heaven Hill, year to chair the KDA. And our great friend Jessica pentagrams. For heaven Hill, general counsel is is the new Chairwoman, so you'll probably tend to see me drink more heaven Hill products this year. But then there are some bars I go to and you know this Eric, what do you want and just surprised me, you know, just just mix me a good old fashioned then and I'll go from there.

36:48 Yeah, the his memberships got spies on him.

36:51 Yeah.

36:54 They have to though. Yeah, that's right.

36:55 And so I guess one of the other things I want to talk about a part of the lobbying effort here is, you know, There has to be it's got to be frustrating because we're This is a syntax basically at the end of the day right like it's alcohol and I would imagine that government just look at it like it's an easy target right an easy target attacks. When you won't like your rumblings of anything like is it like Alright, here we go like put the bat signal in the everybody get together. We're going to fly there. We're going to squash this before it ever blows up.

37:22 Well, first of all, yes. That's when you look at the government affairs strategies for your strategy number one is always hold the line on taxes. Everything else is one a one B. And Fred, highlighted our 2009 bourbon Tea Party in which we poured bourbon on the Capitol steps. And if you go to my office on top of the cabinet, I have the empty bottles in there that serve as a daily reminder for me and never forget that you know, yes, right now they're your friend but in thirst or for revenue. The first place they usually look is cigarettes or alcohol or one of the what they We think of as sin industries. But I think we've done a good job, you know, challenge changing the conversation in the culture in Frankfurt, especially from sin to signature. And that 2009 bill was probably the best wake up call for the industry and the association. That is one of the best things that ever happened to us. I mean, I can tell you the dates It was announced, if it's ingrained in my memory is announced on February 6, they pass it on Friday, February 13. That took effect on April Fool's Day. I mean, you couldn't have written a better script for how all this went down. But you had the bourbon industry and not just bourbon the alcohol industry in general because you had the beer truck circling the Capitol. You know, we galvanized they in you, we fought the governor, the Senate president and the Speaker of the House on an issue and came within one vote of killing that in one week. And it brought us together more, more and quicker than anything could have. So it's actually a blessing in disguise. For us, because we held an emergency meeting after that, February 26. See, these are how important these dates were to me and the history. And one of our board members looked at the rest of the board and said, Are we really a signature industry? Or is that a self portrait? And you could see everybody just kind of living, they physically took a step back from the table and went, you're right. Are we really a sanction? We'd like to think we're a signature in se, but are we? And so they said, what do we need to do? And so we said, All right, we need to have an economic impact study that shows what our impact is to the Commonwealth, we need to start talking about bourbon not just as a drink, but as part of the culture and the economy and tourism and things like that. And so once we started doing that, and we did, we came up with the first ever economic impact study and it is such a tool for the industry, you know, to showcase what we mean to Kentucky that we do it every two years now. And it's a no brainer. We just know we do it every two years. To update and so that gives us also the ability to forecast right what jobs are going to do what we think is going to be coming in there and down the line. But once we started talking about bourbon as economic development and tourism in and investment in jobs, it really changed the focus here in Frankfort, that we weren't a sin industry more as as Fred said earlier, because I remember sitting in a meeting in 2010 with Bill Samuels and and senate president or Senator Robert Stivers, who's now senate president and him looking as the saying you are not a signature industry. You're an image industry, but you are not a signature industry. Coal is a signature industry because he's from the coal fields of Eastern Kentucky. And now to hear him stand up and say you may be the only signature industry left in the state because coal is is dying tobacco is dead. You know, horse racing definitely has its challenges. That's, that's been, you know, a 180 turnaround from where we were 10 years ago. But it's a lot of it's been a lot of hard work, educating legislators. And, you know, in all, like all the other tools that a trade association uses, like political action committees and things like that, to make sure that they know that we appreciate their support and changing these laws.

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326 episodes