Distilling was most likely brought to present-day Kentucky in the late 18th century by Scots,
Scots-Irish, and other settlers (including English, Irish, Welsh, German, and French) who began to farm the area. The origin of bourbon as a distinct form of whiskey is not well documented and there are many conflicting legends and claims. For example, the invention of bourbon is often attributed to
Elijah Craig, a
Baptist minister and distiller credited with many Kentucky firsts (e.g.,
fulling mill,
paper mill,
ropewalk) who is said to have been the first to age the product in charred oak casks, a process that gives bourbon its brownish color and distinctive taste. In
Bourbon County, across the county line from Craig's distillery in what was then
Fayette County, an early distiller named Jacob Spears has been named as the first to label his product as Bourbon whiskey. Although still popular and often repeated, the Craig legend is
apocryphal. Similarly, the Spears story is a local favorite but is rarely repeated outside the county. There likely was no single "inventor" of bourbon, which developed into its present form in the late 19th century. Essentially, any type of grain can be used to make whiskey, and the practice of aging whiskey and charring the barrels for better flavor had been known in Europe for centuries. The late date of the Bourbon County etymology has led historian Michael Veach to dispute its authenticity. He proposes the whiskey was named after
Bourbon Street in
New Orleans, a major port where shipments of Kentucky whiskey sold well as a cheaper alternative to French
cognac. It included the current
Bourbon County in Kentucky, which became a county when Kentucky separated from Virginia as a new state in 1792. Numerous newspaper articles reference whiskey from Bourbon County, Kentucky dating as far back as 1824. According to the whiskey writer Charles K. Cowdery, A refinement often dubiously credited to
James C. Crow is the
sour mash process, which conditions each new
fermentation with some amount of spent mash. Spent mash is also known as spent beer, distillers'
spent grain, stillage, and slop or feed mash, so named because it is used as animal feed. The
acid introduced when using the sour mash controls the growth of
bacteria that could taint the whiskey and creates a proper
pH balance for the yeast to work. Although many distilleries operated in Bourbon County historically, no distilleries operated there between 1919, when
Prohibition began in Kentucky, and late 2014, when a small distillery opened – a period of 95 years. Prohibition devastated the bourbon industry. With the ratification of the 18th amendment in 1919, all distilleries were forced to stop operating. Six companies were granted permits to bottle medicinal whiskey from existing stocks: A. Ph. Stitzel Distillery (later called the
Stitzel–Weller Distillery), American Medicinal Spirits (producer of
Old Crow and
Old Grand-Dad, sold in 1929 to
National Distillers, now owned by
Suntory Global Spirits),
Brown-Forman (still a current major producer), Frankfort Distillery (including the George T. Stagg distillery now called the
Buffalo Trace Distillery and owned by
Sazerac), James Thompson and Brothers (later called
Glenmore Distillery, now owned by Sazerac), and
Schenley Distillery (now owned by
Guinness). According to E. Kyle Romero, after World War II whiskey transitioned from a primarily domestic product to a major export product. The war introduced many American soldiers to whiskey, and veterans boosted a growing domestic demand. The postwar economic boom and the rise of consumer culture fueled whiskey's golden age in the 1950s and 1960s, solidifying its place in global markets. The
Bourbon Institute, established in 1958, played a crucial role in reducing trade restrictions, particularly in Europe, further expanding whiskey's international reach. By 1960, the institute explicitly framed bourbon as a cultural ambassador of American identity, reinforcing the idea that its global presence reflected the broader influence of American ways and products. In 1964, when Americans consumed around 77 million gallons of bourbon, A
U.S. federal regulation now restricts the definition of
bourbon for whiskey to only include spirits produced in the U.S. In recent years, bourbon and
Tennessee whiskey, which is sometimes regarded as a different type of spirit but generally meets the legal requirements to be called bourbon, have enjoyed significant growth in popularity. The industry trade group
Distilled Spirits Council of the United States (DISCUS) tracks sales of bourbon and Tennessee whiskey together. According to DISCUS, during 2009–2014, the volume of 9-liter cases of whiskey increased by 28.5% overall. Higher-end bourbon and whiskeys experienced the greatest growth. During the
second Trump administration, international sales of bourbon decreased significantly as importing countries curtailed their purchases. Provinces in Canada, which until the
trade war and
annexation threats had comprised 10% of Kentucky's whiskey business, stopped selling American products in government-owned liquor stores. This led to a contraction in the bourbon business, with multiple distilleries filing for bankruptcy. Overall exports of American spirits, bourbon included, fell 9% between 2024 and 2025. By early 2026, despite the contraction in exports, the industry's total economic impact in Kentucky reached a record US$10.6 billion, according to the Kentucky Distillers' Association. This growth has been met with significant logistical hurdles, specifically in the management of a record 16.1 million aging barrels, necessitating a rapid expansion of bonded warehouse (rickhouse) infrastructure across the state. To mitigate inventory imbalances caused by global trade volatility, some major producers implemented production pauses in 2026, most notably at Jim Beam's Clermont facility. ==Legal requirements==