One of America’s most prominent producers of single malt whiskey has filed for bankruptcy. Westward Whiskey filed for Chapter 11 bankruptcy with the hope to restructure their business in the face of “significant liquidity challenges.”
Founder and CEO Thomas Mooney voluntarily submitted the voluntary petition under subchapter V of the bankruptcy code in the US Bankruptcy Court for the District of Delaware. This particular subchapter is used for small businesses and generally allows them to negotiate a reorganisation, retain control of their business and oversee the whole process.
Westward was founded in 2004 in Portland, Oregon, and gained a reputation as one of the premier names in the growing American single malt whiskey scene.
Despite the brand’s popularity, however, Westward have struggled with overproduction and decreased demand in recent years. Their Chapter 11 filing cited “significant liquidity challenges”, namely a “general decline and softening of demand for alcohol and spirits products post-Covid, especially over the past two years.”
Reduced demand has been made worse by an “overproduction of whiskeys” caused by the distillery “investing heavily in production capacity, hiring, and renting a large warehouse.” As such, the group are sitting on a large volume of unsold stock.
When coupled with additional factors such as rising costs and inflation, these issues have proven to be overwhelming for the distillery.
Westward have made efforts to reduce costs at the distillery, with monthly spending being reduced from over US$1 million to US$300,000. They have also faced difficulty in acquiring additional financing.
Interestingly, Westward were also part of the Diageo-backed Distill Ventures accelerator scheme. Diageo recently announced that they were withdrawing support for any future Distill Ventures programmes. Consequently, whisky producers have had to make adjustments to their business plans. For example, Denmark’s Stauning distillery announced that they will be forced to reduce their workforce.
(For more information on this story, check out our previous article “Distill Ventures, Diageo Drop Out and Subsequent Fall Out”.)
In a statement, Mooney noted that he believes the bankruptcy process “a necessary step” that will allow Westward to “explore financial and strategic alternatives to better position our company to thrive as an independent craft distiller.”
Restructuring the business will hopefully also Westward to save jobs, as well as negotiate their out of or around “burdensome contracts and related obligations.”
Mooney added: “The need for this restructuring process is driven by numerous challenges that have put a significant strain on our business: a decline in demand for bottled spirits in general; the rising cost of goods and services due to inflation that will only accelerate with tariffs; market access constraints that make it difficult for independent craft spirits producers to reach consumers; large obligations that we entered into, at a different time and under different circumstances; and significant investment toward increasing production and inventory.”
Despite these challenges, the team at Westward remain optimistic about their future. For example, it is hoped that the distillery will not close and that the business will continue to operate as normal throughout the process.
On top of this, the bankruptcy filing claims that their inventory and position within the market could be turned into a positive for the group.
Their current inventory is believed is over 6,800 barrels - the equivalent to over 170,000 9-litre cases of whiskey. The case filing points out the premium American whiskey (bottles over $60) is a growing category, believed to be worth $839 million annually.
Westward claim that their products are even out-performing the market average in the premium category. In California - a key market for the brand - their sales for 2024 showed a 16.1% compared to average growth of 15.6%.
The bankruptcy document states that it is Westward’s ambition “to become the most celebrated luxury American whiskey, and a top 10 American whiskey over US$75 per bottle,” and they are “well-positioned to do so” thanks to their inventory and reputation as an award-winning producer.
Mooney concludes that they “are confident that Westward has a bright future, and restructuring will position us to compete and win in the marketplace as it exists today, not as it was in the past.”
It’s certainly a trying time for the American whiskey industry. Earlier this year, distilling giants Brown-Forman and MGP announced job losses and reduced production at some of their sites. On top of this, the American Craft Spirits Association revealed in September 2024 that at least 49 US craft distilleries had closed since January 2023.
Unfortunately it’s not a uniquely American problem. Towards the end of last year, Ireland’s Waterford distillery submitted their own bankruptcy filing. Meanwhile in Scotland, Brown-Forman-owned Glenglassaugh announced that they were entering a shared production with Glendronach, sparking rumours about the distillery’s future.
On top of this, producers both in and outside of America’s are facing uncertainty in the aftermath of President Trump’s tariff plans. Spirits entering the US are being subject to additional levies, while many key markets are threatening retaliatory tariffs on American made spirits - that is, if they haven’t already been introduced.
Hopefully Westward - and the wider whisky world - are able to navigate these troubled waters and are once again able to find themselves in a place they can thrive.
