As American as apple pie, Kentucky bourbon was booming after the last Great Recession ended. But as the economy has waned post-Pandemic - and with multiple trade wars on the horizon - the market may be drying up.
Although the whiskey, which is traditionally made with corn and aged in charred oak barrels, has roots going all the way back to the 18th Century, it wasn’t until 1964 that it became an iconic piece of Americana, when Congress passed a law declaring it a “distinctive product of the United States”.
But drinking trends come and go, and by the end of the 20th Century, bourbon was considered a bit old fashioned - pun intended.
“You often see these kind of generational shifts where people don’t want to drink what their parents drink,” said Marten Lodewijks, the US president of IWSR, which collects alcoholic beverage data and provides industry analysis.
Then, as the world recovered from the 2008 recession, drinkers seemed to rediscover this classic spirit, for a few different reasons.
For starters, the price point was good, which made it attractive for bar managers to purchase and incorporate into cocktails and for younger drinkers to sample. Then, in 2013, a law was passed in Kentucky that made it easier for companies to purchase and resell vintage bottles, opening up a high-end collectible market. Add to that the rise in mid-century nostalgia fuelled by shows like Mad Men, and bourbon was due for a full-blown Renaissance.
Sales of bourbon grew by 7% worldwide between 2011-2020, which is more than three times the growth of the decade prior, according to industry data company ISWR.
Soon, some bourbon distillers were becoming quasi-celebrities, and people were starting to buy up bourbon bottles not to drink, but as an investment.
“Everyone was going crazy over the bourbon market, and treating like a commodity, like a stock,” recalls Robin Wynne, a general manager and beverage director for Little Sister in Toronto, Canada, who has been a bar manager for about 25 years.
“People would go in as a prospector, to flip bottles for two to three times the value.”
But like most market bubbles, this one was bound to burst. The pandemic’s lockdowns tanked bar sales, and inflation has made many would-be bourbon drinkers choose less expensive options - or forgo drinking all together. Amongst Gen-Z, many 20-somethings are drinking less than their older siblings and parents did at their age.
Those factors have contributed to declining alcohol sales, with bourbon sales specifically slowing down to just 2% between 2021-2024, according to ISWR data.
President Donald Trump’s global tariffs have been the final straw. The EU has announced retaliatory tariffs against US goods, including Kentucky bourbon and Californian wine, although implementation has been delayed for six months.
Meanwhile, most provinces in Canada have stopped importing American alcoholic beverages in retaliation. The country accounts for about 10% of Kentucky’s $9bn (£6.7bn) whiskey and bourbon business.
“That’s worse than a tariff, because it’s literally taking your sales away, completely removing our products from the shelves … that’s a very disproportionate response,” Lawson Whiting, the CEO of Brown-Forman, which produces Jack Daniels, Woodford Reserve and Old Forester, said back in March when Canadian provinces announced their plan to stop buying US booze.
Trump has said that tariffs will boost made-in-American businesses.
But Republican Senator Rand Paul, who represents Kentucky, said the tariffs will hurt local businesses and consumers in his home state.
“Well, tariffs are taxes, and when you put a tax on a business, it’s always passed through as a cost. So, there will be higher prices,” he told ABC’s “This Week” in May.
people were starting to buy up bourbon bottles not to drink, but as an investment.
“Everyone was going crazy over the bourbon market, and treating like a commodity, like a stock,” recalls Robin Wynne, a general manager and beverage director for Little Sister in Toronto, Canada, who has been a bar manager for about 25 years.
“People would go in as a prospector, to flip bottles for two to three times the value.”
I know one of these guys! He let me try a “rare” and “antique” whiskey that he bought a fraction of a bottle for ~$2500. It was a 1950s bottle of some mass produced whiskey of the era and that’s exactly what it tasted like. Whiskey. There was no more depth to it than Jim beam. It was just old.
I mean there could theoretically be manufacturing differences. If newer techniques replaced older techniques and in the process something was changed, flavor could be changed. A great example of this is pot still whiskey versus column still whiskey. They taste different because the physical properties of the stills are different which will have different degrees of rectification. Hell, the distillers of the 50s could have different palates than modern distillers and take different cuts. Or the yeast was changed which is a huge part of the flavor.
I don’t mind genuine whiskey conneseirs. It’s the speculators who don’t give a shit what it tastes like and just want to make a buck that annoys me.
Correct. Whiskey doesn’t age once it’s out of the barrel, which is part of why it became a staple beverage across the world. Wine does age in the bottle and people are trying to add that prestige to whiskey.
What makes whiskey valuable is how long it was aged before it was bottled. Some distilleries have 100 year-old cycles. But a 50 year Macallen bottled in 1983 is going to taste the same as 50 year Macallan bottled in 2025. The consistent taste is one of the benefits of distilling old whiskey.
Whiskey, and in fact all spirits, only age while in casks. Once they’re bottled they stop aging and stay as they were when bottled. With extremely old spirits you’ll maybe see some sediment fall out of solution and whatever slow reactions happen with the residual tannins, maybe some photochemical stuff if left in the sun.
Price in older spirits comes from two places:
It’s expensive to store aging spirits in their barrels because warehouses cost money to run and the spirit is going to squat there for years and years and years before use
The longer a spirit ages the more evaporates. There’s a lot less material available for a 20-year than a 5-year despite taking up just as much space to age.
Any additional dollars come from moneyed assholes wanting to flex on each other by having famous rare vintages on their shelves
It’s sort of in the nature of business/capitalism. Any time someone makes a lot of money in something, other people pile in, unless there are significant barriers to entry
These economic pressures have created a growing list of casualties.
Liquor giant Diageo, reported that sales of Bulleit, a Kentucky distillery that makes bourbon, rye and whiskey, where down 7.3% this fiscal year.
Wild Turkey - a Kentucky bourbon owned by Campari - sales were down 8.1% over the past six months.
While big, international brands will likely be able to weather the storm, the sales hit has led to a growing list of casualties.
In July, LMD Holdings filed for Chapter 11 bankruptcy - just one month after opening the Luca Mariano Distillery in Danville, Kentucky.
This spring, Garrard County Distilling went into receivership.
And in January, Jack Daniel’s parent company closed a barrel-making plant in Kentucky.
The bottom of the barrel has not yet been reached, warned Mr Lodewijks.
“I’d be extraordinarily surprised if there weren’t more bankruptcies and more consolidation,” he said.
In part, bourbon has become a victim of its own success - the rise in bourbon sales, and the growth of the premium market, helped fuel many small distilleries. Because bourbon must age in barrels for years, what’s on the market today was predicted a few years ago, which means that there is currently an oversupply, which is driving down prices.
But while these economic conditions are harsh, Mr Lodewijks said that history has shown how tough times can create innovation. Scotch whisky used to be fairly simple, a blend of middle-of-the road tipples. But when sales declined in the second part of the 20th centuries, distillers started aging their excess bottles, which helped create the market we have now for premium, aged Scotch whisky.
In Canada, where bourbon imports have slowed to a trickle, local distilleries have started experimenting with bourbon-making methods to give Canadian whiskey a similar taste.
“The tariff war has really done a positive for the Canadian spirits business,” noted Mr Wynne.
“We’ve got lots of grains to make these whiskeys without having to rely on the States.”
most provinces in Canada have stopped importing American alcoholic beverages in retaliation. The country accounts for about 10% of Kentucky’s $9bn (£6.7bn) whiskey and bourbon business.
Liquor giant Diageo, reported that sales of Bulleit, a Kentucky distillery that makes bourbon, rye and whiskey, where down 7.3% this fiscal year.
The last line of the article is most telling imo, Canadian producers are figuring out how to home brew bourbon. These changes are going to be structural and permanent. Why import what you can do yourself?
The story repeats itself across many if not all sectors. The intent of the tariffs is to reduce US reliance on foreign imports. Instead it’s making foreign importers less reliant on the US
This really does feel like a point of no return. Structural self-imposed contraction in the West and BRICS is thriving, settling trades in local currency
Maybe it’s because I did so many American honey shooters back in my drinking days, but it’s wild to see Wild Turkey losing profits. Feel like I probably made up at least 1 percent of those sales personally lol
But like most market bubbles, this one was bound to burst. The pandemic’s lockdowns tanked bar sales, and inflation has made many would-be bourbon drinkers choose less expensive options - or forgo drinking all together. Amongst Gen-Z, many 20-somethings are drinking less than their older siblings and parents did at their age.
It’s worth noting that drinking, drug use, nicotine use, and teenage pregnancy has gone down between each generation. Gen Z is drinking less than Millennials, who drank less than Gen X, who drank less than Boomers, who drank less than the Silent Generation, who drank less than the Great Generation (before that gets a little fucky due to Prohibition). This is correlated with better education and higher living standards.
Of course, the economy is changing as inflation eats into bread and circuses. I’m just pointing out it’s silly for these companies to expect anything different from what we’ve seen over the last 100 years. People don’t want to live like Don Draper where they’re drinking constantly throughout the day. Employers especially don’t want to go back to that type of office culture.
As American as apple pie, Kentucky bourbon was booming after the last Great Recession ended. But as the economy has waned post-Pandemic - and with multiple trade wars on the horizon - the market may be drying up.
Although the whiskey, which is traditionally made with corn and aged in charred oak barrels, has roots going all the way back to the 18th Century, it wasn’t until 1964 that it became an iconic piece of Americana, when Congress passed a law declaring it a “distinctive product of the United States”.
But drinking trends come and go, and by the end of the 20th Century, bourbon was considered a bit old fashioned - pun intended.
“You often see these kind of generational shifts where people don’t want to drink what their parents drink,” said Marten Lodewijks, the US president of IWSR, which collects alcoholic beverage data and provides industry analysis.
Then, as the world recovered from the 2008 recession, drinkers seemed to rediscover this classic spirit, for a few different reasons.
For starters, the price point was good, which made it attractive for bar managers to purchase and incorporate into cocktails and for younger drinkers to sample. Then, in 2013, a law was passed in Kentucky that made it easier for companies to purchase and resell vintage bottles, opening up a high-end collectible market. Add to that the rise in mid-century nostalgia fuelled by shows like Mad Men, and bourbon was due for a full-blown Renaissance.
Sales of bourbon grew by 7% worldwide between 2011-2020, which is more than three times the growth of the decade prior, according to industry data company ISWR.
Soon, some bourbon distillers were becoming quasi-celebrities, and people were starting to buy up bourbon bottles not to drink, but as an investment.
“Everyone was going crazy over the bourbon market, and treating like a commodity, like a stock,” recalls Robin Wynne, a general manager and beverage director for Little Sister in Toronto, Canada, who has been a bar manager for about 25 years.
“People would go in as a prospector, to flip bottles for two to three times the value.”
But like most market bubbles, this one was bound to burst. The pandemic’s lockdowns tanked bar sales, and inflation has made many would-be bourbon drinkers choose less expensive options - or forgo drinking all together. Amongst Gen-Z, many 20-somethings are drinking less than their older siblings and parents did at their age.
Those factors have contributed to declining alcohol sales, with bourbon sales specifically slowing down to just 2% between 2021-2024, according to ISWR data.
President Donald Trump’s global tariffs have been the final straw. The EU has announced retaliatory tariffs against US goods, including Kentucky bourbon and Californian wine, although implementation has been delayed for six months.
Meanwhile, most provinces in Canada have stopped importing American alcoholic beverages in retaliation. The country accounts for about 10% of Kentucky’s $9bn (£6.7bn) whiskey and bourbon business.
“That’s worse than a tariff, because it’s literally taking your sales away, completely removing our products from the shelves … that’s a very disproportionate response,” Lawson Whiting, the CEO of Brown-Forman, which produces Jack Daniels, Woodford Reserve and Old Forester, said back in March when Canadian provinces announced their plan to stop buying US booze.
Trump has said that tariffs will boost made-in-American businesses.
But Republican Senator Rand Paul, who represents Kentucky, said the tariffs will hurt local businesses and consumers in his home state.
“Well, tariffs are taxes, and when you put a tax on a business, it’s always passed through as a cost. So, there will be higher prices,” he told ABC’s “This Week” in May.
die
I know one of these guys! He let me try a “rare” and “antique” whiskey that he bought a fraction of a bottle for ~$2500. It was a 1950s bottle of some mass produced whiskey of the era and that’s exactly what it tasted like. Whiskey. There was no more depth to it than Jim beam. It was just old.
im pretty sure the only value in older whiskeys comes from longer aging in the barrel and once you bottle it that stops really changing so lol
I mean there could theoretically be manufacturing differences. If newer techniques replaced older techniques and in the process something was changed, flavor could be changed. A great example of this is pot still whiskey versus column still whiskey. They taste different because the physical properties of the stills are different which will have different degrees of rectification. Hell, the distillers of the 50s could have different palates than modern distillers and take different cuts. Or the yeast was changed which is a huge part of the flavor.
I don’t mind genuine whiskey conneseirs. It’s the speculators who don’t give a shit what it tastes like and just want to make a buck that annoys me.
Correct. Whiskey doesn’t age once it’s out of the barrel, which is part of why it became a staple beverage across the world. Wine does age in the bottle and people are trying to add that prestige to whiskey.
What makes whiskey valuable is how long it was aged before it was bottled. Some distilleries have 100 year-old cycles. But a 50 year Macallen bottled in 1983 is going to taste the same as 50 year Macallan bottled in 2025. The consistent taste is one of the benefits of distilling old whiskey.
Whiskey, and in fact all spirits, only age while in casks. Once they’re bottled they stop aging and stay as they were when bottled. With extremely old spirits you’ll maybe see some sediment fall out of solution and whatever slow reactions happen with the residual tannins, maybe some photochemical stuff if left in the sun.
Price in older spirits comes from two places:
Any additional dollars come from moneyed assholes wanting to flex on each other by having famous rare vintages on their shelves
A deeply ridiculous “economic system”
Anyone know why there’s so many bubbles? Someone must have written a book about it or something.
I know it’s not capitalism’s fault, though, because it’s the best and only economic system.
It’s sort of in the nature of business/capitalism. Any time someone makes a lot of money in something, other people pile in, unless there are significant barriers to entry
These economic pressures have created a growing list of casualties.
Liquor giant Diageo, reported that sales of Bulleit, a Kentucky distillery that makes bourbon, rye and whiskey, where down 7.3% this fiscal year.
Wild Turkey - a Kentucky bourbon owned by Campari - sales were down 8.1% over the past six months.
While big, international brands will likely be able to weather the storm, the sales hit has led to a growing list of casualties.
In July, LMD Holdings filed for Chapter 11 bankruptcy - just one month after opening the Luca Mariano Distillery in Danville, Kentucky.
This spring, Garrard County Distilling went into receivership.
And in January, Jack Daniel’s parent company closed a barrel-making plant in Kentucky.
The bottom of the barrel has not yet been reached, warned Mr Lodewijks.
“I’d be extraordinarily surprised if there weren’t more bankruptcies and more consolidation,” he said.
In part, bourbon has become a victim of its own success - the rise in bourbon sales, and the growth of the premium market, helped fuel many small distilleries. Because bourbon must age in barrels for years, what’s on the market today was predicted a few years ago, which means that there is currently an oversupply, which is driving down prices.
But while these economic conditions are harsh, Mr Lodewijks said that history has shown how tough times can create innovation. Scotch whisky used to be fairly simple, a blend of middle-of-the road tipples. But when sales declined in the second part of the 20th centuries, distillers started aging their excess bottles, which helped create the market we have now for premium, aged Scotch whisky.
In Canada, where bourbon imports have slowed to a trickle, local distilleries have started experimenting with bourbon-making methods to give Canadian whiskey a similar taste.
“The tariff war has really done a positive for the Canadian spirits business,” noted Mr Wynne.
“We’ve got lots of grains to make these whiskeys without having to rely on the States.”
An incredible self-own
The last line of the article is most telling imo, Canadian producers are figuring out how to home brew bourbon. These changes are going to be structural and permanent. Why import what you can do yourself?
The story repeats itself across many if not all sectors. The intent of the tariffs is to reduce US reliance on foreign imports. Instead it’s making foreign importers less reliant on the US
I love to watch the empire crumble. I hate to be in it tho
This really does feel like a point of no return. Structural self-imposed contraction in the West and BRICS is thriving, settling trades in local currency
There’s just no way the US goes quietly
Maybe it’s because I did so many American honey shooters back in my drinking days, but it’s wild to see Wild Turkey losing profits. Feel like I probably made up at least 1 percent of those sales personally lol
The kickin chicken is a favorite for sure
Also about as downmarket as it gets
It’s worth noting that drinking, drug use, nicotine use, and teenage pregnancy has gone down between each generation. Gen Z is drinking less than Millennials, who drank less than Gen X, who drank less than Boomers, who drank less than the Silent Generation, who drank less than the Great Generation (before that gets a little fucky due to Prohibition). This is correlated with better education and higher living standards.
Of course, the economy is changing as inflation eats into bread and circuses. I’m just pointing out it’s silly for these companies to expect anything different from what we’ve seen over the last 100 years. People don’t want to live like Don Draper where they’re drinking constantly throughout the day. Employers especially don’t want to go back to that type of office culture.