Whiskey Market 2025 Forecasts and Trends

Whiskey has long been a cornerstone of the global spirits business, thriving on heritage, authenticity, and innovation. Yet 2024 brought visible growing pains for both American and Scotch categories -amid softening consumer demand, rising costs, and stiff competition. As we enter 2025, whiskey brands must manage an evolving marketplace: balancing the lure of premiumization with rising economic pressures and an oversupply that has begun to weigh on producers’ bottom lines.

In this long-read, we distill the critical insights from seven key articles on the whiskey market in 2024, blending them into a single, forward-looking perspective. This article not only synthesizes existing data but also provides clear strategic direction for alcohol marketing leaders seeking to navigate 2025 and beyond.

‍

Shifting Growth Patterns

‍

American Whiskey: The ‘Bubble’ Question

In 2024, the once unstoppable rise of American whiskey began moderating. Analysts who warned of a “Bourbon bubble” may be partially vindicated by two principal trends:

1. Production Glut and Slower Demand: Distilleries significantly ramped up operations in response to the extraordinary growth from 2019 to 2022, with American whiskey volumes climbing at a +5% CAGR during that time. However, IWSR reports show a -1% volume decline in 2023 and an additional -2% in the first eight months of 2024, mainly in the standard-and-below tiers.
2. Consolidation Pressures: The ongoing oversupply puts pressure on smaller non-distilling producers (NDPs) and craft distillers to differentiate. MGP Ingredients’ plan to reduce production in 2025, while focusing on branded spirits, symbolizes this pivot. Many new distillery projects - especially large-scale contract operations -launched in the hope of capturing a piece of the American whiskey gold rush. Now, faced with a potential glut, these companies must innovate or risk finding themselves oversupplied in a slower market.

Scotch Whisky: A Decline in Exports

Scotch whisky also faced headwinds. The Scotch Whisky Association (SWA) reported an 18% drop in export value in the first half of 2024 versus 2023, with volume down by 10%. While India became the leading market by volume, this shift reflects complex import dynamics rather than a surge in premium Scotch demand. In more established destinations, saturated premiumization and economic caution have cooled the once-booming secondary market for high-priced expressions.

The Role of Fear and Greed in Secondary Markets

Fluctuating auction prices for collectible bottles suggest the secondary whisky market is more volatile and cyclical than many believed. From the “extreme greed” peak of 2022 to the current “despondency or skepticism” phase in 2024, parallels with traditional investment markets are now evident. Even limited-edition icons such as Macallan’s Folio series saw sharp price drops. Despite the near-term slump, contrarian investors with a disciplined approach still see potential upside - particularly if they focus on rare, historically proven bottles rather than speculative new releases.

Key Takeaway: For whiskey marketing leaders, the slowdown in multiple segments underscores the end of an era of guaranteed, double-digit growth. A more mature, cyclical, and discerning marketplace awaits, requiring stronger brand stories, targeted innovation, and smart price strategies to maintain momentum.

‍

A Growing Global Category: Whiskey’s New Frontiers

‍

Despite the headwinds in mature markets, global whiskey remains on a modest upward trajectory. According to market reports:

• Market Size and CAGR: The overall global whiskey market reached approximately $61.51 billion in 2024, projected to grow at a ~4% CAGR to $71.85 billion by 2028.
• Emerging Markets: Countries like India, Brazil, and parts of Asia-Pacific are increasingly vital. India’s whiskey consumption soared (with 85 million 70cl bottles of Scotch imported from January–June 2024), even at steep tariff rates.

Market Segmentation and Innovation

The modern consumer’s palate is diverse, reflected in a segmented approach:

1. Alcoholic vs. Non-Alcoholic Whiskey: While non-alcoholic variants remain niche, they’ve emerged to cater to health-conscious and mindful drinkers.
2. Flavored vs. Unflavored: Flavored whiskeys - ranging from honey to spiced - help recruit new, often younger consumers.
3. B2B vs. B2C: Distillers increasingly sell directly via e-commerce, while traditional wholesale remains strong for large volumes.

Key Takeaway: Growth opportunities lie in emerging markets and product innovation. As disposable incomes rise and new consumer segments adopt whiskey, brands that keep pace with local tastes (e.g., flavored expressions, e-commerce accessibility) can thrive.

‍

Premiumization and the Price Squeeze

‍

Defining the Premium ‘Ceiling’

For over a decade, “premiumization” has driven whiskey’s core value proposition, with super-premium-and-above tiers enjoying double-digit expansions. Recent data, however, suggests cracks in the model:

• American Whiskey: Standard-and-below categories have dropped significantly in 2024, while super-premium-and-above still rose by ~6%. Premium segments (the middle tier) remain flat overall, as some consumers trade up from standard, while others exit the category or trade down from premium due to budget constraints.
• Scotch Distress at the High End: The slump in secondary markets for collectible Scotch calls into question the viability of “over-premiumized” offerings that rely on hype-driven pricing. Retailers are now resorting to discounts or “reduce” stickers to move stagnant stock.

Key Takeaway: Premiumization is not vanishing - it’s simply maturing. Consumers still desire high-quality whiskey, but they’re also becoming more discerning. Brands can’t rely solely on inflated prices or limited-edition mystique; they need real product quality, transparent production methods, and well-executed brand storytelling to justify top-shelf positioning.

‍

Overproduction and Glut Fears

‍

With U.S. whiskey production at record levels - Kentucky alone produced 2.7 million barrels of Bourbon in 2022 - concerns are growing about a supply imbalance:

1. Strategic Overproduction: Many distilleries bet on continued growth rates that mirrored the pandemic’s spikes in at-home consumption, leading to expansions.
2. Craft Distilleries & Contract Producers: The ease of launching new brands - often using sourced whiskey - fueled a rise in contract distilleries. Now, some face uncertain demand, forcing them to pivot toward branding, marketing, or niche product innovation.

Industry Response: Larger players might slow production slightly or shift focus to brand-owned lines that capture higher margins. Smaller operations are likely to face consolidation or acquisition unless they truly stand out with a unique story or product.

‍

Read also: Alcohol Sales Guide - How to Increase Alcohol Sales

‍

Regional Shifts in the United States

‍

California and Texas: Powerhouse Markets, Mixed Results

• California: Once a robust premium market, now sees significant declines in that tier - suggesting economic pressure on higher-income consumers. Standard segments have flattened, indicating a stabilization but not a rebound.
• Texas: Continues to show growth at super-premium tiers, yet standard whiskeys are declining. Premiumization persists, but at a more modest clip.

Other Key States

• New York, Pennsylvania, Illinois: Some bright spots in Premium and SP+ categories, albeit at slower rates. Downtrading in standard remains pronounced.
• Florida, Kentucky: Both states face notable declines in the premium tier, offset by leveling in the lower tiers - implying a divergence among consumers who can still afford higher-end bottles and those who have reduced overall spending.

Key Takeaway: Within the U.S., the whiskey market is bifurcating. Consumer demand varies across states, influenced by local economic conditions, cost-of-living changes, and brand loyalties. Tailored strategies for each major market - and especially each price tier - will be essential in 2025.

‍

Innovation as a Lifeline

‍

Cask Finishes and Blends

As competition intensifies and consumer knowledge grows, finishing whiskey in unique casks or combining multiple cask influences is increasingly mainstream. Brands once considered “pioneers” (like Angel’s Envy) are now joined by a multitude of finishing experiments. Authentic flavor development - rather than flashy marketing - will secure long-term credibility.

Terroir and Transparency

Some producers emphasize terroir or site-specific grain sourcing to differentiate themselves, especially in the craft segment. Others see terroir as just one more story angle. Regardless, brand transparency resonates with consumers. Providing details on mash bills, barrel origins, and blend compositions fosters trust - particularly crucial as wallet-conscious customers scrutinize perceived value.

Product Extensions and RTDs

Brands continue to invest in ready-to-drink (RTD) formats and flavored releases to appeal to broader demographics. While not purely “whiskey,” these line extensions can bring new drinkers into the fold, creating cross-selling opportunities for higher-end expressions.

‍

Consolidation and M&A

‍

As the supply-demand balance shifts, smaller and mid-sized distillers without the economies of scale of major players may struggle. Some will face buyouts, while others may fold. In parallel, large spirits companies continue to expand their whiskey portfolios:

• Cask-driven acquisitions: Investors and corporations that see future potential in aging stock could acquire smaller contract distilleries or independent bottlers.
• Cross-Category Synergies: Larger conglomerates may pivot resources to categories still showing robust growth (e.g., certain gin or tequila sub-segments) if whiskey margins dip.

‍

Strategic Recommendations for 2025

‍

1. Precision Premiumization
   • Don’t abandon premium or super-premium lines, but ensure top-shelf expressions reflect genuine craftsmanship. Over-inflated pricing without real value risks backlash.
   • Keep an eye on your competition’s discounting trends. Resist deep price cuts that undermine brand equity, but be flexible enough to adjust to changing market demands.
2. Local Market Tailoring
   • State-by-state strategies in the U.S. can prove vital. Assess consumer trading behaviors in California, Texas, Florida, etc., and adapt promotions, product lines, and price tiers accordingly.
3. Authentic Innovation
   • Explore cask finishes, blending, or terroir-based expressions that enhance flavor and storytelling. Avoid “innovation for innovation’s sake” - consumers can see through superficial gimmicks.
4. Transparent Branding
   • Embrace full disclosure of production processes, sourcing details, and brand heritage. This fosters trust, particularly as consumers become more selective.
5. Measured Production Planning
   • Avoid simply matching the largest producers’ expansions. Align production volumes with realistic market forecasts. Explore contract production or private-label programs to manage surpluses.
6. Contrarian Opportunities in Secondary Markets
   • For portfolios that include limited-edition collectibles, watch secondary-market data carefully. Educated contrarian buying at depressed prices may yield strong returns when sentiment rebounds.
7. Prepare for Consolidation
   • Smaller NDPs and craft distilleries should bolster unique brand stories, specialized production methods, or niche distribution to stand out. Otherwise, M&A or partnership discussions may become inevitable.

‍

Conclusion

‍

Whiskey’s golden era of seemingly limitless expansion has given way to a more nuanced environment as we enter 2025. The American whiskey market faces oversupply and price pressures, while Scotch exporters grapple with dipping demand and over-premiumization concerns. Yet, the global category at large still carries a strong foundation, driven by cultural appeal, innovative products, and rising consumer knowledge.

For alcohol marketing leaders, success in 2025 hinges on strategic clarity and genuine brand differentiation. From carefully managed premium lines to well-executed cask innovations - and from micro-targeted state campaigns to transparent, consumer-friendly messaging - the whiskey market rewards brands that deliver real value in a cautious, crowded space.

By embracing data-driven strategies, mindful production, and authentically engaging storytelling, industry players can turn today’s challenges into tomorrow’s growth engines, ensuring whiskey remains a compelling and profitable segment in the years ahead.