Blog By: Stevi Whitman

As the demand for whiskey continues to reach new heights, producers and consumers recognize the need to safeguard authentic, quality whiskey through various standards and regulations.[i] The whiskey industry’s growth is valued at a compound annual growth rate of 6.2 percent globally between 2023 and 2032.[ii] Continued record-breaking growth is expected in the next decade, as demand increasingly exceeds supply.[iii] Furthermore, the pervasive popularity of whiskey has drastically increased the secondary market.[iv] Many newer “producers” of small batch and craft whiskey rely on corporate mega-distilleries to provide their whiskey product, and then later rebottle the product under their own name.[v] Although there is nothing inherently wrong about a producer not distilling their own product, sourcing whiskey and rebottling under different labels disparages the craft name and lacks an incredible amount of transparency. [vi] Now enters, the Estate Whiskey Alliance®.[vii] Due to booming production and economic growth in the industry, leaders and consumers in the field are vesting in United States trademark law to safeguard authenticity and bolster sustainability efforts through valued, local sourcing as a means of securing economic endeavors and building consumer trust.[viii]

In 2023, UK Innovate at the University of Kentucky, along with the James B. Beam Institute, Marker’s Mark Distillery, and other founding members, created the Estate Whiskey Alliance® (EWA).[ix] The EWA is a member-led association, tasked with ensuring quality standards of whiskey production, promoting the benefits of local sourcing, and advancing sustainability efforts throughout the whiskey industry.[x] The EWA utilizes certification marks, a type of trademark regulated under the Lanham Act, to enhance product recognition and ensure trustworthy characteristics of whiskey product, while functioning as key trade and marketing tools for the industry.[xi] A whiskey product may be certified as “Estate Whiskey” if two-thirds of the grains used in the mash bill come from estate-owned or controlled land.[xii]

Certification marks are used to “identify the particular quality or level of standard inherent in the products or services of other businesses.”[xiii] “This quality or standard typically identifies or ‘certifies’ the presence of characteristics of the good or service such as a particular regional or other origin; a specific material or mode of manufacture; quality, accuracy, and other characteristics typically sought after in the particular product.”[xiv] These marks may be presented as “any word, name, symbol, or device, or any combination thereof.”[xv] Certification marks affect consumer psychology by ensuring top-notch quality and honest means of production.[xvi] Ultimately, these marks verify that the good or service is in compliance with a set of standards or regulations, which reduces “the risk of purchasing subpar or unsafe products.”[xvii]

The EWA consortium supports scientific research in agriculture and sustainability, innovating the future of whiskey production through a trademark licensing program.[xviii] Any member or producer of the whiskey industry is invited to become a consortium member of the EWA.[xix] The unprecedented trademark licensing program is exclusive to whiskey producers who meet rigorous certification standards.[xx] The certification will authenticate Estate Whiskey with a familiar mark, a certification mark, common to all products that qualify.[xxi] Utilizing a certification mark on Estate Whiskey builds consumer trust by guaranteeing the producers met “rigorous quality and sustainability standards.”[xxii] In addition, the EWA places a large focus on production transparency through the use of locally grown ingredients, further relieving consumer confusion or distrust.[xxiii] Thus, consumers are guaranteed that all products using allowed the Estate Whiskey Certified mark were thoroughly inspected by certification audits and adhere to high-quality standards.[xxiv]

In sum, certification marks can promote sustainability, foster economic growth, and bolster consumer trust. The EWA’s use of certification marks will result in a plurality of economic, societal, and sustainable benefits for the whiskey industry. While critics argue that the imposition of certification marks will heighten barriers to entry for small producers and stifle innovation, these marks will provide businesses and producers a way to differentiate themselves and gain access to the whiskey market through authenticity and quality assurance. Ultimately, certification marks should be increasingly utilized to sustain natural resources and foster increased market success through competitor protection and consumer satisfaction, while protecting the valuable, intellectual market of the whiskey industry.

[i] Chioke A. Okolo et al., Recent Advances in Whiskey Analysis for Authentication, Discrimination, and Quality Control, 22 Comp. Rev. Food Sci. Food Safe 4957 (2023), https://ift.onlinelibrary.wiley.com/doi/10.1111/1541-4337.13249 [https://perma.cc/24UZ-SKZZ]; Estate Whiskey Alliance, https://estatewhiskey.org/ (last viewed Sept. 13, 2024) [https://perma.cc/4XK6-NBWS].

[ii] See Estate Whiskey Alliance, supra note 1; see also CMI Market Research Private Limited, [Latest] Global Flavored Whiskey Market Size/Share Worth USD 105.18 Billion by 2032 at a 6.2% CAGR: Custom Market Insights (Analysis, Outlook, Leaders, Report, Trends, Forecast, Segmentation, Growth, Growth Rate, Value), GlobeNewswire News Room (Feb. 15, 2024), https://www.globenewswire.com/news-release/2024/02/15/2830216/0/en/Latest-Global-Flavored-Whiskey-Market-Size-Share-Worth-USD-105-18-Billion-by-2032-at-a-6-2-CAGR-Custom-Market-Insights-Analysis-Outlook-Leaders-Report-Trends-Forecast-Segmentation-.html [https://perma.cc/3LFV-AAFP].

[iii] A Booming Bourbon Industry Has Kentucky Leaders Toasting Record Growth, US News & World Report (Feb. 6, 2024), www.usnews.com/news/business/articles/2024-02-06/a-booming-bourbon-industry-has-kentucky-leaders-toasting-record-growth [https://perma.cc/356L-8DQJ].

[iv] The Whiskey Industry’s Looming Crisis, Two-Nineteen, https://www.two-nineteen.com/blog/the-whiskey-industrys-looming-crisis (last viewed Sept. 7, 2024) [https://perma.cc/ZR59-8L8M]; Nino Kilgore-Marchetti, As the Secondary American Whiskey Market Grows, How Many More Brands Will Fit?, VinePair (Mar. 1, 2024), https://vinepair.com/articles/growing-whiskey-secondary-market/ [https://perma.cc/AH32-DRJH].

[v] Id.

[vi] The Problem with Whiskey from the Indiana Mega Distillery, 50 States of Whiskey (Dec. 3, 2015), https://50statesofwhiskey.wordpress.com/2015/12/03/my-problem-with-whiskey-from-the-indiana-mega-distillery/ [https://perma.cc/GQ4P-MXDG]; Sally Herships, Whiskeys Have to Age for Years, so How Do Distilleries Make Money?, Marketplace (Mar. 7, 2016), https://www.marketplace.org/2016/03/07/iaw-whiskey/ [https://perma.cc/PY9F-ZNDL].

[vii] See Estate Whiskey Alliance, supra note 1.

[viii] Ruben Mejia, Bourbon: Innovation and Tradition in 2024, My Bev Store (Mar. 22, 2024), https://mybevstore.com/blogs/news/bourbons-bright-future-embrace-innovation-and-tradition-in-2024-and-beyond [https://perma.cc/E8TL-K2KA]; see also Estate Whiskey Alliance, supra note 1.

[ix] See Estate Whiskey Alliance, supra note 1.

[x] Id.

[xi] A closer look at certification marks and their value to consumers and businesses, Exec. Educ., https://www.exec.auckland.ac.nz/the-value-of-certification-marks/#:~:text=For%20businesses%2C%20certification%20marks%20are,with%20small%20size%20and%20isolation [https://perma.cc/MKV3-JHMV].

[xii] See Estate Whiskey Alliance, supra note 1.

[xiii] Alex Butterman, What is a Certification Mark and do I Need One?, Dunlap Bennett & Ludwig (Aug. 14, 2022), https://www.dbllawyers.com/what-is-a-certification-mark/ [https://perma.cc/PK7N-TMMZ].

[xiv] Id.

[xv] 15 USCS § 1127.

[xvi] Id.

[xvii] Certification mark, LII, Legal Info. Inst., https://www.law.cornell.edu/wex/certification_mark (last viewed Sept. 30, 2024) [https://perma.cc/NY42-9UJK]; see also Thomas Galvani, Understanding Certification Trademarks: A Comprehensive Guide, Thomas W Galvani, PC (May 30, 2023), https://galvanilegal.com/understanding-certification-trademarks-a-comprehensive-guide/ [https://perma.cc/MRZ3-6QQ3].

[xviii] See Estate Whiskey Alliance, supra note 1.

[xix] Id.

[xx] Id.

[xxi] Id.

[xxii] Id.

[xxiii] Id.

[xxiv] Id.