U.S. Spirits Bankruptcies Accelerate in 2025: What Restaurants and Bars Should Do in 2026
OysterLink outlines how restaurants and bars can protect menus, suppliers and margins as U.S. spirits bankruptcies accelerate.
NEW YORK, Jan. 7, 2026 /PRNewswire/ -- A growing list of U.S. distillery bankruptcies in 2025 is reshaping how restaurants and bars manage liquor programs, supplier relationships and risk exposure. New filings, combined with falling alcohol consumption, shrinking exports and rising inventory pressure, signal a structural shift — not a short-term disruption.
Analysis by OysterLink, a hospitality jobs and market insights platform, shows that these bankruptcies have direct downstream effects on cocktail menus, distributor contracts and guest expectations, forcing operators to rethink how they source, price and position alcohol.
A Growing List of Distillery Bankruptcies
Several U.S. spirits producers filed for Chapter 11 protection in 2025, including:
- A.M. Scott Distillery (Ohio) – December 2025
- Dented Brick Distillery (Utah) – July 2025
- Devils River Distillery LLC (Texas) – May 2025
- JJ Pfister Distilling Co. (California) – May 2025
- House Spirits Distillery LLC (Oregon, Westward Whiskey) – April 2025
- Boston Harbor Distillery (Massachusetts) – March 2025
These filings come as overall U.S. spirits supplier sales slipped from $37.7 billion in 2023 to $37.2 billion in 2024, a 4% decline when adjusted for inflation, according to the Distilled Spirits Council of the United States.
Why Distilleries Are Struggling
Multiple pressures are converging at once:
- Americans are drinking less. Only 54% of U.S. adults report consuming alcohol, the lowest level Gallup has recorded in nearly 90 years.
- Exports are shrinking. U.S. spirits exports fell 9% year over year, with double-digit declines in American whiskey (-13%), vodka (-14%), brandy (-12%) and cordials (-15%).
- Inventory pressure is rising. American whiskey inventories have tripled since 2012, reaching nearly 1.5 billion proof gallons by the end of 2024.
- Craft spirits are contracting. The number of active U.S. craft distillers fell to 2,282. In contrast, employment in the craft spirits sector declined for the first time since the pandemic, dropping to 28,628 workers, according to the American Craft Spirits Association.
Trade tensions and retaliatory tariffs, particularly in Canada, where exports briefly fell 85%, have further reduced international demand, leaving producers exposed to excess supply and tightening cash flow.
What This Means for Restaurants and Bars
When a spirits brand collapses, the impact goes far beyond missing bottles on shelves:
- Cocktail menus must be reworked when a default pour disappears
- Distributor contracts may change with little notice
- Guests are increasingly told, "We no longer carry that," which affects brand trust and ordering behavior
"A single spirits bankruptcy can disrupt dozens of menu items across a restaurant group, especially when that brand is embedded as a standard pour," said Milos Eric, co-founder and general manager of OysterLink. "Operators who treat liquor sourcing as static are now exposed to unnecessary risk."
What Restaurants and Bars Should Do Now
1. Audit menus for brand dependency
Start by identifying cocktails, call pours and well spirits that rely on a single brand or distillery. This is especially important for default pours, signature cocktails and high-volume menu items. If a spirits producer halts production or files for bankruptcy, these items are the first to break.
Restaurants should test alternative brands in advance and adjust specs so drinks can be swapped without retraining staff, reprinting menus, or changing price points. The goal is menu continuity even if a supplier disappears.
2. Diversify suppliers, not just distributors
Many operators assume they are protected because they work with multiple distributors. In reality, different distributors often carry the same vulnerable producers. Bars should map which distilleries sit behind their top-selling SKUs and confirm that backup producers are approved, priced and available.
This is particularly critical for house spirits, whiskey pours and craft brands that are exposed to export declines and inventory pressure. True diversification happens at the producer level, not the delivery level.
3. Renegotiate contracts with flexibility clauses
Supplier and pouring agreements should account for financial instability in the spirits market. Contracts that lock restaurants into a single producer without substitution clauses increase risk when a brand files for bankruptcy or faces prolonged shipping delays.
Operators should revisit terms to allow equivalent replacements without penalties and ensure pricing protections remain in place during transitions. Flexibility clauses can prevent sudden cost spikes and last-minute menu changes.
4. Track category risk, not just pricing
Pricing alone no longer tells the full story. Categories like American whiskey and craft spirits are under sustained pressure from falling consumption, declining exports and record-high inventories.
Restaurants should balance these with lower-risk or growing segments such as ready-to-drink cocktails, lower-ABV spirits and versatile base liquors that have broader supplier support. Monitoring category-level risk helps operators avoid overexposure to segments most likely to experience future disruptions.
The Bigger Signal
The spirits industry's struggles mirror broader shifts in consumer behavior toward moderation, health awareness and selective spending. For restaurants, the lesson is clear: Alcohol programs now require the same contingency planning as food supply chains.
"This isn't about panic—it's about preparation," Eric added. "Restaurants that adapt their sourcing strategy now will be far better positioned if more suppliers exit the market."
About OysterLink
OysterLink is a job platform for restaurant and hospitality professionals, reaching over 400,000 monthly visitors. The platform connects talent with opportunities across the U.S., including top-paying bartender jobs in New York City and restaurant manager jobs in New York City.
OysterLink also publishes data-driven trend reports, industry insights and interviews with hospitality leaders. To explore more labor market data or post a job, visit www.oysterlink.com.
Media Contact
Deniz Cervatoglu
[email protected]
Sources:
- American Craft Spirits Association and Park Street. (2025). Craft spirits data project 2025. American Craft Spirits Association. https://americancraftspirits.org/wp-content/uploads/2017/02/2025-craft-spirits-data-project-102125-final.pdf
- McLoughlin, F. (2025). Trouble brewing. The real reason 7 major distilleries filed for bankruptcy in 2025 as fewer Americans are drinking than ever. The Sun. https://www.the-sun.com/money/15695897/major-distilleries-filed-bankruptcy-alcohol-consumption-decline-tariffs/
- Snider, M. (2025). Bankruptcies hit US spirit makers as Americans drink and spend less. USA Today. https://www.usatoday.com/story/money/food/2025/12/25/liquor-spirits-industry-bankruptcies/87914241007/
SOURCE OysterLink
Share this article