World Spirits Report 2023: American whiskey

The once staggering growth of American whiskey slowed in 2023, as distillers continued to rebound from global inflation, the Covid-19 pandemic, and resulting supply chain issues.

From 2022 to 2023, nine-litre cases increased by 4.5% to 55.6m. Projections for 2024 indicate an increase of just below 4% to 57.8m.

“This year, I think there are economic headwinds that everybody’s navigating,” Chris Swonger, president of the Distilled Spirit Council of the US (Discus) says.

With a looming threat of a 50% tariff on exports to the EU, growth could be additionally stifled, though brands still view international markets as worthwhile avenues. “The international runway for growth continues to be a huge opportunity,” Susan Wahl, vice-president of American whiskey for Heaven Hill, says. “If American whiskey can take some of that market share, then we have an opportunity to even more rapidly expand production and reach.”

Another potential obstacle is a perceived forthcoming barrel shortage. With over 2,600 US distillers, there is a premium on new white oak for those making Bourbon. An oak shortage could lead some to create American single malt, which doesn’t require new wood, or to a change in Bourbon regulations. “It would not surprise me, five years from now, for all that legal stuff to have to be changed,” says Dixon Dedman, master blender for 2XO, “so that we can reuse barrels a second time, scraping them out and recharring”.

Beer is also fighting back. In 2022, spirits overtook the category for the first time, with 42.1% of the US beverage alcohol market compared with 41.9% for beer. In June, trade group the Beer Institute launched Stand With Beer, a website designed to sway consumers and legislators away from spirits. At the same time, some beer companies are making investments, with Molson Coors purchasing Kentucky’s Blue Run Spirits in August.

Despite these obstacles, Swonger remains optimistic about the prospects for 2024. “We’ll get over the hump,” he says, citing the growth of spirits-based ready-to-drink cocktails. In March, Jack Daniel’s launched a co-branded drink with Coca-Cola, building upon its already significant place in the market.

At the same time, Jack Daniel’s has catered to a thirst for premiumisation, which continues to drive American whiskey sales. “People are more willing to put dollars behind quality and heritage,” Wahl says. For brands such as Jack Daniel’s, Heaven Hill, and Jim Beam, a vast inventory of barrels means they can innovate with ease, often with well-aged whiskey.

Elsewhere, the rise of brands like Bardstown Bourbon Company and Barrell Craft Spirits suggests that there is more than one path to success, with consumer understanding towards sourcing, blending, and contract distilling taking new shape. In October, the founders of Bardstown Bourbon Company announced a new venture – Whiskey House of Kentucky, a US$350 million distillery specifically designed for large-scale, flexible contract distilling.

“Despite the short-term slowdown following the pandemic, the American whiskey market’s fundamentals are strong,” David Mandell, CEO and co-founder, says. “We are particularly bullish on the market, and see tremendous room for innovation and growth.”

Click here to read our World Spirits Report for the Scotch whisky category.

American whiskey brands to watch in 2024

Sagamore Spirit

In September, Italian company Illva Saronno, which owns Disaronno, bought Sagamore Spirit, announcing that it would relocate its North American headquarters from New Jersey to Baltimore. Sagamore was founded in 2013 by a group that included Kevin Plank of fitness brand Under Armour, and its mission to bring back Maryland-style rye begins a new chapter.

Barrell Craft Spirits

Barrell Craft Spirits proved you don’t need to be a distiller to make a dent. The brand celebrated its 10th anniversary in 2023 with the unveiling of a new blending facility and the release of its first non-cask strength whiskey. “We listen to the market,” founder Joe Beatrice says, and Barrell has been adept at forging its own path through skilful blends and inventive cask finishes.

Bardstown Bourbon Company

Building a whiskey distillery is expensive, which is why so many brands collaborate with Bardstown Bourbon Company, which has embraced the contract distilling model, while also championing blending, cask-finishing, and other avenues with its own line of whiskeys. With a new tasting room on Louisville’s Whiskey Row, word of Bardstown Bourbon Company’s influence will only continue to spread.