Gary Hinshaw tests the proof of the whiskey at the George Dickel Distillery near Tullahoma, Tenn. in this Sept. 16, 2003 file photo.

Whiskey Shortage Possible With Soaring Demand

Whiskey distillers struggle to kick it into high gear with sales surpassing production.

Gary Hinshaw tests the proof of the whiskey at the George Dickel Distillery near Tullahoma, Tenn. in this Sept. 16, 2003 file photo.

Gary Hinshaw tests the proof of the whiskey at the George Dickel Distillery near Tullahoma, Tenn. on Sept. 16, 2003. Whiskey's popularity is outstripping the industry's production capacity leaving some worried about a shortage.

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Whiskey’s recent soar in popularity in the U.S. and abroad has Tennessee distilleries ramping up production rates and looking forward to meet future demand. But with consumers grabbing bottles like Jack Daniel's off the shelves at least twice as fast as they are being produced, a possible shortage looms ahead.

Annual sales reached a 10.2 increase from the past year and exports of bourbon and Tennessee whiskey surpassed $1 billion last year, the Distilled Spirits Council told The Tennessean.

The council attributed part of the industry boom to other countries whose tariffs on imported spirits have been reduced or eradicated, the newspaper reported. Small craft distilleries have also added to the hype.

[READ: Jack Daniel's Fights Fellow Liquor Giant, Smaller Distillers Over Tennessee Whiskey Law]

“They’re making whiskey more exciting and bringing more people to the whiskey segment. They’re popping up all over, in convenient tourist places, and they’re driving more tourism business for us. It’s fascinating,” Jack Daniel's master distiller Jeff Arnett explained.

Jack Daniel's is one of the most well-liked whiskeys, with its trendy flavors including Tennessee Honey and Tennessee Fire cinnamon whiskey, which are available in Tennessee, Oregon and Pennsylvania, Arnett told The Tennessean.

But distillers face two major problems, the New York Daily News noted.

For one, quality whiskey cannot be made at the drop of a hat.

“It’s not like you can ramp up production today and have that whiskey on the market tomorrow,” Clayton Cutler, chief distiller at the TennSouth Distillery in Lynnville, told The Tennessean.

It takes a minimum of a couple of years for whiskey to be aged properly.

“We’re always putting down more whiskey each year but the fact is that it is very, very expensive to create whiskey that has a payback that’s two, three, four, five years into the future,” he added in an interview with USA Today.

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In addition to this long and unpredictable process, the small distillers mentioned by Arnett are running out of oak barrels. Cutler told the paper that TennSouth Distillery is searching for a new barrel supplier because its current company is already out of the traditional 53-gallon size for the rest of the year.

Other distillers, like Phil Prichard of Lincoln County, have additional advantages that could work in their favor. Prichard sells rum in addition to whiskey and believes that his rum sales will save him from having to keep up with whiskey demand, according to The Tennessean.

“If I were only in the whiskey business, I might be crying in my glass right now,” he said.