Washington can whet its economic whistle with whiskey
Monday, November 28, 2016 2:18 PM
By Don C. Brunell
Last month while touring Ireland, our guide proudly pointed out Irish whiskey is making a strong comeback and thanked us Americans for our hefty contribution to their sales and shipments.
Irish whiskey, even though its volumes are less than scotch and bourbon, is the world’s fastest growing major spirit. Production shot up by 130 percent since 2005.
Of course, the Irish are quick to point out, the United States’ prohibition laws between 1920 and 1933 were a big reason Ireland’s whiskey sales dried up in the first place.
All friendly jousting aside, there are now 16 distilleries in Ireland and Northern Ireland with 11 more on the drawing board, according to the Irish Whiskey Association. There were four just three years ago.
A big reason for the resurgence is American’s 76 million “millennials” who prefer wine and whiskey over beer. Even though beer still is the top seller among alcoholic beverages, Barclay’s research shows 18-29 year olds have been shifting away from it over the last two decades.
In 1995, seven out of 10 young Americans listed beer as their preferred alcohol drink and only 13 percent favored liquor. By 2013, the beer preference plunged to 40 percent.
The millennials trend is good news for Washington, as well. The important caveat is as long as eligible drinkers don’t overly consume, drive while intoxicated, or become addicted.
The shift from beer helps our state’s burgeoning wine industry, which is the nation’s second largest producer of premium labels.
There are over 900 wineries and last year, Washington State University reported the total economic impact of the Washington State wine industry was $4.8 billion in 2013, up from $3.5 billion in 2009.
That same report found total jobs supported by the wine industry reached 25,900 in 2013 and it contributed $61.9 million in state taxes, including both direct payments and that of businesses supported by wine and related activities.
Then two years ago, the Seattle Times carried a headline: “The boutique booze boom in Washington….with more than 100 small distilleries opening in the last six years, Washington is leading the ‘farm-to-tumbler’ movement.”
One of the distillers that Times reporter Tan Vinh wrote about is Emerson Lamb, owner of Seattle Sodo’s Westland Distillery. Lamb, originally from Hoquiam, believes Washington can produce the same high quality premium single malt (one distillery) whiskey.
Washington, Ireland and Scotland west coast maritime climates are very similar and well suited to producing premium whiskey.
Researchers at Washington State and Oregon State universities, confirmed Lamb’s contention. “It’s a game changer,” WSU researcher Stephen Jones told the Times’ Vinh. “It’s opening up a whole new world. We don’t have to look at Tennessee and Kentucky for high-quality whiskeys. We can do it right here.”
Many northwest distillers believe they can dominate the single malt market much like Kentucky controls the bourbon market.
WSU’s Jones told the Times that the maritime climate from Vancouver, Wash., to Vancouver, B.C., is ideal for growing the barley strains that have low protein and high starch, the same types that produce a “complex flavor – sweet, but not white-sugar sweet.”
“Barley is the most complex and flavorful grain in the whiskey-making process. And the state of Washington grows world-class barley,” Lamb added.
Washington and Ireland have opportunities in whiskey. They have the clientele to grow a prosperous spirits industry as long as government policies, taxes and permit fees are reasonable.
The caution is both tax liquor heavily. In Ireland, revenue from six out of every 10 bottle sold goes to pay taxes. Washington imposes the nation’s highest excise tax on spirits at $35.22 per gallon.
Don C. Brunell is a business analyst and former president of the Association of Washington Business.