The History of American Whiskey

American Whiskey: A Story of Heritage, Craft, and Rising Global Prestige - Exploring the Spirit That Shaped a Nation and Now Captivates Collectors Worldwide

The history of American whiskey is inseparable from the story of the United States itself. Its foundations were laid in the early 17th century, as European farmer settlers brought with them grains and Old World distilling techniques. In a land where transporting or storing raw grain was difficult and spoilage was a constant threat, turning surplus harvests into whiskey (or brandy or applejack) made practical sense. Whiskey wasn’t perishable, more easily stored, and could be traded, sold, or bartered at market.

For most of the colonial era, however, rum was the spirit of choice. The New England economy thrived on the triangular trade: molasses from the Caribbean was shipped to ports like Boston and Newport, then distilled into rum. By 1770, New England was home to over 150 distilleries. While there was no problem with the trade itself, the British Crown wanted the sugar and molasses to come from the British West Indies – Britain’s most important trading partner at the time - rather than their French counterparts, who also happened to be a lot cheaper.

Measures by the British began with the Molasses Act of 1733, which taxed molasses arriving from non-British colonies at a hefty sixpence per gallon. This naturally led to a large increase in smuggling, bribery, and intimidation of tax officials and proved largely ineffective. This was replaced by the Sugar Act of 1764, which halved the rate of tax but included much stricter enforcement measures, helped by the new British standing army of 10,000 troops in the colonies following the conclusion of the Seven Years War. Some of the anti-Britain feelings of taxation without representation that grew from the Sugar Act were solidified following the passage of the Stamp Act the following year, and most famously the Tea Act of 1773. 2 years later, the Revolutionary War began. John Adams later wrote that “molasses was an essential ingredient in American independence.”

When war broke out in 1775, rum remained essential, used not only to bolster morale but as part of soldiers’ pay (or punishment through its withholding). George Washington, ever pragmatic, even instructed his officers to seize rum when needed: “Our necessities are so great that you must take it.” But with the British Navy choking off molasses imports, colonists needed to turn towards homegrown alternatives.

By the end of the war in 1783, it is estimated that there were between 400-600 small farm distilleries dotted around the colonies, predominantly making their whiskey from rye. As the population started to move south and west, so too did distilling. It was around this time that names such as Jacob Beam, Evan Williams, Elijah Craig and many more settled in Kentucky (at the time still part of Virginia) and started to make use of the abundant corn (maize) that grew there to make their ‘Kentucky’ or ‘Western’ whisky (the ‘e’ came later). Although early bourbons often had high rye content, the corn-heavy mash bills became a defining trait over time.

This influx to Kentucky was accelerated following the introduction of the Whiskey Tax in 1791 and the subsequent Rebellion. As was the case in Great Britain at the time, tax was levied at the point of production rather than that of sale, which naturally caused cash-flow issues for the distillers. Although it was repealed by Thomas Jefferson in 1802, the fast-growing corn, limestone-filtered water, fertile land, hot summers and cool winters (along with the comparative freedom from government oversight) made Kentucky an appealing destination, and distillers continued to flock there. By 1810, there were 2,200 distilleries in Kentucky alone. Most of the early activity centred around Bourbon County, one of the original nine counties of Kentucky, named in 1785 in honour of the French royal family, in recognition of the essential help that France had given in the Revolutionary War.

The whiskey at this time was typically aged only briefly, if at all, and always sold in barrels. Distilleries that had access to rivers or ports were able to distribute their whiskeys further afield. Whiskey became Kentucky’s biggest export, being shipped down the Mississippi River by flatboat, particularly to New Orleans (now American, following the 1803 Louisiana Purchase), where it came to be known as Bourbon whiskey—a name that stuck, helped by the positive associations it carried in that formerly French city. Yet it wasn’t until 1821 that the name ‘Bourbon whiskey’ first appeared in print, in the Western Citizen Newspaper of Bourbon County, offering “Bourbon Whiskey by the barrel or keg.”

The 19^th century was one of huge changes - technical, technological, and legislative - that saw the whiskey from Kentucky become closer to what we know today. On the technical side, the major innovation was the use of charred oak to age whiskey. The first recording of this is in a letter from 1826, when J.M. Pike of Lexington, KY wrote to the Bourbon County distiller John Corlis, pleased with the product and confident of selling all 100 barrels he had purchased, adding: “it is suggested to me, that if our barrels should be burnt upon the inside, say only the 16^th of an inch, that it will much improve it, of this however I presume you are the best judge.”

This was just one year after the Lincoln County Process, whereby whiskey is filtered through sugar maple charcoal, started to be widely used in Tennessee, and would become their defining point of difference.

The use of the sour mash process, when a proportion of the spent mash is reused with the next batch in order to help control the acidity, was another essential invention of the early 19^th century. Although Dr James Crow (after whom the Old Crow brand was named) industrialised the method in the 1830s, the technique seems to have been widely used before then, as evidenced by a sour (and sweet) mashwhiskey recipe from 1818 by Catherine Carpenter.

Rum had not disappeared completely, and was still more popular in New England than whiskey, so in 1828 Congress, under the growing influence of the whiskey producers, once again instituted rum tariffs.

The Industrial Revolution also brought many advancements to the whiskey industry. 1811 saw the first voyage of the steamboat New Orleans from Pittsburgh to New Orleans, which allowed two-way traffic and trade, where previously the return journey had entailed a sea voyage and the laborious crossing of the Appalachian Mountains. A few years later, the Hope distillery in Kentucky started using steam power, which became common practice over the following ten years.

The next huge leap in transportation came with the arrival of railroads, allowing for significantly wider distribution. In 1850, Kentucky chartered the Louisville and Nashville Railroad. Though it would take nearly 10 years to complete the 250-mile track between the cities, over the next 25 years, it would extend from Ohio and Missouri to Louisiana and Florida.

Perhaps most significantly in terms of production, the introduction of the column still around the same time as the railroad allowed for faster, more efficient production than the pot stills that had previously been used.

It was not without its challenges, though. The Civil War saw the reintroduction of the whiskey tax to help pay for the Union’s expenses. Many distilleries were destroyed and distillers killed during the war, and whiskey became a rare commodity, caused by the demand for its medicinal uses and decreased production. A half-gallon of whiskey before 1861 would cost less than twenty cents; by 1863, that had risen to nearly seventeen dollars.

Following the war, the Reconstruction era was when Bourbon became big business. In 1868, the two lines of the Transcontinental Railroad were connected, joining the East and West coasts, the whiskey tax was reduced, though not removed, and the practice of ‘bonding’ began. Because tax was still due at the point of production, legitimate distillers weren’t fond of the idea of paying tax for whiskey that they would lose through the angels’ share during maturation. Illegitimate ones wouldn’t concern themselves with such worries. The solution was to place the newly-made whiskey into a bonded warehouse and after a year a tax gauger would visit, asses the tax that needed to be paid by measuring the amount of evaporation, and stamp the relevant casks once paid. In 1879, this period was extended to three years, before eventually becoming the Bottled-In-Bond Act of 1897, which detailed that the whiskey had to be the product of one distillery and one distillation season, and aged in a bonded warehouse for at least four years and bottled at 100 proof (50% ABV).

This period saw the opening of many new distilleries, including the Ripy Family Distillery (later Wild Turkey), Four Roses, the Stitzel distillery (a familial forerunner of the famed Stitzel-Weller distillery), as well as Jack Daniels and George Dickel in Tennessee. In 1870, E.H. Taylor, purchased and branded the Old Fire Copper Distillery, now known as Buffalo Trace, and George Garvin Brown, the founder of what is now the Brown-Forman Corporation, was the first to market and sell his Old Forrester brand (one of the ‘r’s was subsequently dropped) in sealed glass bottles.

Branding and labelling brought recognition and consistency, along with the practice of blending whiskeys from different barrels. In 1880, the Kentucky Distillers’ Association was formed at Galt House in Louisville to advocate for the Bourbon industry and protect it from "needless and obstructive laws and regulations." Whiskey had shifted from a hyper-local product to a national commodity.

The first decade of the twentieth century saw further advances with the invention of the automatic bottle machine in 1904. The Pure Food and Drug Act of 1906 ensured that Bourbon, among many other things, had to be labelled correctly, which led to many companies going out of business due to the unsubstantiated health benefits they professed. This was followed in 1909 by the historic Taft Decision, which enshrined the definitions and compositions of whiskey into law.

However, this period of growth coincided with growing cultural and political opposition to alcohol. The rise of the Temperance movement and the Anti-Saloon League meant that by 1910 there was already some form of Prohibition in every single state, and Kentucky itself was dry five years before the Volstead Act came into effect on January 17^th, 1920. The whiskey industry collapsed almost overnight; distilleries were shuttered, and brands vanished.

Despite the ban, whiskey still had its medicinal uses, and six distilleries managed to obtain federal licences to sell whiskey: Brown-Forman, Frankfort Distillery, James Thompson and Brothers/Glenmore, American Medicinal Spirits, Schenley Distillery, and A. Ph. Stitzel Distillery. Distilleries who did not have licences might sell their whiskeys to these six, or contract with them to bottle and sell their whiskeys for them, for a fee. Others might try to wait it out, but for most, Prohibition spelled the end.

Prior to Prohibition, Kentucky had been home to over 200 distilleries; only 34 of these were able to reopen after it. Stocks had dwindled dramatically due to the perhaps surprising rise in consumption. Indeed, in 1928, there was a federal Distiller’s Holiday, a 100-day amnesty on distilling for the six distilleries, which was required to top up stocks of medicinal whiskey. Over 11 million litres of whiskey were produced in this window.

Although the Distiller’s Holiday had given the licensed distilleries a head start, the industry as a whole still faced enormous challenges following Repeal, including diminished stocks, drought, damaged infrastructure, and the Great Depression. Cocktail culture also changed, with sweeter mixed drinks being favoured. Scotch and Canadian whiskies flooded the market, championed by Somerset Importers, a company that had been set up by Franklin Roosevelt’s son and John F Kennedy’s father. They had also approached the Dublin distilleries of Bow Street (Jameson’s) and John’s Lane (Powers), but, fearful of breaking US law, they declined the opportunity, which was to say at the least a huge missed opportunity for Irish whiskey.

It was slow but steady progress for Bourbon. Prohibition had caused the loss of at least $226 million per year in tax revenue, while it’s estimated that the repeal had a net social benefit of $432 million per year in 1934-1937, and the number of distilleries had risen to 70 by 1938, including Stitzel-Weller, Willett and Heaven Hill.

Another cessation of distilling was around the corner, though, when during World War II most American distilleries were converted for war use. Between 1942-1946, there was no production of spirits, but the distilleries were all busy producing 95% abv industrial alcohol (or ‘cocktails for Hitler’ as the producers called it) for the war effort. The spirits industry provided 44% of the 6.4 billion litres of industrial alcohol that was used during the war.

After the war, bourbon re-emerged at an amazing rate, led by the ‘Big Four’ of Schenley, National Distillers, Hiram-Walker, and Seagram, the latter two Canadian companies that had benefited hugely from Prohibition. These companies had consolidated by buying up smaller distilleries and brands that had struggled or gone bust in the previous decades. Of these, Schenley was the biggest. Founded by Lewis Rosenstiel in 1920, it went on to acquire distilleries such as George T Stagg, James E Pepper, Bernheim, and Squibb in Indiana (now MGP).

Rosenstiel had had less than salubrious connections to bootlegging and gangsters like Meyer Lansky, but was to become one of the most important figures in American whiskey. During the Korean War in 1950-1953, he predicted that there would be similar shortages to those suffered during World War II and ramped up his production in anticipation. His fears turned out to be unfounded, with the consequence that after the war ended, his surplus of stock meant that he controlled roughly two-thirds of the entire USA’s older whiskey stocks. Although Americans were still drinking plenty of whiskey at the time, supply massively outstripped demand. Federal law at the time dictated that distillers had to pay taxes on whiskey after 8 years whether it had been sold or not. The potential of selling off his whiskey at a loss and causing a race to the bottom had potentially disastrous consequences for the industry.

His goal was to have the timeframe expanded, allowing him to market his aged whiskey as luxury goods and promoting them in export markets that had been created by the booming post-war economy. The other distillery heads understandably had grave reservations about the advantage this would give to Schenley, but Rosensteil persevered and formed the Bourbon Institute, who successfully lobbied for the passage of the Forand Act of 1958 which made taxes due at 20 years rather than 8. He followed this up by pouring $35 million into a global advertising campaign to sell it to others markets.

The final step was to protect the identity of Bourbon, in the way that Cognac or Champagne were, which was achieved in 1964, after plenty more lobbying, when a resolution in Congress declared Bourbon to be “a distinctive product of the United States.”

Despite its iconic status, American whiskey faced a precipitous decline in the 1970s. As the first wave of baby boomers came of drinking age, tastes started to change. Younger drinkers, rejecting their parents’ generation and what they drank, turned to other drinks, particularly vodka, beer and wine. Whiskey was deemed old fashioned. 1974 saw Vodka sales surpass Bourbon sales for the first time. The industry was once again on its knees.

Help that was desperately needed was to come from the other side of the world, where in Japan tastes were going in the other direction. There, the older generation favoured whisky, either their own or in particular the Scotch on which it was based, while the younger generation had not yet formed their drinking tastes, but were caught in a wave of Westernisation and Americana which followed the American occupation during World War II. Sensing and in desperate need of an opportunity, Schenley, followed swiftly by Brown-Forman, made distribution deals with Suntory Holdings, Japan’s largest spirits producer, while Seagram had a similar deal with Kirin, Japan’s top beer brand, for the distribution of Four Roses.

Together, they helped set up bourbon bars across the country, designed to appeal to young customers, pouring such brands as Schenley’s Ancient Age, I.W. Harper and J.W. Dant, and Brown-Forman’s Jack Daniels, Old Forester and Early Times. It worked tremendously well and would prop the industry up for the 25 years. What were formerly bottom-shelf products like I.W. Harper were able to command much higher prices in Japan and it would go from exporting 2,000 cases per year annually in 1969 to over 500,000 cases in 1991.

Japan was also used to seeing age statements on their Scotch whiskies and were not only more accepting of older whiskey, but sought it out. American distilleries were able to sell high age statement whiskeys which they could not move at the time in the United States. The success was such that brands were created specifically for the Japanese market, such as Blanton’s (the first mass-marketed single barrel bourbon), Evan Williams 23 and Martin Mills 24 year old, and Very Old St Nick and Old Man Winter by Kentucky Bourbon Distillers (the company formerly and now known as Willett) and a number of bottlings from a young Julian Van Winkle III. Becoming ‘big in Japan’ was the goal for many American distillers during this period and by 1990, over 2 million cases of bourbon were exported there. Japan’s interest in Bourbon remains to this day, with Kirin purchasing Four Roses in 2002 and Suntory buying Beam in 2014, while the country’s shops and bars remained a paradise for ‘dusty’ hunters until very recently.

Taking the cue from Japan that high-quality, long-aged bourbons had a market, the trend eventually started filtering back into America. Early forays into older whiskeys included Pappy Van Winkle 20 year old in 1994, their 23 year old four years later, and Weller 19 year old in in 2000. These were still exceptions in the US though, and it was not until the early 2000s that bourbon really saw any signs of recovery in its homeland.

The bourbon crisis in America lasted the best part of three decades.

Since the late 1950’s, the only Four Roses that had been seen in the US was the ill-thought-of blended whiskey, rather than the Kentucky straight bourbon that was sold export-only and this only changed in 1995. In 1999 the Kentucky Bourbon Trail was launched, highlighting the top distillers in the region. Buffalo Trace, formerly the OFC and George T Stagg distillery, was rebranded and relaunched in 2002 following extensive refurbishments and was now the sole distiller of the Pappy Van Winkle portfolio, along with Blanton’s, Stagg, Weller, and many more. New distillers like St George’s and Leopold Bros, and non-distilling producers (NDPs, or independent bottlers) like Michter’s, Jefferson’s and Black Maple Hill had started to appear.

In 2007, the status of Bourbon was further cemented when Kentucky Senator Jim Bunning sponsored a bill to declare September “National Bourbon Heritage Month.” The wording that he used misquoted the 1964 resolution, so that Bourbon was no longer simply “a distinctive product of the United States”, but “America’s Native Spirit,” adding sentimental language linking it to “family heritage, tradition, and deep-rooted legacy.”

After spending so long in the wilderness, bourbon was in the full bloom of a renaissance. Building on the momentum of the craft beer revolution, a wave of micro-distilleries sprang up across the country—growing from just 50 in 2005 to over 250 in 2012, and surpassing 2,500 by 2024. Bourbon had become more than a drink; it was a status symbol, a collector’s item, and a quick investment. Limited-edition releases and age-statement rarities sparked a booming secondary market, where coveted bottles like Pappy Van Winkle, Blanton’s, and Weller routinely fetched many times their original retail price. Huge investment was poured into new distilleries, new warehousing and increased production.

However, the landscape today looks rather less rosy: the anticipated demand has not been realised; the collectible craze continues, but to a lesser extent, and only on certain whiskeys; retaliatory tariffs imposed by the European Union in 2017 dampened what had been a rapidly growing export market; the COVID-19 pandemic disrupted supply chains, delayed production, and altered consumer behaviour in ways still being felt; and rising inflation and the cost of living crisis meant that people were spending less on their whiskeys and it was the micro-distilleries that have suffered a lot of the brunt of this, leading to closures becoming increasingly common. The history of American whiskey is one of booms and busts and it appears we may just have passed the top of a cycle, but it has also proved remarkably resilient and has always found a way to come back, stronger than before.

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