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669. Why Is 95 Percent of the World’s Bourbon Made in Kentucky?

April 3, 2026·46 min·4 clips

Ken Trotsky reveals 16 million barrels of bourbon are aging in Kentucky, up from 4 million, signaling a looming glut.

Most products can sell right away. Bourbon, like scotch and a few slow moving foods and wines, makes time after manufacturing part of the cost. That is the hook. Dubner ties the question to an earlier horse industry series, where another Kentucky business gathered around Lexington's bluegrass region. Then comes the puzzle. If bourbon can legally be made outside Kentucky, why does 95 percent of the supply come from there? Tradition matters, but it is not the whole answer. The excerpt points to existing facilities and storage needs as reasons the industry stays put, then brings in people who understand distilling and aging. Distribution gets odd fast. A thought experiment about buying bottles at a gift shop and reselling them in La Jolla makes the rules easier to feel. Then the barrel opens. The episode moves from the bottle on the shelf to what happens to the brown liquid as it is made and aged. Enter Danny Kahn. He identifies himself as Sazerac's master distiller and distillation and aging operations director, with work spanning Buffalo Trace, Barton 1792, and Collingwood. Sazerac has been around a long time. Founded in New Orleans in 1869, it now keeps its main operation in Louisville while making hundreds of spirits. Kahn did not arrive by the obvious route. He grew up in Los Angeles and says that before distilling, he was a brewer. Chemistry slips in without making a meal of it. Cellulose, hemicellulose, and lignans matter because bourbon's value depends on what time does inside a barrel. The result is dry in the best way: a market story about patience, geography, law, tradition, and the stubborn cost of waiting.

As heard by us

A clear business look at bourbon as tied-up capital, Kentucky tradition, and production expertise aging in the barrel.

Bourbon makes a useful business case because it ties up capital after production: the product is made, but the return waits on years in a barrel.

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Why you'd press play

Bourbon does not have to be made in Kentucky. This episode asks why so much of it is.

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