State of the Beverage Industry - Update

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If you are a member of the distilled spirits industry in the USA, or if you have been keeping up with related headlines, then you already know that distillers and brand owners are facing numerous challenges:  

  • Consumer preferences are changing.  Some consumer groups are moving away from hard liquor and towards THC, but changing legislature will impact the availability of these products in late 2026 and beyond.
  • Exports of bottled products have sharply fallen because of tariffs and related political posturing.
  • Many distilleries have been forced to close their doors and to liquidate their assets.
  • Barrel brokers/investors are facing the reality that their inventories do not have the value they expected.
  • The prices for glass bottles, metal cans, corks/stoppers for bottles and even cardboard have skyrocketed, due to tariffs and transportation increases.

In August 2024, there were 3,069 active craft distilleries in the USA.  In August 2025, the number was 2,282, representing a casualty rate of 25%!

This is very bad news for the companies involved and for their employees, and the consequences reach far beyond the confines of their distilled spirits plants.  Equipment suppliers are now facing overstock and increased production cost scenarios that will affect their cash flows and long-term survival as well.

Is there a silver lining hidden beyond these dark clouds?  There is one indeed: many companies can still re-invent themselves, cater to the emerging consumer trends, follow the market into new areas.  New players seeking to enter the industry are also facing good news: there is an ample supply of used equipment available for a fraction of what it used to cost just 12 months before.  There is also a large pool of skilled workers eager to continue their journey in this industry.

The past 12 months have been very challenging, but postponing the implementation of solutions to these challenges is likely to result in even larger obstacles to overcome: the time to plan and act is now!  Reach out to me if you need help defining or implementing a roadmap to survival.

Cheers!

Luis Ayala, Editor and Publisher

http://www.linkedin.com/in/rumconsultant