Latest news with #LucaMarianoDistillery
Black America Web
3 days ago
- Business
- Black America Web
Whiskey Industry Shifts In Kentucky, With Some Distillers Declaring Bankruptcy
Kentucky has long hedged its bets on its revered whiskey industry, which, according to the Kentucky Distillers' Association, brings in around $9 million a year. With the whiskey industry shifting along with changing habits of imbibers, some Kentucky distillers have declared bankruptcy, while others are reporting slowed sales. A new report from Newsweek highlighted some of the struggles the whiskey industry in Kentucky is facing of late, emphasizing the financial woes of Luca Mariano Distillery, which just filed for Chapter 11 under its LMD Holdings business name. The outlet, speaking with the Distilled Spirits Council of the United States, obtained a statement from the association, which reads in part that the 'hardships facing distilleries are not unique to those just in Kentucky.' The statement rings true as there has been a trend among the younger generations of abstaining from drinking and preferring a 'dry' lifestyle by ditching booze, sometimes in favor of going 'California Sober,' which points to the ingestion of THC-based drinks. The non-alcoholic drink trend, also widely stylized as NA drinks, has exploded as a category over the past few years. We care about your data. See our privacy policy. According to the publication, Luca Mariano Distillery launched its operation just this past June and is housed on a 553-acre estate in the town of Danville. Francesco Viola, the brand's owner, told a local outlet, the Lexington Herald-Leader , that the filing is a strategy to solidify long-term success for the distillery. Other companies, such as Garrard County Distilling, are struggling as well after it was reported that the Lancaster-based brand was put under receivership and shuttered its operations in 2024. A Google search shows that the distillery is temporarily closed, but little else has been revealed about its future. Stoli Group USA, which produced the award-winning Kentucky Owl whiskey brand, filed for bankruptcy last year, as reported in great detail by Whiskey Advocate here. In a statement to Newsweek , the Distilled Spirits Council shared that the shakeup occuring right now for the Kentucky whiskey business has hit spirits producers of all sorts, hampered by rising costs for materials to produce the priduct, a drop in sales since the boom of the COVID-19 pandemic, and the looming threat of President Donald Trump's tariff policies that have halted trade and export between Canada and other nations that often purchase American spirits in bulk. — Photo: SEE ALSO Whiskey Industry Shifts In Kentucky, With Some Distillers Declaring Bankruptcy was originally published on
New York Post
4 days ago
- Business
- New York Post
Kentucky's $9B whiskey industry in crisis as Gen Z drinkers shun bourbon, tariffs take toll
Kentucky's legendary whiskey business is experiencing its worst crisis in decades, with major distilleries shutting down and thousands of jobs at risk as the industry struggles against declining sales, changing drinking habits among Gen Z consumers and damaging trade disputes. Three prominent Kentucky distilleries have collapsed into bankruptcy over the past eight months, marking a dramatic downturn for an industry that generates $9 billion annually for the state. LMD Holdings, which operates Luca Mariano Distillery, owes more than $25 million to creditors, while Garrard County Distilling faces nearly $26 million in debts. Advertisement Kentucky Owl, owned by international spirits company Stoli Group, has also filed for bankruptcy protection with millions in outstanding obligations. 4 Bottling lines stand idle at Kentucky distilleries as the state's $9 billion whiskey industry faces widespread shutdowns. Chance – The financial devastation extends far beyond individual companies. More than 23,000 workers across Kentucky's whiskey region depend on the industry for their livelihoods, with combined wages totaling $1.6 billion. Even established giants like Brown-Forman have eliminated hundreds of positions, while major producer Diageo has temporarily halted operations at Kentucky facilities. Advertisement The crisis stems from a dangerous combination of overproduction and rapidly shifting consumer preferences. During the bourbon boom of the 2000s, distilleries dramatically expanded production and investment, creating what industry experts now recognize as an unsustainable bubble. Kentucky currently stores over 14.3 million aging barrels of whiskey — more than two barrels for every person living in the state. This massive inventory buildup coincided with a sharp decline in demand. Advertisement American whiskey sales dropped 1.8% in 2024 to $5.2 billion, according to industry data. 4 Gen Z drinkers toast with lighter beverages, signaling a cultural turn away from high-proof spirits. Koldo_Studio – The problem has been made worse by younger drinkers, particularly those in Gen Z who are abandoning traditional high-proof bourbon in favor of ready-to-drink canned cocktails and lighter alcoholic beverages like hard seltzers. Social media platforms, especially TikTok, have accelerated this trend by promoting sweeter, lower-alcohol drinks as fashionable alternatives to whiskey. These viral trends have fundamentally changed how young adults view alcohol consumption, dealing a significant blow to bourbon's cultural appeal. Advertisement Alcohol use among young Americans has declined sharply over the past two decades, with the share of adults under 35 who drink falling from 72% in the early 2000s to 62% today. Binge drinking and underage drinking have dropped significantly, with Gen Z consuming 20% less alcohol per capita than Millennials did at the same age. Experts attribute the shift to growing health awareness, changing social norms, the rise of alcohol alternatives and economic or cultural forces shaping how younger generations view drinking. International trade disputes have created additional headaches for Kentucky producers who rely heavily on export markets. Canada, which purchases $40 million worth of Kentucky bourbon annually, imposed retaliatory tariffs earlier this year in response to President Donald Trump's levies on Canadian imports. 4 Historic distilleries across Kentucky, once booming, now struggle under the weight of overproduction and debt. Reagan – Trump's tariffs prompted Ontario retailers to remove American spirits from their shelves entirely. Michter's distillery alone lost $115,000 in cancelled Canadian orders. Advertisement The European Union presents an even larger threat, with plans to implement a 50% tariff on American whiskey that have been delayed several times in order to allow for trade negotiations to run their course. In 2020, the bloc imposed a 35% tariff on American whiskey, causing exports to drop precipitously. The financial pressure has exposed how many distilleries expanded too aggressively during the boom years, taking on risky debt loads that became impossible to manage as market conditions deteriorated. Advertisement Both startup operations and long-established companies have found themselves vulnerable to the sudden downturn. Industry leaders are now calling for major changes to help distilleries survive what they describe as a perfect storm of challenges. Proposed solutions include greater emphasis on sustainable production methods, expanded bourbon tourism experiences and development of ready-to-drink products that appeal to younger consumers. The crisis extends beyond distillery walls, threatening grain farmers who supply raw materials, tourism businesses that depend on bourbon trail visitors, and entire communities built around whiskey production. Advertisement 4 Aging barrels sit untouched, highlighting the deep inventory glut distilleries can't move fast enough. Jason Busa – Without significant changes in consumer behavior or resolution of trade disputes, Kentucky's signature industry faces a period of painful shrinkage. Industry analysts warn that conditions could deteriorate further if drinking trends continue moving away from traditional spirits and if international trade conflicts escalate. The state's bourbon heritage, built over centuries, now confronts an uncertain future that will require dramatic adaptation to survive.
Time of India
5 days ago
- Business
- Time of India
Why Kentucky's $9 billion whiskey industry is spiralling into bankruptcy?
The land of bourbon is facing a brutal hangover. Once a symbol of American pride and Kentucky's economic backbone, the whiskey business is stumbling under the weight of a sluggish market, shifting consumer preferences, and mounting debt. LMD Holdings, parent company of Luca Mariano Distillery, is the latest to file for Chapter 11 bankruptcy. Kentucky's bourbon boom hits a wall LMD Holdings, registered in Michigan but operating in Danville, Kentucky, is reportedly staring down a "likely claim of over $25 million" from its largest creditor. Some debts are disputed, but the financial weight is undeniable. Founder Francesco Viola said the filing was a move to "maximise asset value" and believes the company can rebound with enough community and stakeholder support. The Luca Mariano bombshell is not a one-off. Garrard County Distilling, a $250 million facility, went into receivership and shut down just months after launching in early 2024. And the Kentucky Owl brand under Stoli Group USA filed for bankruptcy in late 2023, citing weak U.S. spirits demand and a devastating cyberattack that wrecked operations. Even the titans are wobbling Not even bourbon giants are safe. Campari Group, the parent company of Wild Turkey and Russell's Reserve, reported an 8.1% drop in year-over-year sales. The blame? A "soft trend" in the U.S. market, particularly for flagship Wild Turkey. Add in job cuts at Jack Daniel's parent company and it is clear the whole industry is in flux. Tariffs, TikTok, and taste shifts Experts point to deeper issues: global tariffs hurting exports, inflation-strained wallets, and Gen Z drinkers pivoting to low-ABV options like hard seltzers. Suddenly, aged bourbon in fancy bottles is less appealing than a casual canned cocktail. Whether Kentucky's bourbon empire can sober up and reinvent itself remains to be seen. Viola remains hopeful, calling his business model "successful" despite the storm. But with more distilleries falling by the week, the industry may need more than just faith, it might need a full-blown reinvention.
Newsweek
5 days ago
- Business
- Newsweek
Multiple Kentucky Whiskey Distilleries File for Bankruptcy
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Kentucky's storied whiskey business is facing significant difficulties, with a number of distilleries filing for bankruptcy amid mounting debt, falling demand and uncertain global trade conditions. Last month, LMD Holdings, the parent company of the Danville-based Luca Mariano Distillery, filed for Chapter 11 bankruptcy in the Eastern District of Michigan, where it is registered. Newsweek has contacted the company via email for comment. Why It Matters The state's bourbon and whiskey industry—estimated to be worth about $9 billion, according to the Kentucky Distillers' Association—is currently facing an array of challenges. Many, including cost-pressured consumers, shifting preferences among young drinkers away from whiskey and potential ramifications of tariffs on sales in key export markets, are also impacting the nationwide spirits industry and the thousands it employs nationwide. Bottles of whiskey on a shelf at a store on March, 15, 2025. Bottles of whiskey on a shelf at a store on March, 15, 2025. Peter Kneffel/picture-alliance/dpa/AP Images What To Know Court filings show that LMD Holdings is burdened with a significant amount of debt, including a "likely claim of over $25,000,000" owed to its largest creditor. Some of the claims are under dispute, according to the Lexington Herald-Leader. Owner Francesco Viola told the paper that the bankruptcy filing, which came only weeks after the distillery's June launch, was intended to "maximize the value of the assets for all stakeholders," and that the company was "poised to emerge successfully, ideally with the support of its employees, customers, community and creditors." The filing follows similar reports of other Kentucky distilleries facing financial difficulties. Garrard County Distilling, a $250 million independent distillery that began production in early 2024, has been placed in receivership and closed in April amid a failure to settle unpaid debts. Late last year, Stoli Group USA filed for bankruptcy along with its affiliate, the Kentucky Owl whiskey brand. That followed a sustained slowdown in spirits demand in the U.S., according to CNN, as well as a cyberattack that took down the majority of its operations. More recently, sales of the Kentucky bourbon Wild Turkey have slumped. In its half-year results, Campari Group, which owns the brand and its Lawrenceburg and Danville distilleries, reported that sales of Wild Turkey & Russell's Reserve had fallen 8.1 percent year-over-year "due to a soft trend for Wild Turkey in its core United States market." Beyond bankruptcies and financial difficulties, the American spirits and wine industry has also seen a number of companies cut jobs in an effort to stay profitable in an increasingly uncertain trading environment. In January, Jack Daniel's parent company, Brown-Forman, announced it would be eliminating about 12 percent of its workforce and closing a barrel-making plant in Louisville, Kentucky. What People Are Saying Luca Mariano Distillery owner Francesco Viola, in a statement to the Lexington Herald-Leader: "We filed to maximize the value of the assets for all stakeholders. Luca Mariano Distillery and LMD Holdings have a successful business model, have weathered the prior economic challenges in our industry, and are poised to emerge successfully, ideally with the support of its employees, customers, community and creditors."
