American Whiskey Production Reached its Lowest Level Since 2018
There’s been a lot of news about the whiskey industry over the past year, and most of it has been, to put it politely, not very good. Sales are down, people are drinking less, and major drinks companies have paused production at distilleries, although they claim these work stoppages are only temporary. The latest news arrived today in a report from The Lexington Herald Reader, which said that bourbon production reached its lowest point since 2018 over the past year, something that might not come as a surprise to anyone who has been following the industry’s woes.
This news comes just a few months after a very similar report about whiskey production. According to U.S. Treasury data, American whiskey distilleries made 142 million proof gallons of spirits through August of this year, which is 55 million proof gallons less than what was made during the same period last year. (A proof gallon is the the measurement used by the government to monitor how much whiskey and other spirits are being made to ensure that producers are paying the proper amount of taxes.) According to the Herald Reader’s report, this marks a 28 percent decrease from 2024, and the lowest level since 2018 when about 136.5 million proof gallons were produced.
We reached out to the Distilled Spirits Council for comment, and heard back from economist Hasan Bakir about what he thinks are the main causes of this drop in production. “The continued decline in production is likely a strategic adjustment to elevated American whiskey inventories coupled with tariff concerns impacting exports and a slowing U.S. market,” he said. Indeed, it’s really hard to dispute that there is a whiskey glut at this point. At the same time that the industry is slowing production, there happens to be a record number of barrels of bourbon aging in Kentucky—more than 16 million as of January 1, 2025, according to a recent report. That is one of the reasons why major distilleries like MGP have cut back on production and reported a drop in sales. And then there’s the tariffs. Just last week, Brown-Forman, the company behind Jack Daniel’s, Woodford Reserve, and Old Forester, reported a drop in sales that was directly affected by trade disputes with Canada. As many provinces have banned the sale of American booze in retaliation for the tariffs Trump imposed on Canadian goods, with some even selling their remaining stock to raise money for charity, Brown-Forman’s spirits saw a 61 percent drop in organic sales in Canada, traditionally a major market for American whiskey.
Still, some distilleries and producers are betting on the future. In October, we reported on Buffalo Trace’s $1 billion investment into building new warehouses and a new bottling facility. And today, Lofted Spirits, the company that owns Bardstown Bourbon Company and Green River Distilling, announced that it was expanding both its Bardstown distillery and bottling line to keep up with production demands. It remains to be seen if this is a prescient move or not, but we will continue to report on this news as it develops.
