Fans of some American whiskies might soon be scrambling to find their favourite brand because of a seemingly insatiable demand for bourbon, rye and other styles of whisky that shows no sign of abating.

Consumption in the U.S. of straight American whisky, a category that includes bourbon, rye, corn whisky and Tennessee whisky, grew by 5.2 per cent in 2012, compared with 3.5 per cent in 2011, said a report released this week by Technomic, a food industry market research firm.

The increase in consumption was almost as large as that for vodka, which has a market share four times that of whisky and a consumption increase of 5.8 per cent in 2012.

The growing appetite for whisky has created supply pressures on some distilleries, particularly those that specialize in small-batch, premium products that have been rising in popularity, in part owing to a growing consumer movement that favours artisanal, locally sourced, niche products and production methods.

"It's primarily the smaller producers who have limited capacity that are dealing with this issue, although Maker's Mark, which is the fourth-largest straight American whisky in the U.S. market, is facing challenges to supply based on increased demand," said Donna Hood Crecca, senior director of Technomic's adult beverage resource group.

Kentucky distilleries expanding

Maker's Mark, which is owned by Beam Inc., makers of Jim Beam and Canadian Club, made news earlier this year when it announced that it would be watering down its bourbon in order to reduce its alcohol content so it could produce more product to meet rising demand. It backpedalled after an outcry from customers, who began hoarding the higher-proof bourbon in anticipation of the change.

Some of the popular bourbon brands sold by Beam Inc., the world's biggest producer of American whisky. It also owns Canadian Club whisky. (Rick Wilking/Reuters)

The scare increased sales of Maker's Mark by 44 per cent in the first quarter of 2013, leading some to speculate that the whole thing was a shrewd marketing strategy.

Other distillers in Kentucky, where much of American whisky is made, have also been scrambling to satisfy the growing appetite for all styles of whisky.

Heaven Hill, a family-owned distillery that is the second-largest holder of bourbon and American aging whisky after Beam, is undergoing its second expansion in seven years and is building a new visitors centre in downtown Louisville, Ky.

Its flagship bourbon brand, Evan Williams Black, saw a six per cent increase in sales in 2012, said Larry Kass, director of corporate communications for Heaven Hill Distilleries.

"Both on the production side and from the tourism and marketing end, we and several other distilleries are making major investments," he said.

No sign of slowdown

Kass has been watching sales of American whisky skyrocket at home and abroad for the last decade.

"The rise of distilled spirits, cocktails and that whole thing, that has been going on for at least 10 years, but more specifically, bourbon, because of the nature of how it's made, the very traditional method that's used, the fact that there's nothing artificial about the whole product, it plays very well into the whole locavore, slow food movement that's going on right now."

Whisky has to be aged for several years in barrels like this one at the Woodford Reserve distillery in Versailles, Ky., which means it's sometimes hard for producers to increase supply quickly enough to meet rising demand. (Martinne Geller/Reuters)

The trend shows no sign of slowing down, he said, which is what has made distillers confident enough to invest heavily in their operations.

"There's no reason to believe that this is going to change dramatically. We all believe firmly that the growth trends in American whisky will continue," he said.

Buffalo Trace, another Kentucky distillery, which is owned by the Sazerac Company, issued a press release earlier this week warning customers that, despite an increase in production, demand is outpacing supply.

"We are making more bourbon every day. Our warehouses are filling up with new barrels," the release said. "Waiting for the bourbon to come of age is the hard part. While we wait, there could be temporary product shortages.… This announcement is not meant as some sort of scare tactic to get people hoarding bourbon."

Kass said that his company isn't experiencing shortages, but "supplies are tight."

"But they tend to be historically tight in the bourbon business," he said. "The nature of our business is we need to project demand very far in the future."

Many whisky types on the rise

While American whisky has seen the biggest sales boost, other types of whiskies are also on the rise, Kass said.

"A lot of different styles of whisky are popular right now," he said. "There's all these great expressions of Canadian whisky now that you never used to be able to get, so that's experiencing a bit of a renaissance as well."

The Technomic report found that other types of whisky did not see as great a rise in demand last year as straight American whisky. Consumption of American blended whisky declined by one per cent while Canadian whisky remained essentially flat, with only a 0.7 per cent uptick.

"Scotch whisky slipped slightly (–0.2 per cent), although the single malt Scotch segment grew 6.3 per cent," Hood Crecca said in an email to CBC News.

Irish whisky saw a double digit gain as in the previous year (+21.6 per cent), but that's because it is the smallest category of spirits in the U.S. market, she said.

Whisky catching up to Vodka

Canadian distillers have also been tracking the rising popularity of whiskies, says Jan Westcott, president and CEO of Sprits Canada, the national trade association for distilled spirits.

"After 25 years of vodka, vodka, vodka, whiskies are back in front of consumers, and North American whiskies in particular, particularly rye whiskies, seem to be really of interest," he said.

Vodka was the drink du jour in the 1990s and early 2000s, spurred by the popularity of the TV show Sex and the City, whose characters drank cosmopolitans. Above, a vodka-based cocktail. (Lucas Jackson/Reuters)

"We have a lot of U.S. companies coming up and buying rye from us and rebranding it."

More than 15 million cases of Canadian whisky were sold in the U.S. in 2011, according to the Beverage Information Group's Liquor Handbook. (A case is equivalent to nine litres, or 12 750 ml bottles, and is the standard measure in the industry.)

Canada exports 70 per cent of the whisky it produces, about 60 per cent of it to the U.S., and the rest to Europe and Asia, Westcott said.

Canadian brands like Crown Royal, Wiser's and Canadian Club are usually shipped south as bottled products, but some whisky is exported in bulk and either sold as Canadian whisky under American brands or blended and sold as other types of whisky.

Canadian domestic consumption of whisky has risen by almost a million litres between 2010 and 2012, according to Spirits Canada figures (see a full breakdown here). Canadian whisky accounted for 72 per cent of the 4.7 million cases of whisky sold in 2012 — about 3½ times more than Scotch, the second-most popular whisky.

No shortage in Canada

Westcott says Canadian producers haven't reported any shortages but stressed that balancing supply and demand can be tricky in the whisky business.

"The reality is, because you have to age whisky, it's very challenging to be able to forecast what the market is going to require," he said.

Whiskies have to age in the barrel anywhere from five to 30 years. In the past, producers have run out of a certain age category and had to use older whiskies in order to "keep the brand in front of people," Westcott said.

Most of Canada's whisky is produced in Ontario, with Alberta being the second-largest producer and some distilleries in Quebec and Manitoba. The whisky produced in Eastern Canada is generally corn-based with rye flavouring while western whiskies are made from rye.

The Mad Men effect

Westcott attributes the rising popularity of whisky to a combination of pop culture influences, an appetite for new products with more complex flavours and a story behind them and a renewed interest in premium products that can brand themselves as something legitimately unique and prized.

The popularity of the TV show Mad Men, whose leading man, Don Draper, above, is often seen drinking Canadian Club whisky, has fuelled some of the rising interest in the spirit. (Michael Yarish/AMC/Associated Press)

"It was Sex and the City that drove interest in martinis, cosmos, things like that [in the '90s]. Vodka's had a strong run for a long time, but the public said, 'OK, we've tried that; what's next?'" he said. "Programs like Mad Men, where Canadian Club figures prominently, [have] driven that. It's a maturing of consumer tastes. They're looking for something that's a little bit more interesting.

"The first challenge in the '90s and in the early 2000s was to get them back to spirits. They're back, and it's just a natural progression. You're seeing it most in whiskies, but it's also quite significant in dark rums."

The introduction of flavoured whiskies has also helped expand the spirits market share, Westcott said. Crown Royal now has a maple-flavoured whisky while Alberta's Black Velvet sells a toasted caramel whisky and Wiser's carries a spiced vanilla flavour. The Technomic report found that Fireball Cinnamon Whisky, a spicy Canadian whisky liqueur, was among the fastest-growing brands in the U.S. in 2012.

"That's bringing a lot of people into the category that would never have seen themselves as whisky drinkers — for example, women, who tend not to think of themselves as whisky drinkers," Westcott said.