Kentucky whiskey firms crumble with bankruptcy filings as Gen Z drinking declines

Kentucky's whiskey industry is in serious trouble as several distilleries have filed for bankruptcy, creating major problems for a business worth $9 billion. LMD Holdings, which owns the Luca Mariano Distillery in Danville, filed for Chapter 11 bankruptcy last month in Michigan, where the company is registered, as reported by Newsweek. The distillery owes more than $25 million to its biggest creditor, showing just how deep the financial problems go.

Owner Francesco Viola explained in Newsweek that the bankruptcy filing happened only weeks after the distillery opened in June. Newsweek also noted that these money troubles are not just happening in Kentucky but are affecting whiskey makers across the entire country. The problems include customers having less money to spend, young people drinking less whiskey, and worries about trade taxes that could hurt sales to other countries.

The bankruptcy wave has hit multiple major distilleries in just eight months, threatening over 23,000 jobs and $1.6 billion in worker pay, according to the International Business Times. Garrard County Distilling, a $248 million facility, went into receivership in April 2025 after failing to pay back $25.89 million to Truist Bank. Stoli Group, which owns Kentucky Owl whiskey, also filed for bankruptcy in late 2024 with $5.4 million in debts.

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The International Business Times reports that even big companies are cutting jobs, with Brown-Forman eliminating 700 positions in January 2025. The problems go beyond just the distilleries themselves, affecting bourbon tourism that brought 2.5 million visitors in 2024 and the farmers who supply 21 million bushels of grain. Young people's changing drinking habits, influenced by social media platforms like TikTok, have shifted demand toward ready-to-drink cocktails and low-alcohol options instead of aged bourbon.

A changing social scene in Chicago

This trend toward less drinking among young adults is clearly visible in Chicago and across Illinois, where the social scene is changing dramatically. Data from the National Survey on Drug Use and Health shows that drinking among Illinois adults ages 18-25 dropped from 64.2% in 2002-03 to just 51.6% a decade later, as reported by the Chicago Sun Times. Dr. Andrea King from the University of Chicago's Chicago Social Drinking Project found that only 25% of college-age students regularly binge drink now, compared to 35-40% in past generations. The Chicago Sun-Times also notes that this decline in drinking started around 2000 and has continued steadily.

For Chicago bars, this means fewer young customers and lower sales of traditional spirits like bourbon. The combination of Kentucky distillery bankruptcies and reduced demand from Gen Z drinkers could mean higher prices and fewer bourbon options for Chicago establishments, potentially forcing them to focus more on the cocktails and low-alcohol drinks that younger customers prefer.