The news dropped in the afternoon, Eastern Standard Time, on the Friday after Thanksgiving. The stock market and postal service were open, but most people in the United States make it a long holiday weekend.
“Stoli Brand Vodka’s US Arm Files Chapter 11 Bankruptcy”, announced the Bloomberg headline. Two days earlier, the company sought court protection in Texas.
The group’s US division, which owns dozens of spirit and wines brands, listed more than US$100 million in assets, and between US$50 million and US$100 million in liabilities on its Chapter 11 petition. One of those brands is the juggernaut Stoli Vodka, which is distilled in Latvia. Another is Kentucky Owl, which is made in Kentucky.
The following day, it was announced that Waterford Distillery, the Irish operation focused on terroir-driven whiskies, had appointed receivers to keep its business afloat.
There is a prevailing sense of trepidation from industry watchers. I don’t like it when people call me a pessimist. I prefer another term: realist. The thing that has me particularly uneasy is that neither of the aforementioned distilleries in peril is the work of whisky hobbyists-turned-distillery owners.
I’ve lost count of the number of times over the past decade that I’ve heard a whisky-maker or salesperson say “but it’s local” as a selling point. I appreciate ‘craft’, and I always want to support local, but it’s a mistake to overlook the merits of mass-produced whiskies that are categorically excellent. After all, those companies have been making their products for generations. They’re pretty good at it.
As the visionary who revived the mothballed Bruichladdich Distillery, on Islay, and served as its CEO until it was sold to Rémy Cointreau in 2012, Waterford’s founder, Mark Reynier, has enjoyed a sound reputation as a pioneer and disruptor. This magazine described him as a “religious figurehead”. He brought his boundary-pushing approach with him when he started the Irish enterprise in 2014. Terroir-focused whiskies have been the focus, and they are delicious.
Also in 2014, Kentucky Owl came charging out of the gates. Four Roses veteran John Rhea, a Kentucky Bourbon Hall of Famer, was master blender. The producer quickly became known for its limited-edition blended bourbons, which fetched prices high enough that collectors went on the prowl.
In November 2023, it was announced that Dr Maureen Robinson, who occupies a spot in this magazine’s Hall of Fame, would take over from Rhea. The Diageo veteran, whose tenure there included work on Johnnie Walker, Old Par, and Buchanan’s, was one of the first women master blenders. The distillery has an ambitious US$150 million plan to build a distillery on a 170-hectare parcel.
Waterford and Kentucky Owl have the pedigree and products to become legacy distilleries, which makes them unique among the vast number of start-up distilleries in Ireland and the US, respectively.
If these young distilleries can’t make it through their growth spurts, we have to ask whether other scrappier ones will hold on. And what about the titans showing signs of vulnerability? Glenmorangie’s flagship recently went from being a 10 Years Old to a 12 Years Old. It’s hard to not to wonder if it’s because flagging sales have left the company with a glut.
The trepidation is well-founded. The economy is on the brink, and overall sales of whisky coming up disconcertingly short of recent years. Thanks to inflation, fears of tariffs — or, worse, an all-out trade war — the snowballing interest in low- and no-alcohol drinks, and the growing number of places where marijuana is legal, the ground is shifting, but that’s not to say that the sky is falling.
The world works in cycles, after all. For every stock market crash, there’s eventually a rally. For every era of excess, there’s a retreat to simplicity.
So 2025 will be the year I sit with bated breath waiting to see how that plays out. I guess even a pessimist — err… realist — can be optimistic sometimes.