Is American whiskey going underneath, or just correcting itself after twenty years of development? We spoke to trade consultants to evaluate the scenario.
Up to now yr, a string of headlines has rattled Kentucky and past: Uncle Nearest in receivership; Kentucky Owl submitting for chapter; Garrard County Distilling in court docket; Limestone Farms Distillery dealing with multi-million-dollar liens; and even Brown-Forman closing its Louisville cooperage. Most lately, Impartial Stave Firm introduced main job cuts at its Kentucky Cooperage in Lebanon. For an trade that spent twenty years in near-continuous development, the optics are alarming.
Behind the drama, nevertheless, folks within the trade warning towards panic. “I don’t see it as a bust,” says trade veteran Steve Beal. “I see it as a realignment.”
Beal, who has watched a number of cycles come and go, factors to an “ocean of Bourbon” laid down through the growth years, fuelled by cash and investor optimism. The warehouses could also be full, however that doesn’t imply drinkers have deserted American whiskey.
As an alternative, the market seems more and more break up. “It’s an attention-grabbing form of bifurcation,” says Adam Edmonsond, a Grasp of Whiskey, and director of schooling on the Council of Whiskey Masters. “Entry-level merchandise are struggling a decline similtaneously premium merchandise are nonetheless rising.”
That divide, backed by IWSR information displaying US whiskey’s world quantity development flatlining to 2029 whereas worth ekes out small good points, will be the clearest sign but that the celebration has ended — however the hangover is just not common.
Leaps and bounds
To know the present anxiousness, it helps to recollect how far American whiskey has come. Simply twenty years in the past, immediately’s icons had been gathering mud. “I used to be shopping for Pappy by the case, at value,” recollects Monique Huston, vice-president of Winebow’s spirits portfolio. “There was no Bourbon Path, no romance. These had been industrial crops.”
From that low base, Bourbon and rye rode a wave of cultural rediscovery. Cocktail tradition offered an entry level, finishes and restricted version releases created pleasure, and auctions turned once-ignored manufacturers into objects of need. Huston says throughout Covid-19 “the ‘cool dads within the cul-de-sac’ received into whiskey, and collectability exploded”.
The growth inspired outsized bets. In latest many years, Beal recollects warehouses sprouting up at unprecedented velocity: “Manufacturing greater than quadrupled. Everybody thought development would go on perpetually.”
Figures from the Kentucky Distillers’ Affiliation assist this — Bourbon manufacturing skyrocketed by 475% between 1999 and 2022, with 14.3 million barrels ageing by 2023.
Beneath these numbers sat a robust shift in client psychology. “If somebody purchased you Pappy 23 at US$500, you needed to say it was nice,” Huston remembers. Value grew to become a proxy for high quality, and shortage created its personal mythology.
The secondary market amplified the impact. Baller Whiskey from California’s St George Spirits started as a unusual one-barrel undertaking for a ramen store however rapidly appeared on cabinets for US$400 a bottle. “False premiumisation is poisonous,” says grasp distiller Lance Winters. St George responded by scaling manufacturing and chopping RRP to US$50 — a uncommon act of defiance towards collectability tradition. As Winters places it: “We don’t make whiskey to gather. We make it to drink.”
That psychology is now colliding with harder economics. Larger rates of interest make debt-funded enlargement riskier, and small declines in gross sales can tip bold tasks into disaster. “Over-optimistic, debt-funded expansions at the moment are unsustainable with greater charges,” says Edmonsond. “Even a modest dip can blow up the operation.”
The outcomes are seen: Garrard County Distilling was compelled into receivership after a US$250m construct, Luca Mariano Distillery went bankrupt inside a yr of opening, and Limestone Farms Distillery was mired in lawsuits and liens earlier than a drop was distilled. These tales matter much less for the person names than for what they reveal: a wave of distilleries funded extra by monetary engineering than by client loyalty.
Even the provision chain is bending. In April 2025, Brown-Forman shuttered its Louisville cooperage. In August, Impartial Stave Co confirmed greater than 100 layoffs at Kentucky Cooperage, consolidating operations to at least one shift. Beal additionally mentions warehouse tasks which have stalled mid-construction. “You’ll be able to see the slowdown in wooden and concrete as a lot as in whiskey,” he says.
Indicators of pressure
For distributors, the indicators of pressure are clear. “Too many small manufacturers tried to scale [to a] nationwide [level] too rapidly,” says Huston. “They wished to be in New York, LA, Chicago, Miami — however they hadn’t even secured loyalty at residence. Should you’re not the highest artisanal model in your house state, you’re lacking the plain.”
Edmonsond agrees shelf house is a brutal choke level: “The large conventional producers will climate storms. For smaller entrants, it’s not getting liquid into bottle that issues — it’s getting it on the shelf.”
This middle-tier strain usually decides survival. Huston frames Winebow as “the most important of the small, the smallest of the massive” — consultative promoting, storytelling, not simply shifting circumstances. “We see educated customers pushing again on inflated packaging and worth. That resistance is the place the correction is going on,” she provides.
If over-production is one a part of the puzzle, over-pricing is one other. “Whiskey grew to become overpriced due to its attractive, collectible, funding aura,” says Beal. Bottles had been priced excessive “simply because they might be”, creating an unstable bubble.
Winters argues whiskey’s fetishisation has achieved long-term hurt. As Dave Smith, head blender and distiller at St George Spirits, says: “Whiskey tradition grew to become like comics — obsessive, however the novelty burned out. Barrel finishes and single-barrel picks had been thrilling, however now it’s simply extra noise.” Huston provides: “It’s not buying and selling down, it’s a pricing correction. Customers are smarter now. They don’t settle for US$40 liquid dressed up as US$70 with a heavy bottle and gold foil.”
Generational shifts deepen the problem. Gallup information reveals the proportion of Individuals underneath 35 who drink has fallen from 72% to 62% in twenty years.
“After Covid, there are merely fewer social events,” says Edmonsond. “Some customers shifted to hashish, RTDs [ready-to-drink], or NA [no alcohol]. However we’re additionally seeing a barbell market – folks purchase much less, however higher.”
Huston insists youthful drinkers aren’t misplaced however are discovering alcohol otherwise. “Their discovery occurs on TikTok, not within the commerce press. They don’t care if a model is Diageo-owned or unbiased. They care if it seems enjoyable.” The romance of neat pours in crystal Glencairn glasses, she provides, is fading; whiskey is changing into extra about socialising, not ceremony. That change is cultural in addition to generational. St George’s Smith notes: “The tradition of whiskey geekdom has worn itself out. Folks cycle by means of classes. They might transfer on to agave or craft cocktails, however whiskey must hold providing real causes to come back again.”
Agave’s rise is especially stark. Huston factors out that Tequila and mezcal are taking over shelf house that after belonged to whiskey. Retailers who as soon as begged for Bourbon allocations at the moment are chasing the most recent agave releases. This fatigue doesn’t imply whiskey is out of date, however it does pressure producers to rethink innovation. “A variety of what’s been provided lately is the emperor’s new garments,” says Winters. “If the whiskey doesn’t have a motive to exist, it received’t final.”
Then there may be American single malt. For years, advocates have promoted this subcategory as the subsequent development engine. Its official recognition by the TTB (Alcohol and Tobacco Tax and Commerce Bureau) in 2024 was hailed as a milestone. However opinions are combined on its actual potential. “High quality is now on par, and it’s much less capital-intensive than Bourbon,” says Beal. Edmonsond is optimistic: “Guardrails are good. Large firm validation — like Diageo’s acquisition of Balcones — will create halo results.”
Confused customers
Nevertheless, not everybody agrees. “It hasn’t modified something for us,” says St George’s Winters, who has been laying down single malt for practically 30 years. “The worry is that the principles may stifle experimentation.”
Huston is blunter nonetheless: “It doesn’t transfer the needle sales-wise. Customers anticipate ‘American Scotch’ and are confused. Bourbon and Scotch drinkers don’t convert simply.”
IWSR information confirms the ambivalence: the American single malt subcategory grew by 5% in quantity between 2019 and 2024, however is forecast to stay flat by means of to 2029.
Worldwide markets add one other layer of complexity. IWSR figures present the highest 5 export markets for American whiskey by quantity are Germany, the UK, Japan, Australia and Poland; by worth they’re the UK, Australia, Germany, Poland and Brazil.
Edmonsond notes tariffs stay a wildcard. “India has made incremental strikes, and that market is thrilling,” he says. “However in Canada, even when rules ease, there’s a lingering patriotic sentiment towards American merchandise. These items suppress demand,” he provides, reflecting on Canadian retailer boycotts of American liquor in retaliation towards US president Donald Trump’s tariff threats.
Beal sees echoes of the Scotch trade’s struggles with tariffs throughout Trump’s commerce wars. “Politics can put a brake on momentum in a single day,” he warns.
Regardless of the turbulence, nobody sees the class collapsing. “The center is thrashing strongly,” insists Beal. “There might be closures, however this isn’t a wipe-out.” Edmonsond believes the most important producers will climate the storm most simply, with shelf house and repeat purchases appearing as choke factors for smaller entrants.
In the meantime, Winters sees resilience in independence. “We have now no enterprise capital, no growth-at-all-costs buyers. Make compelling merchandise, have affordable expectations for development, and also you’ll survive.”
All agree the subsequent section would require extra self-discipline and fewer hype. For Edmonsond, which means a “renaissance in mixing”, as extra liquid is repurposed into premium SKUs and customers develop extra appreciation for the blender’s artwork. He additionally sees scope for differentiation in grains, fermentation instances, high-quality casks, and better ABVs. Beal’s prescription is easy: deal with high quality. Huston predicts the subsequent massive pattern might be affordability, whereas Winters places it bluntly: “Make whiskey to be drunk, not collected.”
The growth could also be over, however American whiskey is just not lifeless. The trade is rebalancing, shaking out extra, and studying laborious classes about debt, pricing and authenticity. For these with the persistence to play the lengthy recreation, the longer term stays vast open.
American whiskey information from IWSR
- 2019–24 world CAGR (quantity): US whiskey +2%; Bourbon +3%; rye +5%; single malt +5% (<1% of complete).
- 2019–24 world CAGR (worth): US whiskey +5%; Bourbon +6%; rye +9%; single malt +8%.
- 2024–29 forecast (quantity): flat general (0%); Bourbon +1%; rye +1%; single malt 0%.
- 2024–29 forecast (worth): +1% general; Bourbon +2%; rye +1%; single malt +1%.
- Value tiers (2024 quantity share): premium 42%; normal 36%; worth 9%; super-premium and ultra-premium grew quickest 2019–24.
- High export markets (2024) by quantity: Germany, UK, Japan, Australia, Poland. By worth: UK, Australia, Germany, Poland, Brazil.
Because the trade faces a drop in demand, what methods are you utilizing to safeguard development and stability?
Ryan McFarland – chief industrial and technique officer, Drinksology Kirker Greer
“We’re specializing in constructing long-term resilience by means of differentiation, model storytelling, and world market growth. Whereas home demand for American whiskey has eased, we see pockets of momentum in worldwide markets for manufacturers with distinctive kinds and heritage. With Bowsaw American Whiskey, we’re highlighting expressions that showcase our coopers and blenders, serving to the model stand out in a crowded class and resonate with customers looking for authenticity and character. Funding in schooling and advocacy can be key. Alongside this, we’re managing distribution offers to assist sustainable development fairly than overexposure. By strengthening model id, diversifying our attain and staying attentive to shifting client preferences, we’re assured in safeguarding stability for the years forward.”
David Valentine – head distiller, Outdated Dominick Distillery
“A number of the giant corporations within the trade are dealing with demand challenges. We’re seeing demand develop, significantly in our property whiskies. Our technique is to make quite a lot of high-quality merchandise that may every stand on their very own. Proper now, Tennessee whiskey, Bourbon, and wheat whiskey are all rising merchandise for us.”
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