The Alcohol Industry Took a Big Hit in 2024

As 2024 comes to a close, we were wondering: was there any good news for the booze industry this year? In the past few weeks, we’ve seen Waterford Whisky (probably) shutting down, MGP scaling down whiskey production, Stoli U.S. filing Chapter 11, a serious weakening in the rare spirits auction market and a whole lot of doom and gloom from industry groups and CEOs. In a just-released report, The Wine & Spirits Wholesalers of America suggested U.S. spirits sales will continue to decline in the first half of next year, and the industry as a whole faces “significant headwinds.”

Oh, and tariffs are coming. Which didn’t work out so well last time.

There are plenty of culprits here — stay-at-home, Covid-era binging is over. The premiumization of spirits may have hit a peak. The legal-age Gen Z drinkers are, well, not drinking very much. Oversaturation is real; there’s literally a new brand of tequila (last year’s hot category) launched every other day. And some categories, like Cognac, are taking such a beating that a drop of 12% for U.S. sales of Rémy Martin gets labeled as “encouraging.”

This isn’t all new info; if you look at the bottom of this article, I seem to have spent most of the last 12 months writing about how spirits, beer and wine companies are all in a downward spiral (bars too — as others have pointed out, cocktail prices are getting out of control, which is hurting the on-premise market).

Oof. We need a drink. And some optimism.

Is the Rare Whisky Auction Market Flattening Out?

A new report suggests value is decreasing in fine and rare whiskies sold at auction

“It’s true the spirits industry is facing challenges,” says Distilled Spirits Council of the United States (DISCUS) President and CEO Chris Swonger. “We’ve seen closings of some distilleries — the New York Distillers Guild reported that there were 20 distilleries in New York that have closed in the past few years. Sales numbers have been relatively flat or in slight decline. But, in most of the drinks categories, spirits seem to be holding their own.”

Swonger cites several factors for current booze woes, from an industry recalibration post-pandemic to inflation challenges. But he also stresses some bright points. “I think things in the industry are beginning to normalize,” he says. “There’s an aspiration of the incoming administration to really drive economic growth and wealth and prosperity, and obviously, a lot of things have to happen for that to happen. When the American economy goes well, people like to get out and celebrate and enjoy each other.”

The DISCUS CEO admits tariffs are a looming issue (“American whiskey suffered a 25% decline in exports last time”) but says the Council is ready to work with governments here in North America and across the pond to find common ground.

As for the positive? “We’re seeing European consumers gravitating to American whiskey products,” Swonger says. “And here in the U.S., spirits-based ready-to-drink cocktails [are growing].”

The general industry consensus seems to be that the first half of 2025 is going to be rough, but better news lies ahead. And it’s not like this multi-billion industry is going away. Social media and viral trends have certainly helped increase sales of drinking mainstays like spritzes and Guinness. The non-alc and low-ABV markets are growing, although these specialty releases are still marginal players (perhaps outside of a few booze-free beer brands). Domestic wines more expensive than $50 are trending in the right direction. And tariffs aside — and that’s a pretty big aside, admittedly — other countries have shown, as Swonger suggests, a growing thirst for American spirits.

Plus, there’s also the big picture: a little more than two decades ago, there were just 60 distilleries in the United States. Now, there are more than 3,000.

“The good news is the industry is resilient,” Swonger says. “We’re excited about the future, despite some headwinds. It’s coming, but we’ll navigate that.”