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Posted on Friday, April 27, 2018 at 10:34 am

This is the first in a series of articles focusing on the economic impact of Jack Daniels in Moore County, the surrounding region and the state. Thanks to Paul Coomes, Ph.D., Professor Emeritus of Economics at the University of Louisville and special consultant to the school’s Urban Studies Institute.

Jack Daniels, one of the most popular and famous whiskey brands in the world, is produced only in Lynchburg. The distillery, bottling, aging, and related operations employ around 700 persons in Lynchburg, making it by far the most important industry in Moore County, and one of the largest private employers in the region. Over 23 million cases of Jack Daniels whiskey were shipped out from Lynchburg last year to domestic and international consumers. A largely invisible flow of dollars return to Lynchburg, as worldwide purchases of Jack Daniels pay for the materials and labor used to make the product. In this updated series, we will analyze the economic and fiscal impacts of those external dollars on the regional economy. This analysis reflects the major investments made to expand distilling, bottling, and warehousing facilities that occurred in 2013-14 and 2016-17, which significantly increased capacity to meet strong demand. The primary economic impact works through the spending of Jack Daniels’ employees, using their $47 million in annual wages and salaries to purchase homes, cars, goods, and services throughout the region. Total employee compensation, including benefits, at the facility is $54 million annually. The Lynchburg operation adds water and labor, plus some local sugar maple for the charcoal and a few other local ingredients, to make the final product. It is estimated that the total statewide impact of the operation, including spin-off activity, is 2,368 jobs and $165 million in total employee compensation. Additionally, while precise information on visitor spending is not available, it is estimated that another 384 jobs in the region are attributed to Jack Daniels-induced tourism. The Jack Daniels operation is a major local taxpayer. The operations are estimated to generate about $5.7 million in tax revenues for local and state governments. This includes $3.1 million in property taxes, $0.9 million in sales taxes paid by employees, $0.4 million for a bottle tax, and $1.3 million in tourism-related taxes. Jack Daniels appears to account for close to one-half of all taxes collected in Moore County. In the next installment of the series will focus on the economic geography of the region, presenting the data on population, jobs, payrolls, and commuting patterns to better understand the Jack Daniels operation in the context of other activity in south central Tennessee. Then we will highlight the economic linkages between distilleries and other industries, to learn how Jack Daniels production activity likely impacts other businesses in the region and the state. Next, we will examine the taxes paid by Jack Daniels and its employees, and estimate how important those payments are to local and state government governments. Finally, we will present the total economic and fiscal impacts.

 

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