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Jeff Taylor
Jeff Taylor
Commissioner
Business Development

Kentucky Cabinet for Economic Development
800.626.2930
502.564.7670
Jeff.Taylor@ky.gov

Andy Beshear
Governor
Old Capitol Annex
300 West Broadway
Frankfort, KY 40601
Larry Hayes
Interim Secretary
2021-11-01
For Immediate Release
 
Jack Mazurak
502.782.1965


Innovators Pitch Ideas for Handling Kentucky Bourbon Industry’s Surplus Stillage

Louisville team takes top prize with plan to convert spent grains into sweetener, activated carbon and animal feed


FRANKFORT, Ky. (Nov. 1, 2021) – Innovators from across the United States came together last week during the Distillers Grains Reverse Pitch Competition to propose ways to use stillage produced by Kentucky’s signature bourbon industry.

BioProducts of Louisville was selected by the judges as the first-prize winner. SoMax Circular Solutions of Philadelphia was chosen as runner-up and voted crowd favorite. BioProducts’ concept includes a process that yields xylose, a low-calorie sweetener, and activated carbon, which has applications for battery cells. The first-prize winner received a spot to present at the James B. Beam Institute of Kentucky’s conference and a collection of bourbon donated by the Kentucky Distillers’ Association.

“I want to congratulate all those who answered the call to address an issue facing one of our state’s signature and already soaring industries,” said Gov. Andy Beshear. “It is inspiring to see so many innovators approach this challenge as an opportunity to ensure the bourbon boom continues well into the future. Whether it’s our native beverage or automotive manufacturing, Kentuckians are and will continue to create sustainable technologies that support our industries and create good-paying jobs.”

With the number of Kentucky distillers increasing 250% over the past decade, the need to address the industry’s spent-grain byproduct has grown. For every gallon of bourbon produced, approximately 10 gallons of stillage remains. Currently, the demand for stillage – including traditional low-tech uses – is declining as the supply of stillage increases. The call went out to innovators over the summer to submit ideas for stillages solutions that prioritized sustainability and environmental impact; demonstrated an economic value to the distillery and the end-user of the stillage; and highlighted the scalability of the solution among others.

The pitch competition, the first of its kind related to addressing the stillage issue, was held at the 25th Distillers Grains Symposium at the Downtown Louisville Marriott for an audience of distillers and industry stakeholders. The event was hosted through a partnership between the Distillers Grains Technology Council, the James B. Beam Institute for Kentucky Spirits, Innovation Incubated, the Energy and Environment Cabinet, and KY Innovation, the Kentucky Cabinet for Economic Development, with support and guidance from the Kentucky Distillers’ Association.

“It was inspiring to see such creative ideas to allow one of Kentucky’s signature industries to grow while protecting our natural resources,” Energy and Environment Secretary Rebecca Goodman said. “We believe that energy, environment and economic development must go hand in hand, and environmentally conscious solutions like these make economic growth all the more sustainable.”

Kentucky Distillers’ Association President Eric Gregory said the reverse pitch competition spreads the industry’s momentum in a new direction.

“The dramatically increasing global demand for Kentucky bourbon fuels the commonwealth’s economy through our state’s farming, distilling, retail and tourism industries. Now we can see opportunities for new business models taking shape in other industries that could benefit Kentucky,” Gregory said. “We at KDA are proud to support this kind of innovative thinking that increases the sustainability and long-term growth of Kentucky bourbon.”

BioProducts’ presentation was delivered by company founder and CEO Dr. Jagannadh Satyavolu and Cliff Speedy of C&I Engineering, which is a partner on the project. The company has plans to build units capable of handling 75,000 gallons of stillage a day and converting it into the diabetic-friendly sugar substitute, activated carbon and biocoal, and a protein that can be used in animal feed.

The other presenters were:

Dan Spracklin with SoMax Circular Solutions
Pennsylvania based SoMax Circular Solutions uses hydrothermal carbonization (HTC) to recover valuable byproducts from spent grains. The process converts the stillage into solid carbon-neutral biofuels, clean water and nutrients. Thermal energy and clean water can be used by the distillery, reducing expenses and carbon footprint. 

Eric Jens and Steve Wesley with Local Sols 
Chicago-based Local Sols upcycles spent grains into branded premium pet and plant foods using a combination of black soldier fly larvae and red wigglers to rapidly transform spent grains into raw protein. This model is scalable and not only allows the distillers to brand a sustainable bottle, but also provides pet food branding sourced with sustainable protein, reducing the amount of land, water and greenhouse gases produced by traditional pet food manufacturing.

Brandon Corace and Don Corace with Meridian Biotech
Texas-based Meridian Biotech is an industrial biotech company with experience in the ethanol/alcohol industry. Meridian Biotech pitched a plan to process excess stillage into alternative by-products used in aquaculture fishmeal and pet food industries.

George Bower with Biogas Technology Group
Lexington-based Biogas Technology Group proposed the development of a 500,000 ton/year centralized facility in Marion County to process and convert raw stillage into recoverable products. The facility operates patented technology with zero process emissions and converts the stillage to renewable natural gas, CO2 and other commercial products. The system is a low energy input alternative to traditional dry-houses.

John Wright with Continental Refining Co.
Somerset-based Continental Refining Co. LLC pitched a method of processing distillers’ grains to extract vegetable oil and animal feed byproducts. Their model included an off-site location for distillers to deliver their wet stillage, thus creating no additional investment for the distillery.

Kentucky’s spirits industry includes approximately 70 facilities that employ more than 5,100 people. Since the start of 2020, the commonwealth’s spirits industry saw more than 30 new-location or expansion announcements with over $550 million in planned investments and approximately 500 new full-time jobs announced.

Job creation and investments by Kentucky’s spirits industry continues to drive recent economic momentum in the commonwealth, as the state builds back stronger following the effects of the pandemic.

This year, the commonwealth has shattered every economic development record in the books for yearly investment totals across all service, technology and manufacturing sectors. Year-to-date, private-sector new-location and expansion announcements include over $8.85 billion in total planned investment and commitments to create 12,500 full-time jobs across the coming years. Through September, Kentucky’s average incentivized hourly wage is $24.15 before benefits, a 10% increase over the previous year.

In September, Gov. Beshear, Ford Motor Co. Executive Chair Bill Ford and CEO Jim Farley, along with Dong-Seob Jee, president of SK Innovation’s battery business, announced the single largest economic development project in the history of the commonwealth, celebrating a transformative $5.8 billion investment that will create 5,000 jobs and places Kentucky at the forefront of the automotive industry’s future.

In July, thanks to strong fiscal management by the Beshear administration, the state budget office reported the commonwealth ended the 2021 fiscal year with a general fund surplus of over $1.1 billion – the highest ever in the commonwealth – and a 10.9% increase in general fund receipts to $12.8 billion.

In May, Moody’s Analytics published a positive economic outlook for Kentucky, noting mass vaccination as the driving force behind a sustained recovery in consumer services. The state’s recovery, Moody’s said, benefited from earlier reopening efforts and increased demand for manufactured goods over services. The report also found Kentucky’s manufacturing industry outperformed the nation’s since the national downturn last year.

Fitch Ratings in May improved the state’s financial outlook to stable, reflecting the commonwealth’s solid economic recovery. The state’s April sales tax receipts set an all-time monthly record at $486.5 million, as did vehicle usage tax receipts at over $64 million.

In March, Site Selection magazine’s annual Governor’s Cup rankings for 2020 positioned Kentucky atop the South Central region, and third nationally, for qualifying projects per capita. The commonwealth also placed seventh overall in total projects, the highest of any state with a population under 5 million. Site Selection also recently placed Kentucky in a tie for fifth in its 2021 Prosperity Cup rankings, positioning the state among the national leaders for business climate.

More information on the Governor’s AgriTech Initiative is available at AgriTech.ky.gov.

Information on Kentucky’s economic development efforts and programs is available at CED.ky.gov. Fans of the Cabinet for Economic Development can also join the discussion at facebook.com/CEDkygov, on Twitter @CEDkygov, Instagram @CEDkygov and LinkedIn.

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