Kentucky’s bourbon industry is worth $9 billion annually. However, it is facing unprecedented turmoil.
Three major distilleries filed for bankruptcy within eight months, affecting the industry and thousands of jobs in America’s whiskey heartland. The industry supports over 23,000 Kentucky workers and has an annual payroll of $1.6 billion.
Mounting Pressure
Beyond bankruptcies, established whiskey giants are purging workforces. According to Fortune, Brown-Forman cut 700 jobs in January.
Green River Distilling eliminated 26 positions—25% of its workforce—reported The Spirits Business. Diageo paused production at its Lebanon facility through June 2025, affecting additional workers statewide.
Boom Origins
Kentucky’s bourbon boom started in the 2000s when demand exceeded supply for the first time in decades.
This boom led to production skyrocketing, with distilleries filling hundreds of thousands of barrels yearly to over 3.2 million in 2023. New distilleries proliferated as investors poured billions into expansion projects across the Commonwealth. However, after 2023, the industry has been on a decline.
Perfect Storm
Multiple factors are crushing distilleries simultaneously. According to the Washington Times, American whiskey sales declined 1.8% in 2024 to $5.2 billion.
Rising inflation increased production costs while younger consumers shifted toward canned cocktails and non-alcoholic alternatives. International tariff threats further squeezed export markets.
Three Fall
Garrard County Distilling, Kentucky Owl’s parent Stoli Group, and Luca Mariano Distillery filed for bankruptcy between November 2024 and July 2025.
Garrard County’s $250 million facility entered receivership in April owing $26 million. Kentucky Owl filed for Chapter 11, with $5.5 million in debts to Bardstown Bourbon. Luca Mariano declared bankruptcy with $34.5 million in debts.
Local Devastation
Lancaster Mayor Michael Gaffney confirmed that Garrard County Distilling’s 60 workers were suspended indefinitely, reported LEX18.
When it opened, the facility represented the largest new independent distillery in Kentucky. Local Chamber Director Diane Bisher told WEKU that affected employees “don’t know anything” about a potential reopening.
Human Cost
Workers have shared their stories. Before his furlough, former Garrard County maintenance worker Brad Luttrell called it “by far the best place I’d ever worked.”
“There are a lot of us that still want to be called back, still holding on to a lot of hope,” Luttrell told LEX18. Many affected workers have since found new employment elsewhere.
Industry Contraction
Operations are being retrenched among many major producers. Diageo shuttered bottling at Louisville’s Stitzel-Weller, which had consequences for 33 employees, according to WDRB.
The company will consolidate operations at other facilities within three years. Irish Distillers paused production at its Midleton facility for five months—unusually long for maintenance.
Market Reality
For the first time in 20 years, bourbon sales declined. The sales dropped consecutively in 2023 and 2024.
“The bourbon business is not collapsing, but the so-called ‘bourbon boom’ has slowed down considerably,” wrote industry authority Chuck Cowdery on his blog. The industry faces serious challenges with the market correction underway.
Hidden Costs
The crisis extends beyond direct job losses to ripple effects throughout Kentucky’s economy.
Bourbon tourism generates substantial money for local economies. In 2024, there were around 2.5 million visitor experiences, supporting thousands of indirect jobs in hospitality and retail.
Supply chain disruptions affect cooperages, trucking companies, and grain farmers who sold 21 million bushels to distilleries.
Worker Anxiety
“Any time you lose 30 or 40 employees, it does affect the trickle down effect,” Owensboro Mayor Tom Watson told 44News regarding Green River layoffs.
Workers face uncertainty about pension benefits and healthcare coverage. Many distillery employees possess specialized skills that don’t translate well into other job opportunities.
Ownership Changes
Private equity and corporate ownership contributed to instability. Garrard County’s Atlanta-based parent, Staghorn, invested $250 million but couldn’t service debts.
Stoli Group’s financial troubles stemmed from a cyberattack and parent company issues. Traditional family-owned distilleries like Brown-Forman are cutting costs to survive.
Recovery Attempts
Some distilleries are pursuing reorganization under Chapter 11 bankruptcy protection. “This filing is an opportunity to reinvent ourselves as a company,” Westward Whiskey CEO Thomas Mooney told Whisky Advocate about his company’s bankruptcy filing.
Asset sales and restructuring may preserve some operations and keep workers employed.
Expert Skepticism
Industry observers remain cautious about proposed recovery prospects, implying that the bourbon boom had to eventually end.
The Wall Street Journal declared, “America’s Bourbon Boom Is Over. Now the Hangover Is Here.” At the same time, Breaking Bourbon noted the “bourbon boom hit a brick wall” as speculative buyers retreat and prices normalize across categories.
Uncertain Future
Kentucky’s signature industry faces an uncertain future as it weathers this storm. With 14.3 million barrels aging statewide—more than two per resident—the Commonwealth has massive inventory but uncertain demand.
The answer may determine whether bourbon’s golden age becomes a cautionary tale of boom and bust.