The American distillery and brewery industry is facing its worst financial year in decades. In 2025 alone, multiple household names have filed for Chapter 11 bankruptcy, shaking a $9 billion Kentucky bourbon industry once thought unstoppable.
From celebrity-backed whiskey makers to historic craft breweries, the crisis is sparing no one. According to the Distilled Spirits Council of the United States (DISCUS), falling demand, rising costs, and export troubles have created a perfect storm. The cracks in the industry’s foundation are now impossible to ignore.
The Numbers Behind Whiskey’s Breaking Point
Bourbon production in Kentucky surged 475% from 1999 to 2022, while sales climbed only about 300%. By early 2025, the oversupply problem became impossible to hide.
Brown-Forman, parent of Jack Daniel’s, cut 700 jobs, 12% of its global workforce, in January, CNN Business reported. Diageo paused production at its Lebanon, Kentucky, facility until mid-2025. The Drinks Business and Louisville Business Journal note that this glut is masking an even deeper crisis, one that has less to do with storage and more to do with shrinking demand.
How America Fell in Love With Bourbon
In the early 2000s, there were fewer than 50 craft distilleries in the United States. Premium bourbon became a symbol of craftsmanship, drawing huge investment.
By 2023, U.S. whiskey sales hit $5.27 billion, according to DISCUS, creating jobs and reviving rural economies. But much of that growth was in dollars, not volume, with high-end prices driving the boom. The Whiskey Lab notes this created a market dependent on premium buyers, a customer base now shrinking faster than anyone predicted.
Three Big Problems Hit at Once
Industry analysts told OH Beverage and BBC News that three forces converged in 2025: shifting drinking habits among younger consumers, looming European Union whiskey tariffs, and massive pandemic-era overproduction.
Campari Group reported that its Wild Turkey and Russell’s Reserve brands saw an 8.1% U.S. sales drop year-over-year in early 2025. These weren’t small craft failures, big brands were taking hits too. This combination of cultural change, trade pressure, and financial strain set the stage for the bankruptcy wave.
Bankruptcies Are Spreading Coast to Coast
Since November 2024, bankruptcies have hit every corner of the alcohol sector. Kentucky’s Luca Mariano Distillery entered Chapter 11 with more than $25 million in debt.
California’s Vintage Wine Estates collapsed with $60.5 million in liabilities. Massachusetts saw Boston Harbor Distillery fold, while Memphis Made Brewing in Tennessee also filed. The Drinks Business notes the pattern is clear: the collapse is industry-wide, affecting beer, wine, and spirits. And the worst stories of 2025 are still to come.
The Ten Distilleries Shaping 2025’s Crisis
The wave of bankruptcies in 2025 has hit distilleries across the country, some backed by celebrities, others rooted in craft tradition.
Ten notable companies now face Chapter 11, each with a unique story. Some aim to restructure and survive, while others use bankruptcy to exit. Together, they reveal the real pressures squeezing the industry: overproduction, changing consumer tastes, and fragile business models struggling to keep up.
# 1 – Dave Bautista’s Devils River Distillery
Devils River Distillery, backed by Guardians of the Galaxy star Dave Bautista, filed for Chapter 11 bankruptcy in May 2025. The San Antonio whiskey maker reported liabilities between $50,001 and $100,000, with assets between $1 million and $10 million.
CEO Mike Cameron told the San Antonio Express-News that inflation and a downturn in spirits consumption hurt sales. Major creditors include law firm McDermott, Will & Emery and spirits giant Sazerac. Hollywood muscle couldn’t save this Texas whiskey, but other high-profile names soon followed.
# 2 – Dashfire
Dashfire, a Minneapolis company known for cocktail bitters, canned cocktails, and THC-infused beverages, filed for bankruptcy in April this year with up to $10 million in debt. The business launched in 2013, riding waves of both craft cocktail and cannabis drink trends.
But high lease costs and declining alcohol sales led to plans to relocate to Wisconsin for lower overhead, according to Star Tribune. Even embracing hot new markets like THC drinks isn’t enough when the entire alcohol sector is cooling.
# 3 – Boston Harbor Distillery
Rhonda Kallman, co-founder of Samuel Adams, launched Boston Harbor Distillery in Massachusetts with high hopes. But in March, the company filed for Chapter 11 bankruptcy with debts of up to $10 million, according to Boston Business Journal.
More than $1 million is owed to Cheers Investment LLC. Despite Kallman’s legendary role in America’s craft beer revolution, her move into distilling didn’t stick. The spirits market’s downturn was already claiming pioneers, and soon it would claim even those shaping entire beer scenes.
# 4 – Memphis Made Brewing
Memphis Made Brewing filed for bankruptcy in August 2025, but founders Andy Ashby and Drew Barton say this is about stepping away, not saving the business. They helped grow Memphis’ brewery scene from one to over a dozen in 12 years.
Ashby told The Commercial Appeal they plan to keep operations running during the process. This marks a shift, bankruptcy used as a planned exit. That shift is becoming more common as other once-thriving breweries face tough choices about their future.
# 5 – Montana Distillery
The Montana Distillery was voted “Best Distillery in Montana” in 2024 by Distinctly Montana Magazine. By April 2025, it had filed for bankruptcy, reporting liabilities up to $1 million but assets under $50,000.
Local officials said property taxes on their building jumped from $795,000 to $1.26 million in just one year. The owners faced a choice: relocate or close. Rising costs like these are hitting even celebrated brands, and soon much larger operations would begin facing the same squeeze.
# 6 – Westward Whiskey
Founded in 2004, Westward Whiskey helped pioneer the American single malt category and even attracted investment from Diageo’s Distill Ventures in 2018. But in April 2025, it filed for bankruptcy, citing “significant liquidity challenges” in court filings.
CEO Thomas Mooney told Portland Business Journal that post-Covid demand decline and whiskey overproduction created financial strain. Ironically, the brand had been part of securing federal recognition for its whiskey category. Yet recognition alone couldn’t shield it from the wave sweeping the industry.
#7 – Nebraska Brewing Company
Nebraska Brewing filed in April 2025 with up to $10 million in liabilities. Owners told fans on Facebook this was a restructuring move for “tough economic times,” not a closure.
Assets are listed between $100,000 and $500,000. Taproom hours and distribution remain unchanged. This transparency is becoming a trend, companies reassuring customers during financial distress to keep business flowing.
#8 – LMD Holdings (Luca Mariano)
LMD Holdings, parent company of Luca Mariano Distillery in Danville, Kentucky, filed for Chapter 11 bankruptcy in July 2025. Court filings list liabilities between $1 million and $10 million, including a “likely claim of over $25 million” from its primary creditor. The case was filed in the U.S. Bankruptcy Court for the Eastern District of Michigan, where the company is registered.
Owner Francesco Viola said the move aimed to “maximize the value of the assets for all stakeholders” and expressed confidence the company could emerge successfully with community and creditor support. The filing came just one month after the distillery’s grand opening in June 2025.
#9 – Garrard County Distilling
Garrard County Distilling in Lancaster, Kentucky, entered emergency receivership in April 2025 after defaulting on $26.2 million in loans to Truist Bank. The $250 million facility had operated for only 14 months.
Unpaid construction bills, back taxes, and halted operations led to a court-appointed receiver. Once seen as a rising star, the 50,000-square-foot distillery’s collapse underscores the whiskey sector’s financial strain.
#10 – Kentucky Owl (Stoli Group)
Kentucky Owl, owned by Stoli Group USA, filed for Chapter 11 in November 2024 amid declining spirits demand, inflation, and a major ransomware attack. The brand listed $50–100 million in liabilities, owing $5.5 million to Bardstown Bourbon Company.
The bankruptcy stalls plans for a 420-acre distillery park and adds to Stoli’s decades-long legal battle with Russia over trademark rights.
Younger Drinkers Are Changing the Game
According to Nielsen, 45% of Gen Z adults didn’t drink alcohol in 2023. Whiskey sales fell 1.8% in 2024 as many turned to seltzers, cannabis drinks, or low-alcohol options.
Producers who banked on pandemic-era growth missed the shift. Kentucky’s 475% production surge from 1999 to 2022 became a liability when younger drinkers began consuming less. The gap between production and demand is widening fast.
Tariffs Are Cutting Off Key Markets
Canada retaliated against U.S. tariffs by removing American whiskey from Ontario shelves, costing Michter’s $115,000 in orders, the Louisville Courier Journal reported.
The EU may impose a 50% tariff, adding to $500 million in export losses since 2018. Small distilleries without deep pockets can’t survive both declining U.S. sales and shrinking global access.
Bankrupt but Still Pouring Drinks
More distilleries are staying open during bankruptcy. Devils River hosts visitors, Memphis Made keeps taproom hours, and Nebraska Brewing assures grocery store presence.
This “bankruptcy tourism” keeps cash flowing during restructuring. Customers may be sipping at technically insolvent businesses, a sign of how survival strategies are changing.
Who Will Rise From the Ashes?
Chapter 11 doesn’t always mean the end. Memphis Made’s founders are seeking a buyer. Nebraska Brewing is reorganizing with customer support. Devils River is still selling whiskey.
The survivors will be those that adapt, changing their products, cutting costs, and appealing to younger, less frequent drinkers. As DISCUS and IWSR both note, 2025’s bankruptcies are a reckoning. Only the brands willing to evolve their business models will be around for whiskey’s next boom cycle.