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Diageo Opens $130 Million, Carbon-Neutral Distillery In Kentucky

September 28, 2021

Diageo has opened a new carbon-neutral distillery in Kentucky, said to be one of the largest of its kind in North America, on a $130 million investment. Based in Lebanon, Kentucky, the Diageo Lebanon Distillery is a 72,000 square foot facility with capacity to produce up to 10 million proof gallons annually. It has already begun distilling Bulleit Bourbon using electrode boilers powered by 100% renewable electricity throughout the cooking, distillation, and dry house processes, Diageo says.

Diageo continues to up capacity for Bulleit to meet climbing demand. The Diageo Lebanon Distillery will supplement production of Bulleit looking ahead, complementing the output of the brand’s existing Bulleit Distilling Co. site in nearby Shelbyville, Kentucky. The Bulleit Distilling Co. facility opened on a $115 million investment in 2017.

According to Impact Databank, Bulleit’s U.S. volume vaulted from 125,000 cases in 2010 to 1.5 million cases last year, averaging nearly 29% annual growth over the course of the decade. Among all super-premium Bourbon and Tennessee whiskey brands in the U.S. (retailing at $25 a 750-ml. and above), Bulleit ranks second only to Maker’s Mark, which finished 2020 just shy of 2 million cases. In Diageo’s fiscal year through June, Bulleit saw U.S. net sales climb 10%, boosted by increased marketing investment and strong off-premise gains.

The new carbon-neutral distillery avoids using fossil fuels by sourcing a mix of wind and solar energy to power the electrode boilers, onsite electric vehicles, and internal and external lighting and equipment. It also employs virtual metering technology “to advance visibility of water, electricity, and steam usage” and promote sustainability, according to the company. “This is a significant step in our journey to create a low carbon future and be a solution to tackle the ongoing climate crisis,” said Perry Jones, Diageo’s president of North America Supply.

Using such carbon-free technologies will allow the distillery to avoid more than 117,000 metric tons of carbon emissions annually, the equivalent of taking more than 25,000 cars off the road for a year, Diageo says. As a company, Diageo has committed to powering all operations using 100% renewable energy and becoming net-zero carbon across its direct operations by 2030.—Daniel Marsteller

The U.S. Market’s Top 5 Super-Premium Bourbon/Rye Brands1 – YTD Growth In Control States
Brand Marketer Total 2020
Case Depletions2
2021 YTD
Percent Growth
In Control States3
Maker’s Mark4 Beam Suntory 1,988 16.9%
Bulleit5 Diageo NA 1,545 13.1%
Woodford Reserve6 Brown-Forman 977 24.4%
Knob Creek Beam Suntory 520 -0.7%
Gentleman Jack7 Brown-Forman 489 2.9%
1 At least $25 a 750-ml.
2 Thousands of 9-liter case depletions
3 Seven months through July
4 Includes Maker’s 46
5 Includes Bourbon and Rye
6 Includes Double Oaked and Rye
7 Tennessee whiskey
Source: NABCA and IMPACT DATABANK © 2021
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