Whiskey Production Continues to Slow
The production of American Whiskey, per the TTB’s publicly accessible proof gallon data, peaked in 2023 at 299.7 million proof gallons. In 2024, that figure fell to 286.7 million, and again to 206.9 million in 2025. The 2024-to-2025 decline of 27.8% is the steepest on record since the TTB began publishing production data. 2025 output fell below 2018, when an overwhelmingly significant portion of today’s capacity was not online. Today, countless stills sit idle – the lack of utilization a stark reflection of how little need there is for new fill today.
To date, 2026 is falling faster. First-quarter production, the cleanest early read on the present calendar year, fell -22% from Q1 2025 production. For the last decade, Q1 production has held a stable 26-30% share of full year outputs, which make it a reliable base for forecasts. Carried across the year, this Q1 points to 2026 finishing near 160 to 175 million proof gallons — a level last seen in 2016.
A mechanical Q1 annualization implies a YOY of -9%, but we project further decline closer to -20%, which puts production back at 2016 levels. That said, increasing news of production layoffs, not yet reflected in the data, are indicative of a continued decrease in output than reflected in the annualized figure. Said plainly, too much production has been turned off in the first half of the year to read the data alone as a stabilization in output.
| Year | Proof Gallons Produced | Year-over-Year |
|---|---|---|
| 2021 | 242,205,861 | +9.2% |
| 2022 | 278,450,592 | +15.0% |
| 2023 | 299,744,966 | +7.6% |
| 2024 | 286,670,768 | −4.4% |
| 2025 | 206,917,926 | −27.8% |
A Deliberate Shift
Stills will run again when the barrels already in storage no longer cover projected case volumes. The existing pool of aging barrels was fueled by a scarcity mindset that inflated the whole chain — cooperages, brokers, bottlers, brands, and their banks all built to the same curve. Six years ago, brands forecasting growth were not confident they could access enough aged liquid to grow with them. That scarcity drove barrel prices to multi-year highs, and many brands turned to asset-backed lending to lay down new fill. Today, the market has swung the other way. With warehouses already full, the only rational move is to stop making more.
The Brown Spirits Forecasting Disadvantage
The reset is concentrated, and a capture of the inherent disadvantage whiskey has to other spirits in balancing today’s production with tomorrow’s forecasts. In 2025 whiskey production fell 27.8%. Over the same year, rum, gin, and vodka production rose 26.9%. This supply-demand dislocation is common in an industry that must place big bets on the future, while clear-spirits producers can respond quickly to case-volume consumption figures. Those that understand the product, understand the cycles of over and undershooting the realized figures of the future.
A Reset, Not a Retreat.
The pool of young barrels is deep enough to carry case-volume demand for the coming years. Turning the stills back on will happen when inventory demands it, not before. That said, gross oversimplifications and fatalistic summarizations such as ‘whiskey is dead’, are far from the correct outlook on American Whiskey. This is a structural reset in how production capacity balances with real case volumes. In the same way it took time to build out, it will take time to reset but beware of the scare tactics deployed by some. For many, this reset is a path toward a healthier industry. For operators with capital, asset-light and cash rich balance sheets, a clearing glut is the most favorable setup in years.
Source: U.S. Alcohol and Tobacco Tax and Trade Bureau, Statistical Report — Distilled Spirits (annual data through 2025; monthly detail through March 2026). Figures in proof gallons.
WTP Analysis reflects the views and market observations of the Whiskey Tide Partners team. It is provided for informational purposes and does not constitute financial, legal, or investment advice.