How Kentucky bourbon went from boom to bust

August 10, 2025

Kentucky bourbon, officially recognized as a "distinctive product of the United States" in 1964, experienced a remarkable renaissance following the 2008 recession due to its attractive price point, changes in collecting laws, and mid-century nostalgia. Sales grew by 7% worldwide between 2011-2020, creating both a drinking and investment market. However, this bourbon bubble has recently deflated due to pandemic lockdowns, inflation, changing drinking habits among younger generations, and international trade conflicts, with sales growth slowing to just 2% between 2021-2024.

Who is affected

Kentucky bourbon distilleries and manufacturers, including LMD Holdings, Garrard County Distilling, and barrel-making plants
Large liquor companies like Brown-Forman (producer of Jack Daniels, Woodford Reserve, and Old Forester), Diageo (owner of Bulleit), and Campari (owner of Wild Turkey)
Canadian provinces that have stopped importing American alcoholic beverages
Bar managers and consumers facing changing market conditions
Kentucky's economy, which relies on the $9 billion whiskey and bourbon business
Local businesses and consumers in Kentucky facing potential price increases

What action is being taken

Canadian provinces are stopping imports of American alcoholic beverages in retaliation to tariffs
The EU has announced retaliatory tariffs against US goods, including Kentucky bourbon, though implementation has been delayed
Canadian distilleries are experimenting with bourbon-making methods to create similar products locally
Bourbon companies are managing an oversupply of product that was predicted years ago
Some distilleries are filing for bankruptcy or going into receivership due to economic pressures

Why it matters

Kentucky's $9 billion whiskey and bourbon industry is at risk, with Canada alone accounting for 10% of this business
The bourbon industry, once booming, is experiencing a significant slowdown that affects employment and economic growth in Kentucky
Bankruptcies and consolidation in the industry represent a reversal of the previous growth trend
The situation illustrates the direct impact of international trade policies on specific American industries
The bourbon market's trajectory demonstrates how drinking trends, economic factors, and international politics can converge to affect a culturally significant American product

What's next

No explicit next steps stated in the article

Read full article from source: BBC