Decline in US Bourbon Demand

[Twisted Brick]

The Wall Street Journal today reported a significant deterioration in demand for bourbon in the US. After a long period of growing bourbon popularity, 2023 saw a 1.2% decrease in sales, the first decrease in almost 20 years. The first 9 mo’s of 2024 saw that decrease grow to 4%.

The decrease has resulted in a glut of bourbons on the market, price erosions and an increase in smaller distilleries closing. MGB hasn’t gone unaffected either, reporting slower sales to its contract customers. Kentucky, the largest player in the US bourbon industry, is making three times the volume it is currently selling. Kentucky alone had 14.3 million barrels of bourbon aging at the beginning of 2024. While global demand should remain stable, the threat of retaliatory tariffs from overseas remains real.

So what does this mean? Reduced prices and smaller distilleries dropping out. I have had the opportunity to sample a fair number of smaller and start-up distillery expressions and submit that I think a good number of members here make better. JMO, though.


Decline in US Bourbon Demand

[Copperhead road]

Very interesting article twisted brick,
I would not have expected that decline in today’s market and the popularity of bourbon.
Could end up with much cheaper spirits from the bottle shop I guess…

Like you say people here a producing a better product at home

[LWTCS]

People are tired of paying $50 + for $30 bourbon.

When I joined this forum Blanton's was 40 bux. There isn't even an age statement on the bottle.....

[Bolverk]

Alan Bishop as been warning of this for like 2-3 years now.

To echo what LWTCS said...
Bourbon used to be a blue collar whiskey and now it's not.

The Bourbon market is over saturated with over priced shitty whiskey... it was bound to happen. The market will always correct itself.

[jonnys_spirit]

The Wall Street Journal today reported a significant deterioration in demand for bourbon in the US.

Challenge accepted! Lol.

Cheers,
jonny

[subbrew]

The new hot spirit is Tequila. The "trend setters" that were buying bottles to have a bourbon collection have now turned to Tequila. And in a few years it will be something else. A lot of people follow the trend setters.

And some of us do the same thing year after year and assume in 20 or 30 years the trend will come back around to us. In the mean time it will be easier to find that bottle of Booker's you wanted.

[Copperhead road]

Gin is becoming huge and trendy in Australia also.

[SaltyStaves]

The pandemic drove demand and the distilleries answered. That demand has now dipped and people are no longer invested as much in the chasing and flipping. Pricing has certainly helped push buyers out of the market.

https://apnews.com/article/brownforman- ... 7769969c0b

[LWTCS]

Also, define the significance of a drop in demand?
The product has been over produced as a commodity, and now this slump could really be rebranded as unrealized profit. Not necessarily profit loss since many players remain profitable. Just not as profitable.

I am always confused by the "if we are not growing, we are dieing" way of thinking.

There is a long way to go before bourbon gets to 1970s sales levels.

[NormandieStill]

I am always confused by the "if we are not growing, we are dieing" way of thinking.

This is the crux of the issue for me. The vast majority of business has integrated the idea that growth must be permanent and ideally, led by the company, not the clients.

The concept of bootstrapping a firm in which you retain ownership is so alien now that professional business advisors don't understand you when you explain it.

[Deplorable]

Well, it was bound to happen.
Those people holding onto bottles for the secondary market may end up selling at a reduced profit, or even a loss. This could, as stated above mean you can finally find that elusive bottle you've been seeking for a reasonable price.
It may also lead to increasing availability and lower costs of 5G and 10G barrels as the startup distilleries shutter their operations.
In the meantime, this will have zero negative impact of the ever-growing community of home distillers and their relentless pursuit of a better bottle of spirits.

[bilgriss]

So much of this is the inevitable pendulum swinging back. Other producers and advertisers coupled with the public's changing interests and that next 'new thing'. I agree with the comment that tequila has become the new frontier for many. In the beer world, we had a big swing towards flavored sugar waters, which I would think has a massive profit margin compared to aged liquors.

People are led by trends, but the pendulum also swings back.

The largest trend to look for after the expansion of many craft distilleries is consolidation. Again, like in the beer world, the big boys start buying up the more successful of the small ones and the number of independent operations will shrink. It's all interesting.

[6 Row Joe]

The new hot spirit is Tequila. The "trend setters" that were buying bottles to have a bourbon collection have now turned to Tequila. And in a few years it will be something else. A lot of people follow the trend setters.

And some of us do the same thing year after year and assume in 20 or 30 years the trend will come back around to us. In the mean time it will be easier to find that bottle of Booker's you wanted.

I have some friends that have chased bourbon for years and now have "bourbon burnout" and are switching to tequila and rum. I have about 10 bottles to go and I am putting the brakes on. No need to collect any more. I'll die of liver failure before I drink them all. LOL

[zach]

I follow this guy on YT who is in the process of starting his own craft distillery. He does tastings and hunts rare bottles at stores around the country.

The video below is from a Kentucky Bourbon festival and the subject is the decline of whiskey. TJ has a speech at around 48 minutes which he talks in detail about the current state of whiskey.

[Bolverk]

Alan Bishop has a nice rant here