#AWA President Michael Bilello explains the state of the American whiskey industry and what the mass media is getting wrong The U.S. whiskey industry is facing significant headwinds. For the first time in more than a decade, consumer demand has declined slightly, and tariffs have roiled the export market. The industry has been buffeted by an avalanche of negative news stories heralding its impending demise, driven by declining demand, shifting consumer tastes among young people and excessive inventories. Journalists have been quick to highlight production suspensions at major producers, touting a significant inventory imbalance as evidence of deep-seated industry problems.
The reality is invariably more nuanced and complicated than mass-media exposés or 30-second TikTok commentaries suggest. For some clarity, I recently sat down with Michael Bilello, the president of the newly formed American Whiskey Association, to take the pulse of the American whiskey industry.
JM: According to the Kentucky Distillers’ Association, approximately 16 million barrels are aging in Kentucky. Kentucky allegedly accounts for 85%-90% of American whiskey production, suggesting roughly 18 million barrels nationwide. Is that accurate?
MB: I’ve spoken with a wide range of industry stakeholders, and I haven't found a single, definitive, nationwide figure for how many American whiskey barrels are aging outside Kentucky. There are credible Kentucky-specific data points, but once you move beyond Kentucky, the data becomes fragmented across producers, states, and categories, and it’s not tracked in a consistent, apples-to-apples way.
Kentucky is the home of bourbon whiskey and the heart of the American whiskey industry, but it doesn’t capture the entire American whiskey picture. According to the Kentucky Distillers’ Association (KDA), approximately 16 million barrels are aging in Kentucky today.¹ Kentucky historically accounts for roughly 85–95% of global bourbon production.¹
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However, American whiskey production extends well beyond Kentucky. Large brands like Jack Daniel’s (Tennessee whiskey), producers like MGP (Indiana), and more than 2,700 craft distilleries operating across all 50 states are integral parts of the industry.²
That gap is actually part of why the American Whiskey Association was created — to provide clearer, category-wide intelligence and a fuller picture of the American whiskey supply chain, not just one geography or one segment of the industry.
This is also why AWA is commissioning the first-of-its-kind American whiskey socioeconomic impact report. The goal is to produce credible, defensible national data points that capture the full industry footprint—from grain to glass—covering production and supply chain impacts, jobs, and the broader economic value American whiskey generates across agriculture, manufacturing, cooperage, hospitality, tourism, and exports.
JM: Some estimates place depletion around 2 million barrels per year based on 23 nine-liter cases per barrel and 30 million cases sold. Other estimates are closer to 4 million barrels or 60 million cases. Are those figures reliable?
Michael Bilello, President American Whiskey Association
Michael Bilello, President American Whiskey Association
Photo, courtesy American WHiskey Association/Michael Bilello
MB: According to industry data, the global market for American whiskey is approximately 60–62 million 9-liter cases annually, not 30 million.³ That alone materially changes the math.
In addition, barrel yield varies significantly based on entry proof, bottling proof, angel’s share loss, maturation length, and product mix. The “23 cases per barrel” shorthand is a rough estimate, not a fixed rule.
Back-of-the-napkin math might generate headlines, but it doesn’t reflect how this business works in practice. This is a complex industry with peaks and valleys in consumption. As you can imagine, it is virtually impossible to perfectly project what demand will be in four, seven, ten, or even twenty years.
Our companies do their best to adjust production forecasts — something distillers have been refining for more than 200 years. The fact that forecasting isn’t perfect doesn’t validate 24-hour news cycle narratives about tariffs, health trends, or economic cycles.
Take Buffalo Trace as an example: if the average age of its flagship products is around seven years, the distillery must have roughly seven years’ worth of projected sales currently aging in barrels. Every distillery runs that equation differently.
And on the “production halt” narrative — consider Beam Suntory’s operational adjustments in Kentucky. Shifting production between facilities while upgrading long-running capacity is disciplined asset management, not distress.⁴ That doesn’t generate dramatic headlines, but it reflects long-cycle capital planning in an aged category.
JM: How significant is the Canadian market to American distillers?
MB: Canada represents roughly 1% of the total export value of American whiskey.⁵ While relatively small in percentage terms, Canada remains an important and historically strong trading partner for American distillers. Americans enjoy Canadian whisky. Canadians enjoy American whiskey. It’s a close trading relationship. When politics disrupt trade flows, consumers and producers on both sides of the border feel the impact.
JM: How significant is the India trade agreement? What impact could it have on inventory?
MB: India is the largest whiskey market in the world by volume.⁶ By 2047 — the centennial of India’s independence — India’s middle class is projected to exceed one billion people.⁷ That’s scale. That’s generational demand. India represents a major long-term premium growth opportunity.
In 2023, India reduced its tariff on U.S. bourbon from 150% to 100%, but that rate remains high relative to other global markets.⁸ With the right tariff structure and improved market access, American whiskey can compete on a level playing field.
A durable India trade agreement reduces tariff and non-tariff barriers and creates sustained competitive access for decades. At AWA, we’re focused on market access for the long term — not today’s inventory headline.
Frankfort, Clermont, Jim Beam American Outpost
Clermont, Kentucky, United States - July 19, 2025: The visitors building is part of the Jim Beam American Outpost, the location of the James B. Beam Distilling Company, the best selling Bourbon in the world.
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JM: How widespread are production pauses? What’s happening with production in the U.S.?
MB: Responsible production management is standard practice in the whiskey category. This is a feature of disciplined management — not a crisis signal. Forecasting next year’s whiskey demand is challenging. Forecasting ten or twenty years out is exponentially harder.
No one in the history of American distilling has perfectly forecast long-term demand. It’s not possible in a product category that requires years of aging. So what do you do? You adjust. You slow down production temporarily. You let barrels age longer. You experiment and innovate. You protect brand integrity.
Most importantly, you open new markets for American whiskey, which is exactly what we’re focused on doing every day. That’s how mature industries manage long-cycle products.
JM: How long will it take to bring inventories in line with demand? What does that mean for consumers?
MB: It depends on the distillery and brand-by-brand strategy. Some producers can adjust relatively quickly. Others may take longer. Some have long inventories; others do not. Overall, this is likely a multi-year normalization process — and that is not unusual in a premium aged category.
Consumers should not expect disruption. If anything, they may benefit: more innovation, more premium expressions, and potentially older age statements as barrels remain in warehouses longer.
Elevated aging inventory is not a crisis. It’s part of managing a product that takes years, sometimes decades, to make. The real story isn’t “too much whiskey.” It’s an industry managing long cycles responsibly while positioning itself for the next global growth phase.
As we approach the 250th anniversary of American independence and celebrate the deep historical roots of American whiskey, our members are thinking in generations, not quarters.
From where I sit, the long-term foundation for American whiskey remains strong.
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Citations
1. Kentucky Distillers’ Association (KDA), 2023–2024 data on barrels aging in Kentucky and share of bourbon production.
2. American Craft Spirits Association (ACSA), 2023 Craft Spirits Data Project; U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) permitting data (2,700+ active craft distilleries across all 50 states).
3. IWSR Drinks Market Analysis, 2023–2024 data on global American whiskey volumes (~60–62 million 9L cases).
4. Beam Suntory public reporting and Kentucky facility modernization announcements (2023–2024).
5. Distilled Spirits Council of the United States (DISCUS), U.S. Spirits Export Report 2023–2024 (Canada share of U.S. spirits exports).
6. IWSR Drinks Market Analysis, India whiskey volume data.
7. World Economic Forum and Government of India long-term middle-class growth projections (2047 outlook).
8. Office of the United States Trade Representative (USTR), 2023 U.S.–India tariff reduction agreement on bourbon (reduction from 150% to 100%).
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Joseph V Micallef
ByJoseph V MicallefJoseph V. Micallef is a journalist covering food, wine, spirits, and travel. He is also a historian, best-selling author, keynote speaker, and syndicated columnist. He has been a Forbes Contributor since 2017. Joe has written extensively on wines and spirits and judged many of the leading international wines and spirits competitions. In his spare time, he makes wine in Oregon. He holds the Wines and Spirits Diploma from the WSET and is an original member of the Advisory Board of the Council of Whiskey Masters. In 2023, the Academia Mexicana de Catadores de Tequila, Vino y Mezcal A.C. awarded him the honorific of Maestro Tequilero. Among his recent books is Scotch Whisky: Its History, Production and Appreciation.