The export market makes up about a third of all Bourbon sales today. This has not always been the case, but the export market has been an important part of the sales for over a century. In the early 19th century American whiskey was a domestic market. Very little whiskey was being sent to other countries. That begin to change in 1853 when Commodore Perry used gunboat diplomacy to open up the Japanese markets and establish trade with this Asian nation. Perry gifted the Emperor of Japan with some barrels of American whiskey, probably Bourbon and Rye whiskeys. This gift created a market for American whiskey in Japan. Later in the century, President Taft’s father, Alphonso Taft, a judge in the Supreme Court system in Ohio, settled a case in favor of the Japanese Government over rectified whiskey that was being sold as straight whiskey in Japan. It was a small market at the time, but it was a beginning.
In the late 19th century, some American distillers started shipping barrels of whiskey to Bremen, Germany in order to age it for more than 8 years. The bonding period was only eight years and they wanted to age it longer before paying the taxes on the whiskey. W.G. Coldeway started doing this to age a 16 year old Mammoth Cave Bourbon in the 1880s. He sold some of the whiskey in Germany to help defer the expenses. Europe was another small, but growing market for American whiskey.
American whiskey sales took a blow in the overseas market because of Prohibition. Some companies sent their whiskey to foreign markets to avoid Prohibition, but not many chose to do so. After Prohibition American distillers concentrated on simply making whiskey. They needed to make enough for the United States market so exports were the least of their concerns in the 1930s. The World War that followed kept the export on the back burner for another decade. It is not until the late 1950s and the early 1960s that there was enough surplus whiskey in the warehouses to start supplying the export markets.
World War II and its aftermath helped create overseas markets. The American military established bases in many countries after the war and the soldiers based in these countries took a taste for Bourbon with them. A soldier could purchase a bottle of Bourbon tax free on the base and take it into town with them. Every soldier that shared their bottle with a local citizen became a brand ambassador for Bourbon.
Schenley was one of the companies to take advantage of the overseas market in the 1960s. They had over-produced in the 50s and had a lot of aging whiskey in their warehouses to sell. Schenley decided to make I.W. Harper their flagship brand for the export markets. By the middle of the decade I.W. Harper was being sold in 110 countries. By the 1980s, Japan had become the largest and most profitable market for I.W. Harper and Schenley discontinued the brand in the United States to protect the sales in Japan. Harper was bringing a premium price in Japan and people were coming to the United States and purchasing cases of the Bourbon, sending them back to Japan and even after paying the taxes to the Japanese Government, selling it for a profit.
Four Roses was another brand that profited from the export market after the war. The Four Roses Bourbon was sold only overseas while the blended whiskey was being sold in the United States. Other brands also entered the export business. Jim Beam in particular became popular as an export as Beam was the brand mostly available on United States military bases. American soldiers and sailors did an excellent job as brand ambassadors for Beam.
When Bourbon sales were declining in the 1960s and 70s, it was the export markets that helped keep many distilleries in the black. As the premium brands such as single barrel and small batch whiskeys took off in the 1990s, they increased the interest in Bourbon overseas as well as in the domestic market. Bourbon sales started growing because of these premium brands and they also created interest in the old brands made by the same distillery as the premium brand. The Bourbon boom and the Bourbon shortage, has been fed not only by domestic sales, but also by exports. Despite trade war and tariffs, Bourbon has become popular around the world in the 21st century.
Photos Courtesy of Rosemary Miller
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