Near-constant news of a struggling economy, threats of inflation, and a general downturn of spirits, especially whiskey, has led to fears of a potential whiskey industry fallout. With brands struggling to meet rising supply costs and idle inventory coming up against a cooling demand, 2025 feels like a year of adjustment for the industry. When news of Westward Whiskey filing for Chapter 11 bankruptcy protection in mid-April hit, many thought it would lead to their doors closing for good. But as the CEO of Westward Whiskey sees it, the opposite is true, and their doors will be open even wider than ever before.

“All of a sudden, we found ourselves looking at an entirely different future. What is the right structure for our company? What's the right way to run our business, to be an independent distiller moving forward, and to do that in 2025 conditions and beyond,” says Thomas Mooney, CEO and co-owner of Westward Whiskey. “…we realized that this was the best process for us to restructure and become a company that can compete and win as an independent moving forward.”

Though the Westward Whiskey name may be new to some, the company has been around for over 20 years. Many know them as the original distillers of Aviation Gin, the brand Ryan Reynolds was involved in. Originally sold in 2016, their involvement with the brand finally ended a few short years after it was acquired by  Diageo in 2020 for $610 million. Planning for their post-Aviation Gin period, Westward Whiskey looked to put a renewed focus on their American single malt production, and to achieve those goals, they needed capital to make it happen.

In 2018, they partnered with Distill Ventures, the independently operated and Diageo-backed “accelerator for entrepreneurs building scalable drinks brands.” With American single malt growth hitting 131% from 2014-2017, this partnership allowed Westward Whiskey to meet rising demand and gave Diageo proximity to American single malt production, which their portfolio lacked.

From the COVID boom that saw sales of alcohol spike to unprecedented levels, to a 2025 economy in a dramatically different place, Diageo pulled funding from Distill Ventures in March 2025 to focus on its core brands. Viewing this from the outside, having Westward’s funding pulled seemed like a death sentence as it was a component of what led to filing for Chapter 11. But it wasn’t the whole picture.

Westward Whiskey’s Chapter 11 filing also states many reasons for restructuring and reorganizing its debts. The filing lists the company as “facing significant liquidity challenges caused by a range of factors,” and “numerous atypical events have put a great strain on the Debtor’s financial condition.” The filing continues, “a general decline and softening of demand for alcohol and spirits products post-COVID, especially over the past two years, overproduction of the Debtor’s whiskeys, leading to a build-up of unsold inventory, overcapacity after investing heavily in production capacity, hiring, and renting a large warehouse, only to have this capacity sit mostly idle, and increased cost and inflation stemming from the overall global economy.”

These issues aren’t exclusive to Westward Whiskey; they are likely industry-wide issues many producers are facing. The news of Westward Whiskey's Chapter 11 filing reflects a series of financial challenges that many whiskey producers, both large and small, face. Stoli Group, whose portfolio includes Kentucky Owl, also filed for bankruptcy protection in late 2024. In April 2025, Garrard County Distilling Co. in Lancaster, Kentucky, which built a $250 million distillery and has been operational for only 14 months, was taken over by courts and allegedly owes its bank $28 million. Brown-Forman, owner of many popular brands including Jack Daniel’s, Woodford Reserve, and Herradura Tequila, announced a 12% workforce reduction in early 2025 which included closure of its Louisville-based cooperage in an effort to reduce operating costs and re-position for future growth.

Still, Westward Whiskey, one of the first major distilleries seeking bankruptcy protection, is catching more attention than usual, as it is following numerous news reports making the case that bourbon (and American whiskey by extension) is going bust. There may be some truth to the red-hot whiskey business of the past decade showing signs of cooling.

Mooney explains that expanding production capacity was based on a range of factors, one being that the Westward brand saw record sales in 2023. Even in 2024, Westward again saw year-over-year growth. Mooney said they also have to plan for future demand based on past experience and brand trajectory, looking forward 5 to 10 years. It also wasn’t just Diageo calling the shots or vice versa. Planning was made by the board of directors, Diageo’s director, and representatives from their original company before their investment.

“We got to where we are by making what I think were reasonable decisions under different circumstances and with a different future in mind, but among those is a decision a few years ago to invest in expanding production capacity for new whiskey by 46%. We completed that project, we then put that capacity to work, and nearly doubled the output of the distillery,” Mooney says.

But anyone in production knows that hitting the brakes isn’t as easy as it seems, especially when it comes to whiskey-based production. Aging whiskey is a long game, and Westward Whiskey is looking to increase its whiskey’s median age steadily. Typically, when a company finds itself with a build-up of unsold inventory—in Westward’s case, 6,800 barrels according to its filing—it looks to sell a portion of it to non-distiller producers or other companies looking to blend or even create an American single malt brand of their own.

“Our intention through this restructuring process is for everything to be business as usual. One of the things that is interesting about Westward is [that] every drop that we've ever put in a bottle we made from scratch, and we've never sold anything to anybody else,” Mooney says. “So Westward only comes from Westward, and we've made all of it ourselves, and you know that that has served us well, and so we expect to continue. We have no offers to sell any bulk whiskey or anything like that right now.”

Westward Whiskey’s future as an independent producer will likely be very different, pushing it into new business paths. Less capital likely means less production and relying more heavily on the current aging stock.

“I think the greater challenges that have led us to the decision to seek bankruptcy protection have to do with market access and just what we believe under current market conditions is realistic for an independent producer to achieve. It means a much steadier kind of more gradual growth over the next few years,” Mooney says.

Westward Whiskey is also exploring the idea of a spirits brand having a meaningful direct-to-consumer business. Before, when they had a big company mentality, it wasn’t something the company focused much on. According to Mooney, surprisingly, a significant portion of their business is now a direct-to-consumer business, whether from their Westward Whiskey Club or people making purchases from their online store. It also helps combat retailers and distributors slimming down their inventory and getting cold feet carrying the new whiskeys from the relatively still unproven American single malt category.

“[The direct-to-consumer business model] is an enormous opportunity, and it's a largely untapped one, or we've barely started scratching the surface, because it just wasn't part of the thesis of what we were building the company for, and how we were building it,” Mooney says. “Now, all of a sudden, it's at the heart of what we're going to do moving forward. Make the most of every opportunity to engage directly with consumers, with the public, with people who love great whiskey.”

Though it's hard to call the American single malt category red hot, for many bourbon drinkers exploring the style, it is more of a sidestep, like many took when they discovered rye whiskey for the first time. As Mooney points out, Westward’s American single malts appeal to a diverse audience by blending various whiskey traditions. They attract enthusiasts from different categories, such as beer drinkers with Westward’s brewing of pale ale as part of their mashbill, scotch drinkers who are already familiar with sophisticated malts, and bourbon drinkers who are used to aging in new American oak.

Westward has seen significant success with higher proof expressions, particularly their Cast Strength release, which surged from 1% to 15% of their sales after being featured by numerous whiskey publications, including Breaking Bourbon, which we awarded one of the best single malts of 2022. The company’s Milestone release, one of the first true American single malt premium products, also garnered strong demand, selling out both releases.  

Thanks to the TTB’s approval of the American single malt classification in January 2025, consumer awareness of the style of whiskey that many may have overlooked or simply pooled together with European-based single malts may see an increase. Despite this, Mooney does not think the approval will result in an immediate increase in sales.

As Westward Whiskey continues to work through Chapter 11 and enters its post-bankruptcy, post-Diageo future, it looks to maintain what consumers love about the brand while making necessary changes to stay financially healthy and continue to grow. In essence, keep the doors open to a wide range of new ideas while maintaining the core principles that made Westward Whiskey what it is today.

“We will come out leaner financially, which is a great thing,” Mooney says. “I will say, most likely we're not going to come out smaller, because it's looking like this will be a growth year for us, despite all the twists and turns. But we'll definitely be in a place where we can do more of what has worked, and more of what has worked is engaging more directly with the public, and finding opportunities to create limited releases, and be able to bottle a barrel for someone and their friends. We really want to lean into the approachability and willingness to do interesting, innovative things.”