Is The 21st Century Whiskey Crash Here?

By Richard Thomas

Going into 2025, the tea leaves were already looking like at least a slowdown in sales was looming. By the end of September, the picture was one of a sales slump rather than a mere slowdown. After fifteen years, the US Bourbon Boom was over, while across the Atlantic sales were down for Scotch and Irish Whiskey as well. The final proof that the boom times are over came on Friday, September 27th when data released by the Federal government confirmed individual corporate reporting from the industry’s giants: the volume of new whiskey coming off the stills of American distillers had fallen by 28% for the Q1 2025. Against that, the volume held aging in warehouses is now triple what it was a decade ago, pointing to a potential picture of oversupply.

Numbers like that have prompted some pundits to declare that the world’s whiskey industries are headed to repeat of the Great Whiskey Crash of the 1970s. Briefly, that crash saw the American market devastated when the Baby Boom generation turned decisively away from brown spirits. For American whiskeys in particular, this led to a dark time when sales fell steadily, year after year, for almost twenty years. The situation was as bleak in Ireland, heavily dependent on American drinkers, while the Scotch industry saw were partly spared only by its diversified export market.

The pundits crying doom are, as usual, wrong. One key difference for the bourbon industry is that their predecessors of the 1970s continued overproducing for years after the market had turned against them, a mistake the new data clearly shows the modern industry is not repeating. Other differences between what happened in the 1970s and the modern situation are also obvious, but remain obscure because they don’t fit the clickbait model of infotainment that so drives not just blogging, but mainstream journalism.

The full and predictive truth is that the only people who know what is really going on right now have access to detailed sales and marketing data from multiple large companies. That may not even be true of the industry trade groups, like DISCUS or the SWA. The broad strokes of the slump, however, can be analyzed by outsiders. But first, the slump itself.

The Sales Slump
Jack Daniel’s has been the top-selling American Whiskey and the second best seller worldwide for decades, but sales first softened and then went into decline a few years ago. That shift allowed Jim Beam, who had been narrowing the gap through the Bourbon Boom, to finally overtake and replace Jack Daniel’s in the top slot in 2022. A few years ago, that was because Beam was growing faster; now it is because Jack Daniel’s is shrinking. Sales have fallen by 6% lately, prompting large lay-offs at Brown-Forman. I attribute Beam’s growth to sales numbers being an aggregate of a basket of brands the company, and by 2024 the company was finally putting some marketing muscle into all of them.

Wild Turkey sales have fallen by 8% and for the Summer 2024 to Summer 2025 period, whiskey sales have fallen in the US generally by 4.9%. But it’s not just US producers experiencing a slump. Suntory Global reported a 2.4% sales drop for the first half of 2025. That number includes Suntory’s Japanese whiskies, Jim Beam and a collection of Irish and Scottish producers. Scotch Whisky is very export dependent, since the home UK market is not very relevant in the $9.5 billion industry; so the fall in export sales of 3.7% was worrisome. The picture for Ireland (another producer with a tiny home market, but a vast export market) is more mixed, because 2024 saw export volumes increase while export values fell.

A market correction is absolutely in progress, but calling it a correction seems understated. “Crash” does not accurately describe it, accurate “slump” feels more accurate. That slump is more severe than perhaps it needed to be due to a few contributing factors.

Cause: Trump Started A Trade War
During his first administration, Trump toyed with starting a trade war not just against America’s supposed rival in China, but also with our partners and allies. The European Union invented what has became a now standard global response to Trump’s bluster: impose duties on American Whiskey imports. In 2018, they sought to pressure Senator Mitch McConnell (R-KY), then Senate Majority Leader, by attacking a major Kentucky export. McConnell is not longer leader of the Senate and headed for retirement, but nearly all American Whiskeys are made in three red states: Kentucky, Indiana and Tennessee. Also, whiskey is a relatively painless product to put tariffs on, since consumers can substitute it with whiskeys from other countries and higher whiskey prices are unlikely to drive inflation.

In 2025, Trump threatened even countries with which the United States has virtually no trade with tariffs. Most of our trade partners adopted the EU model and put whiskey on their list of products to slap retaliatory tariffs on. The result of most of the world slapping extra taxes on bourbon and other American Whiskeys is that by April 2025 exports plunged by 70% year on year.

Make no mistake: while American distillers have the luxury of their domestic market also being the world’s largest market for whiskey, they rely on exports as a hedge against changing tastes in that domestic market. Failure to do so was a contributing factor in the Great Whiskey Crash of the 1970s and 80s, and they’ve all learned from the successful models of not just the Scotch Whisky industry, but also some of their peers (i.e. Maker’s Mark and Jack Daniel’s). By destroying exports, Trump is destroying the hedge that US whiskey-makers were relying on to see them through the generational change that is definitely taking place (see below).

The Pandemic Masked The End
Overall sales for whiskey were already softening in 2018-19 due to Trump’s first trade war, with exports falling 16% that year and continuing to contract after that. The Biden years saw a moderate turn-about and stabilization in exports, but the lost ground was never completely recovered. Yet behind that Trump-inflicted punch in the nose, there were also signs that the growth of the domestic market was slowing. Not in contraction for sure, but slowing down. Then came the Pandemic of 2020.

Although bars and restaurants closed, liquor stores were up there with the supermarket as being considered a vital service exempted from restrictions. Drinking soared during the Pandemic, with whiskey sales in the US surging by 8.2% and “drain your cellar” becoming a popular hashtag. Increased drinking remained a thing through to 2022, with the contraction and a return to normal habits only beginning to assert itself in 2023.

Many of the sales and production numbers in the news these days use the following language: “lowest level since 2019.” That is not a mere coincidence. The surge of the Pandemic was not going to last indefinitely, and it masked/delayed a generally softening market that was already developing. Another way to look at it is to say the Pandemic extended the boom times by another three years, but the end was already in the wind and would have arrived earlier had it not been for Covid-19.

Gen Z Is Turning Against Whiskey The Way Their Grandparents Did
The driving force behind the Great Whiskey Crash was changing generational tastes, as the Boomers rejected whiskey and moved heavily to wine and vodka. The conventional wisdom, backed up by market and polling data, shows that Gen Z is choosing pot over not just whiskey, but booze generally. The story one often hears is that Gen Z is repeating their grandparents’ experience in rejecting the mind-altering substances favored by their parents.

The truth is more nuanced than that. Although some Gen Z have embraced the (narcissism of) New Sober movement, studies show that half the cohort are still basically drinkers. 1 in 4 Gen Zers are using a mix of substances that includes cannabis, substantially higher than is the case with Millennials. The takeaways there are 1) most of Gen Z is still open to drinks, just less so than their predecessors; 2) the shift is taking place with them extends to alcohol in general, not just whiskey. The entire US liquor market except tequila is experiencing declining sales, and even tequila shows some signs of softening.

The arrival of Gen Z with their own trends differs from that of the Boomers forty years ago because of their relative proportions. Almost 80 million Baby Boomers were born, and approximately 76 million of them are still with us. They were a much larger cohort than the Silent Generation that preceded them, because birth rates were suppressed by the Great Depression and World War Two. When the Boomers began to enter the marketplace and economy, they had an impact entirely in proportion to their numbers: when the youngest Boomers turned 21 in 1985, 1 in 3 Americans was a Boomer.

Gen Z does not and will not occupy such an outsized role in the population as a whole. The size of the Gen Z and Millennial cohorts are roughly equal. The main whiskey drinkers in America are Gen X and Millennials, comprising 41% of the population combined and the age range of basically 30 to 60.

So, Gen Z has turned away from whiskey, but it is a pivot, not the about face of the Boomers. The proportional potential impact of Gen Z’s preferences are also less than that of the Boomers. Gen Z can absolutely move needles, but they cannot produce the wild swings the Boomers did and do not seem inclined to.

So What Will Happen?
Prognostication is a bad profession, but in 2019 I guessed that Gen Z would prefer something other than the wine, craft beer and whiskey that were so popular in the early 21st Century. That is the way generational trends work: people reject the staples of the moment and only then find a new staple to occupy them. In 2019, this was only starting to become clear, as the oldest Gen Zers were 24. The drinking surge of the Pandemic obscured the reality of the situation, but since then fully half the cohort is of drinking age in the United States. The preferences of 38 million Americans are something one can easily observe, and we are.

But just because Gen Z has a different slate of preferences does not mean the existing Millennial and Gen X customers are changing with them. What is happening and will happen with them is that they will drink less, which is the prevailing rule for people as they get older. Gen X is already beginning to age out of the picture, but just that: only beginning to. The Millennial whiskey drinkers still have another 20 years of steady consumption ahead of them. Collective

Assuming the younger half of Gen Z continues as the half 21 or older have, the growth potential for whiskey in general is going to revolve around putting an end to the Donald Trump’s pointless trade war. Even during the Great Crash, markets like Japan bucked prevailing trends, while Scotch Whisky engineered its rebound a decade before American and Irish Whiskeys were able to follow suit.

As Gen X ages and consumes less alcohol and Gen Z does not replace their consumption, sales will continue to contract. That is a recipe for a slow, ongoing decline, not a precipitous drop. In the short term, the picture looks like a return to sales numbers of the middle 2010s, which one might recall was mid-Bourbon Boom and a time when the major distillers were unable to keep up with demand. The party is clearly over, but that is hardly a bleak picture.

Moreover, the sales floor should be supported by this simple truth: there are as many Milennials as Gen Zers, and by the time Gen X has aged out of relevance to the drinking picture, Gen Alpha will be entering maturity.