Bourbon is America’s native spirit but as its popularity grows, the brands are increasingly being scooped up by foreign companies.
Thanks to a 1964 law, bourbon must be made in the U.S. but the rules don’t say anything about where the controlling company is headquartered.
Bourbon lovers might be surprised to learn that a large number of Kentucky favorites are owned by Japanese companies. Last year, Japan-based Suntory bought Beam at a 25 percent premium over market value for $16 billion.
Read More Google’s big bet will change your world
That means the world’s best-selling bourbon, Jim Beam, is actually owned by a Japanese company. Suntory also now owns Maker’s Mark, Knob Creek and Basil Hayden.
The numbers look good so far. For 2014, Suntory reported a 56 percent jump in Jim Beam sales and a 39 percent increase in sales of Maker’s Mark year over year.
“Suntory was the perfect marriage for us. Nothing has changed at this point as far as how we make bourbon. We’re doing it the same way we’ve done it since 1795,” said Jim Beam Master Distiller Fred Noe III.
Another popular Kentucky bourbon, Four Roses, is also owned by a Japanese company. Kirin bought the brand from Seagram in 2001. Despite foreign ownership, Suntory continues to build on the company’s Kentucky roots. Four Roses broke ground on a $55 million expansion at its Kentucky distillery this week.
Bourbon production has increased 150 percent over the past 15 years. The number of distilleries in Kentucky alone has jumped more than 200 percent since 2012.
Japan isn’t the only country getting in on the bourbon boom.
Bermuda’s family-owned Bacardi made its first foray into the bourbon business with the purchase of Angel’s Envy in March for an undisclosed amount. Bacardi said the company’s operations will remain in Louisville, Kentucky.
Some big brands still have domestic ownership of course. Louisville’s Brown-Forman makes Woodford Reserve and Old Forester. The company is pumping $50 million into revitalizing Old Forester, its founding brand, including building a distillery on Louisville’s brand new Whiskey Row.
Read More Brown-Forman meets 4Q profit forecasts
Heaven Hill has been operated by the Shapira family in Kentucky since 1935. It produces the well-known Evan Williams and Elijah Craig bourbons.
The international interest is driving exports. Bourbon and Tennessee whiskey exports surpassed $1 billion for the second year in a row in 2014.
Four Roses’ new CEO Satoko Yoshida said: “The passion for bourbon is as strong in Japan as it is here. Kirin and Four Roses both value good people and good brands.”
There are many new bourbon brands aging in the wings. According to the Distilled Spirits Council of the U.S., there are now more than 700 small distillers in America. According to the Kentucky Distillers Association, 19 more distilleries are coming to the state next year.