Craft Whiskey Distillers Navigate The Headwinds
April 25, 2025Craft whiskey has been among the most dynamic segments in the spirits industry over the long term, but these days small-scale whiskey makers are struggling. Small distillers are seeing declining sales, rising operating costs, and increased difficulties in accessing new markets and customers.
“It’s a much tougher market for craft spirits now than it has been over the past five years,” says Kings County Distillery president Colin Spoelman. The Brooklyn, New York producer makes three Bourbons in its flagship range, as well as specialty labels ranging from flavored whiskeys and moonshine to limited-release ryes and higher-abv Bourbons. Spoelman notes there’s a sense of saturation in the whiskey space now. That, coupled with roadblocks to retail and increasing financial constraints, creates a cloudy outlook for the near future.
Spoelman says Kings County’s sales have been roughly the same for 2022, 2023, and 2024. “We’ll see a little growth by dollars, and maybe 15% growth by volume, as we’ve introduced lower-priced whiskeys into the market. That’s the most telling statistic—we have to work a lot harder in sales and marketing than we did before.”
Cedar Ridge Distillery in Iowa produces Bourbons, ryes, wheat whiskey, and a single malt, along with specialty labels made with different finishing options. Founder and CEO Jeff Quint says his company got accustomed to double-digit growth for many years and is now learning to survive in a flat economic environment. “We’re not taking as many risks as we have in the past,” Quint says. “We’re opening in fewer markets, and we’ve tightened our marketing focus down to the places where we’re already succeeding. It will be a couple of years before we resume any form of new market investment. It’s a new mindset for us after such a long span of growth.”
“With the American whiskey category essentially flat, brands are having to take market share from other companies to grow,” explains Orlin Sorensen, cofounder of Washington’s Woodinville Whiskey, which is now part of the Moët Hennessy portfolio. But he adds that Woodinville is well-positioned from a value-to-quality perspective. “We’re staying true to who we are and what got us here. There are a lot of brands struggling, and we hear about it every day. But consumers are more educated now than ever before, and that bodes very well for us.”
Castle & Key director of sales Jonathan Newton also sees promise amid the clouds, though he notes the immediate future is uncertain for craft distillers. Castle & Key makes several Bourbons and ryes at its Frankfurt, Kentucky distillery, as well as gin and vodka, and Newton says the company is in a strong position, though he admits that it didn’t fully meet its growth targets last year.
“I feel the outlook for craft whiskey is very positive for brands that are positioned correctly,” Newton says. “Consumer demand for premium, small-batch spirits continues to be strong as people seek quality, authenticity, and unique offerings.”
From his perspective, some of the pitfalls currently affecting craft whiskey include supply chain hurdles and looming tariffs for international buyers, in addition to increased competition, distribution challenges, and changing consumer habits. “We’ve adjusted our strategy to focus more on targeted distribution, innovative product offerings, and strengthening customer relationships,” Newton explains. While these challenges are significant, they also present opportunities for us to adapt, refine our strategies, and strengthen our brand.”
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