In the United States, the spirits industry faces significant challenges, leading to a wave of bankruptcies among distilleries. Factors include declining alcohol consumption, trade tensions, and changing consumer behaviors.
Bankruptcies in the Spirits Industry
This year has seen several U.S. distilleries file for bankruptcy. Notable recent filings include:
- A.M. Scott Distillery, Troy, Ohio – Filed for Chapter 11 on December 22, 2025.
- Luca Mariano Distillery, Danville, Kentucky – Filed in August 2025.
- Devils River Distillery, San Antonio, Texas – Filed in May 2025.
- JJ Pfister Distilling Co., Sacramento, California – Filed in May 2025.
- House Spirits Distillery, Portland, Oregon – Filed in April 2025.
- Boston Harbor Distillery, Boston, Massachusetts – Filed in March 2025.
- Lee Spirits Co., Monument, Colorado – Filed in March 2025.
These closures indicate a troubling trend in the industry, as consumers shift their drinking habits.
Declining Alcohol Consumption
According to a Gallup poll conducted in August 2025, only 54% of U.S. adults reported consuming alcohol. This marks a decrease from 58% in 2024 and 62% in 2023. Among drinkers, the average consumption has dropped to 2.8 drinks per week, the lowest since 1996.
Export Challenges
Further complicating matters, the spirits industry has seen a 9% decline in exports during the second quarter of 2025. The Distilled Spirits Council of the United States reported significant drops in exports to key markets:
- Exports to Canada plummeted by 85%, falling below $10 million.
- Exports to the European Union and the United Kingdom also experienced declines.
Many Canadian provinces restricted U.S. spirits due to tariffs. Although retaliatory tariffs were removed in September, the damage to U.S. exports has been significant.
The Impact of Trade Tensions
Jim Beam distillery has announced a temporary pause in operations at its main facility in Clermont, Kentucky, starting January 2026. This decision is attributed to ongoing trade issues between the U.S. and Canada. Canadian businessman Kevin O’Leary criticized the situation, labeling it a “self-inflicted mess.” He argued that political factors, rather than market forces, are affecting major bourbon producers.
Brewing Industry Challenges
The brewing sector also faces difficulties, with an increase in brewery closures surpassing new openings for two consecutive years. The Brewers Association recorded 268 new brewery openings against 434 closures.
Sales Decline Across Beverages
Data reveals that overall sales have suffered:
- Beer sales dipped 3.1% in the first half of 2025.
- Wine sales decreased by 5.9%.
- Spirits sales fell by 2.8%.
Conversely, ready-to-drink cocktails saw a slight increase in sales of 1.7%. The non-alcoholic beverage market continues to expand, with a 27% increase in 2024, reaching $829.2 million.
Changing Consumer Behavior
Experts suggest that consumers are becoming more health-conscious and budget-aware, driving them toward alternatives like mocktails. The industry must adapt by evolving product offerings to meet these shifting preferences. As priorities change, spirits makers face a crucial need for innovation and adjustment.
