The Taste of Kentucky Identity
How Diaspora Identities Impact the Economy, But Don’t Get Studied
I’ve written fairly extensively about migration in Kentucky, and will continue to look at more Kentucky regions going forward. But there’s actually something of a debate in migration studies about whether we should focus our study on places or on people. What I’ve done so far is mostly a study focused on places. But now I want to change courses, and talk about people, specifically Kentucky people, in my opinion the finest folk in this great nation. In this post, I’m going to talk about what I think is one of the most fun topics in migration studies: nostalgia trade.
Nostalgia trade means buying certain goods because it gives you a sense of being “home” when you’re away from home. We all do this in some way: whether its food from home, clothing items branded for our alma mater, or other products that are specific to our state or city, most Americans like some kind of local product. I recently completed original research, surveying Kentuckian consumption of two nostalgic goods: Ale8–One soda and Kentucky bourbon (can e-mail PDF for anyone interested; working copy currently). To my knowledge, my study was the first to systematically explore nostalgic trade in a domestic context. But before I get into the fun stuff (such as answering weirdly detailed questions about why people drink bourbon), I should give some background.
Migrant Economic Engagement: How Does Migration Change Our Economic Behavior?
In studies of international migration, experts often talk about what they call “transnational economic engagement.” This means economic activities that are unique to “transnational” communities. Transnational just means they have substantial ties to multiple nations. The big examples are the “5Ts” listed below:
- Transfers of money (remittances, investment, philanthropy)
- Trade in nostalgic goods
- Travel home, for family, tourism, work, etc.
- Telecommunications, calls home
- Transportation linkages like airline routes
In other words, these are 5 channels through which migrants maintain special economic ties to their home regions, thereby impacting home region economies. The elephant in the room for this list is transfers of money, specifically remittances. Remittances amounted to over $500 billion in 2013. That’s a huge amount of money, especially since about 80% of that money goes to poorer countries, so it can end up being a large share of the total economy. For example, in 2012, remittances amounted to about 48% of the economy of Tajikistan.
The other economic engagements are large too, but there’s much less data for them. Nostalgic trade is extremely prominent among international migrant communities in the US, amounting to at least tens of millions of dollars of trade. Investment by migrants in home-country projects, philanthropy through home-town associations, travel home, calls home, all of these alter the economy of the home region, generally in the direction of higher incomes and faster development.
It’s a pity we don’t have more data on these phenomena, because these things are the bread-and-butter of the migrant economic experience. We need to know how migration changes people, how it alters their consumption and spending, and what motivates people to undertake certain economic activities. In international migration, there is at least some research of these topics, but probably not enough.
Domestic Diasporas: Unstudied Economic Engagement
At the domestic level, these concepts are even less studied. To my knowledge, my study of Kentuckian consumption of Ale8 and bourbon was the first systematic analysis of domestic nostalgia trade. There is virtually no publicly available data that provides information about domestic flows of household financial support around the nation that can compare to international remittance data. Studies of domestic diaspora philanthropic and investment networks are very hard to come by.
Domestic diasporas are an invisible community, until disaster strikes them. The Okies of the Great Depression, the black migrations that later provided the urban poor populations of northern cities today, pervasive Appalachian out-migration, have all led to studies of “domestic diasporas,” though mostly from a cultural or sociological perspective. Aggregated research of net migration is also common, but it’s extremely challenging to find studies treating domestic diasporas with the same level of economic conceptual depth as is given to international communities. Nobody studies the remittance-sending behavior of oil-field workers in North Dakota or west Texas. Nobody tries to figure out whether the New Yorker diaspora in North Carolina sticks together to to provide philanthropy back home. There’s no impact study assessing how Texan state pride drives asymmetrical tourism relationships.
With survey-based studies like mine summarized here, we can start to fill that gap, and explore how domestic diasporas reshape their home economies, and their host-economies.
What are Ale8 and Bourbon?
Ale8 is a caffeinated ginger-ale soft drink that’s produced in Winchester, Kentucky. It’s sold in the geographic range presented at left, however, I’ll say from personal experience that the map shown here is pretty generous. In reality, finding Ale8 in the Tennessee, Ohio, and Indiana areas shown may be possible, but it isn’t always easy. It’s really only in Kentucky that Ale8 is widely available. That makes sense, given that it’s an officially recognized Kentucky soft drink. It’s also the only soda that I consume, because I dislike carbonation: I consume it out of raw and unfettered patriotism.
The map at left shows the Kentucky bourbon trail. As I’ve explained before, bourbon is big in Kentucky. As in, about 2–4% of the entire economy big, which is really, really big for one alcoholic beverage. Ale8, a defining cultural staple of Kentucky, has about $10-$20 million in sales annual. The bourbon industry has billions of dollars in sales. For those who don’t know, bourbon is a brown liquor distilled from at least 50% corn mash, and aged in special white oak barrels.
So Tell me Some Fun Ale8 and Bourbon Facts Already, I’m Bored!
You got it!
How do People Encounter Ale8 and Bourbon?
Ale8 and bourbon are particular products from particular places. How do people run across them?
There are a few interesting points to note here. First, diaspora are more likely to have “grown up” around nostalgic goods than current Kentucky residents: that’s fairly obvious, because many current Kentucky residents didn’t grow up in Kentucky. Second, diaspora individuals are vastly more likely to say that bourbon was part of their family life: maybe families that drink bourbon have more out-migration, or maybe once you migrate, you start missing your family, and so you start making associations.
Third, a saddeningly large number of people were given a truly abusive introduction to bourbon in the form of a mixed drink: people, we all know that, while mint juleps and Kentucky highballs may be appropriate for special occasions, bourbon is rightly drunk on the rocks. Bourbon, by definition, must be additive-free, so why mess with the craft? (Full Disclosure: I’m a teetotaller so I’m purely speaking from observation)
Overall, though, we see some fairly consistent patterns. Current Kentucky residents are more likely to have a later-in-life first encounter, while the Kentucky diaspora is more likely to recall an earlier first-encounter.
How Much Ale8 and Bourbon do Kentuckians Drink?
Here I need to offer a note of caution: my sample is somewhat biased. My surveyed population is much younger and substantially better educated than the general population of Kentucky, and also somewhat younger and better educated than the general diaspora population. However, while I’ll make a careful generalization below that accounts for this difference, for now it’s enough to just compare my two sample populations without generalizing about the rest of society.
Kentucky residents drink more Ale8 than the Kentucky diaspora, but the diaspora outdrinks residents when it comes to bourbon.
Ale8 is an interesting case. As I outlined earlier, it’s hard to get outside of Kentucky. For myself, I acquire stock up every time I return home to Kentucky, and bring between 3 and 10 six-packs back to DC. Other individuals I surveyed testified to finding Ale8 stocked “informally” at bars or convenience stores owned by Kentuckians. The Ale8 company will also ship the soda willingly enough, but after shipping, the net price is substantially above the store price in Kentucky. One novelty soda store in Frederick, Maryland apparently carries Ale8 as well. The point is, it is amazing that the Kentucky diaspora drinks any Ale8 with regularity. In my sample alone, we’re talking about dozens of people using informal networks of couriers, direct shipping, and diaspora-owned businesses to bootleg a random ginger ale across the country. This is gold-plated proof that nostalgic trade happens among domestic diasporas just like it does among international diasporas. If ever something demonstrated that we need more study of domestic diaspora economic engagements similar to those of international diasporas, it’s that many Kentuckians are manage to consume thousands of calories a month of a soda that isn’t regularly sold within hundreds of miles of them.
Bourbon is more widely available, and the diaspora consumes more of it. Even when I specify a regression to control for age differences, the diaspora consumes more bourbon, and residents are more likely to abstain from bourbon. Because bourbon is widely available, it gets consumed to an unusually high degree among the diaspora. But that’s not all: I also asked people to tell me about how their bourbon brand preferences change when they’re out of state.
Heads up to bourbon producers: at least among Kentuckians, premium brands decline in popularity outside of the state. Among the most common responses I got were people substituting Jim Beam for for pricier brands when away, and a very high number of people who like to stock up on Woodford Reserve when they visit the state. The only brand that had explicit brand loyalty with respondents saying they only ever by that brand was Maker’s Mark: so well done to them for building exceptional brand loyalty. Other brands that get more purchase in Kentucky by out-of-staters were Four Roses, Bulleit, Noah’s Mill, and Willett. Multiple respondents complained about living in “control states” where liquor sales are government-run, leading to much diminished selection and increased prices. Overall, though, there was clear evidence of a shift down the quality scale when buying out-of-state, but simultaneous evidence that the diaspora stocks up when they visit home. Several respondents talked about buying lots of bourbon to keep for gifts during the year, an issue I’ll return to.
Why Do People Drink Ale8 or Bourbon?
The simplest way to explore nostalgic trade is just to ask people why they do what they do (this question is overlooked with surprising frequency by economically-oriented researchers). So I asked.
Once we ask people why they drink, the case for nostalgia trade becomes even more clear. For both bourbon and Ale8, diaspora respondents were far more likely to select reasons for consumption related to a sense of home, state pride, and local business support. This despite being less likely to have Ale8 or bourbon as “primary” beverages in the area. This is direct and explicit evidence of nostalgic trade.
I have more data on this. I also asked respondents about their sharing and gifting habits. It turns out that the Kentucky diaspora is even more likely to give or share bourbon and Ale8 with others than they are to drink it themselves, and they do this gifting or sharing for the same highly nostalgic reasons. In this sense, “diaspora identity” is what we could call a performative identity. People adopt state pride as a way of differentiating themselves from others. Kentuckians who might never watch a UK game become fans when they’re out-of-state. Or, put more proverbially, “distance makes the heart grow fonder.” But I’ve offered you plenty of graphs, so I won’t go over every question.
So Just How Big is Nostalgic Trade?
So I’ve proven that nostalgic trade exists. That’s big, because it hasn’t been systematically proven before at a domestic level. But its existence is not interesting if it’s vanishingly small. So I’ve also tried to estimate the size of the nostalgic market for bourbon and Ale8.
I won’t bore you with too much math. Suffice to say I used the Kentucky migration data I’ve been showing off, combined with liquor sales data from the 2014 bourbon impact study and data from the Distilled Spirits Council of the United States, to estimate the total market size for bourbon, and used publicly available estimates of Ale8's pricing and sales for the Ale8 market. Then I made some ranges of estimates: how similar is my sample to the general population? How many Kentucky out-migrants are actually “Kentuckians” who will continue to identify as such? I use a very, very wide range of “best-guesses” based on the data for these types of variables, and then computed total consumption results based on my survey data. Then I adjusted that total consumption for what share of consumption is likely motivated by “purely nostalgic” concerns. The results are striking.
Nostalgic consumption of Ale8 provides between $1.9 and $5 million in sales a year for the Ale8-One Bottling Company. Given that Ale8's annual revenues are $10-$20 million total, I would estimate that between 10% and 30% of Ale8's total sales are to a nostalgic market looking for a taste of home. These sales may be shipped out of state directly, may be sold through regular distributors, or may be bought by Kentuckians in-state then taken out of state for consumption or resale. But the point is, that’s a huge chunk of the sales of a quintessentially Kentucky company. In other words, nostalgic trade is an essential component of at least one firm’s successful business strategy. Other companies might be able to exploit this too, especially companies that produce food produces and apparel associated with a state or region. When consumers buy these goods, they’re buying identity as much as they’re buying drinks or clothing.
Nostalgic consumption of bourbon provides between $10 and $80 million in sales a year for Kentucky bourbon producers. I have no data on the sales of Kentucky bourbon producers specifically, but this would amount to between 0.2% and 1.5% of the total Kentucky bourbon and Tennessee whiskey market (and a larger share if I had just Kentucky bourbon sales data). That’s still a significant share and, again, represents just consumption by Kentuckians for explicitly nostalgic reasons. This is consumption by folks who aren’t buying for taste or alcohol content. These are fiercely loyal consumers who carry the brand at times when the rest of the market may be weaker. Right now, bourbon sales are booming, but they may not last for ever. At the same time, the bourbon industry has been extremely effective at capitalizing on Kentucky cultural identity claims, promoting “Bourbon Trail” tourism as a form of nostalgic consumption or heritage tourism. This is yet another example of how nostalgic consumption can be a valuable component of a business strategy.
In poorer areas experiencing out-migration, like rural Kentucky, nostalgic trade can provide opportunities for local businesses to capture niche markets and get higher income. Nostalgic trade is the polar opposite of “local consumption”: you buy something because it is from far away (i.e. home). Yet it is intensely local, disproportionately providing revenues for traditional sectors and small businesses tightly connected to migrant-sending communities. Nostalgic trade is a win-win way for migrants who “make something of themselves” to get something valuable for themselves and promote development in their home region. By and large, there are few legal barriers to such trade in the US (besides alcohol control laws), but still many practical barriers. But by connecting with diaspora communities, local businesses can build niche markets for themselves as “authentically Kentucky” products.
Nostalgic trade in Ale8 and bourbon doesn’t have very many profound policy ramifications. I wish I could say that there was a really important public policy point to studying Ale8 and bourbon but, honestly, there’s not, except for development organizations looking for projects to carry out.
But by demonstrating the existence and size of nostalgic trade through an easily-administered survey, I’ve also demonstrated the potential for wider studies of diaspora economic engagement. Why aren’t we surveying North Dakotan oil field workers about remittances sent home? That’s a huge economic question if we want to understand what impact fracking has on communities and the economy at large. Why aren’t we surveying how alumni networks transfer financial resources to home states, and viewing it as an essential economic development activity? We aren’t we looking at parental support for colleges as a wealth transfer from migrant-sending regions to migrant-receiving regions? One reason is that there are data limitations.
But I think a bigger reason is cultural limitations. We don’t survey these things because we just assume we’re a homogenous nation. In fact, we’re not. We’re a megadiverse third of a continent replete with extraordinary difference and massive asymmetries and imbalances. Furthermore, if we were to start collecting this data, we might arrive at inconvenient conclusions: college and hospital towns in poor states may soak up the accumulated financial wealth of poorer areas, a far more pernicious trend than “brain drain” itself. States that pride themselves on their environmental record may depend on financial transfers from workers in out-of-state oil fields. Investment capital may flow through migrant information networks.
Or maybe not— maybe I’m wrong. But the point is, we don’t know, because too little research is done on such topics (there is some; I don’t want to say such research is nonexistent). The result is that state and local policymakers are often flying blind with regards to how policy changes actually impact specific communities.
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Follow me on Twitter. Follow my Medium Collection at In a State of Migration. I’m a grad student in International Trade and Investment Policy at the George Washington University’s Elliott School. I like to write and tweet about migration, airplanes, trade, space, and other new and interesting research.
