Please Don’t Call It a Bourbon Glut

American whiskey will be just fine. Here’s why.

Marci Palatella is the Proprietor and Founder of Preservation Distillery and Farm. 

For a while, it was once every few months. Now it seems like it’s happening every other day. Another headline declares the American whiskey industry is in serious trouble. Renowned distilleries are downshifting or pausing production altogether. Many did layoffs; others completely shuttered. The market is drowning in oversupply. Warehouses are bursting. Demand is falling. The great bourbon bubble has finally popped, and we're all going to drown in our own barrels.

I've been in this industry since the Eighties. I've heard this story before. But I’m here to tell you two simple things. One, don’t call it a bourbon glut. And two, American whiskey is going to be just fine. 

The Data Behind the “Bourbon Glut” Narrative

The current panic stems from legitimate numbers. Across Kentucky alone, more than 125 distilleries—the higher number since Prohibition’s repeal—currently have a record-setting 16.1 million aging barrels of bourbon. Major producers have publicly acknowledged they're sitting on more aged stock than anticipated, leading to American whiskey production this year to drop by 28 percent, compared to last year. Domestic sales of American whiskey fell by 1.8 percent in 2024, to $5.2 billion, per the Distilled Spirits Council.

On paper, it looks bad. In practice, it's more complicated. We’re in a bourbon market correction. 

Bourbon Supply and Demand: A Longer View

Bourbon takes time. When the demand for bourbon began outpacing the supply, about 20 years ago, existing producers had to kick things into overdrive. Substantially. And new distilleries were built. Obviously, everyone was betting on sustained growth, who bets on failure?  

Most projected accordingly. Then the pandemic drinking boom arrived in 2020, with surging sales and even more rabid demand for not just bourbon, but Kentucky bourbon. So production went into overdrive. Give the people what they want, right? And now, as a plethora of maturing barrels are ready to be bottled, the market is taking a breather. 

That's not a structural collapse. That's misaligned timing.

The Eighties and Nineties were actual hard times for bourbon and American whiskey. When I started in the Eighties, bourbon was something your grandfather drank.  It was definitely not cool. By then, the industry had contracted by more than 50 percent from its Seventies peak. Bars couldn’t pour enough vodka and white spirits, some say popularized by James Bond, and the craze around tiki bars. When I started, I think there were only six distilleries actually producing bourbon. Everyone else had stopped and were sitting on old barrels they couldn’t sell. As whiskey distilleries were consolidating and closing, we weren't worried about oversupply; we were worried about extinction.

I started in the wine industry, was successful and, as I became better known, several distributors asked me if I could help sell products they were stuck with, ones they called “brown goods.” That term included all cognac, brandy, and all whiskeys (bourbon was at the top of the list, but it included American whiskey and Scotch). What a way to minimize the category. 

Still, I knew I could move “brown goods.” I traveled the globe looking for customers for the vast overstocks piling up in America and Europe. What I had to offer were many brands that were completely unknown, or had dramatically dropped in popularity. In industry jargon, these are known as “closeouts”. Every new potential customer needed detailed explanations, education, and a lot of salesgirlship. 

But find customers, I did. And I was able to close deals, move products, and gain confidence from clients. 

As the closeout inventory trickled, the global customer base I’d built was eager for more, specifically new American whiskey labels. I found incredible liquid, and started bottling my own products. I had set my sights on Europe and Asia, finding markets that were fascinated with American culture, and a female out there selling a man’s drink. Between my global collectors, small eclectic global distributors, and a market in Japan, I designed and created my own categories, built a following selling whiskey no one else had—cask strength, older ages, non-chill or unfiltered. And because people who tried great bourbon that was made right kept coming back, my homemade brands took off and I built a business.

Why Today's Bourbon Market Is Actually Healthy

Compare that to now. American whiskey is a multi-billion dollar category with global recognition. Bourbon tourism brought almost three million visitors to Kentucky last year. Export markets that didn't exist in the Nineties now represent 20 percent of bourbon sales—or did before the tariff drama. The infrastructure, education of new generations, and bourbon’s cultural foundation we spent decades building isn't going anywhere.

What we're seeing isn't a bourbon glut, it's a bourbon market correction after unprecedented growth and overprojection by some of the smartest people in the industry. Scary, sure. But most producers will survive this. The category expanded at double-digit rates for years. Nothing grows forever at that pace, and overshooting consumption estimates didn’t occur for decades—it was a relatively small window. 

The fact that growth has slowed to very low single digits doesn't mean the sky is falling. It means we're maturing into a sustainable market.

How Preservation Distillery Navigates Supply Cycles

At Preservation, we produce whiskey in micro batches, one to three barrels of our pot distillate per batch. We've never had the option to overproduce; the whisky trickles out of our stills like a dripping faucet. Those barrels are moved to our barrel aging house, then obsessively cared for as they mature. We’re not in a hurry. I refuse to release anything until it’s ready. (Thank God we don’t have investors, no one would have let us wait more than seven years for a first release.) That approach kept us lean in boom times and it keeps us stable now.

When everyone else was working 24-hour shifts to crank out whiskey, I was stressed out fearful we were missing the moment. I’d even crafted a budget to install column stills and related equipment to ramp up production, to keep up with this massive global demand spike everyone was projecting. An engineer friend stopped by to weigh in on adding the new system. At some point I said, "I know everyone's predicting a massive boom in overseas sales, but I'm actually in those markets and I just don't see it." He looked at me and said, "If you don't see it, don't do it." Already scared, that resonated with me, and it was all I needed to hear to scrap the expansion plans. 

We’re small, but have a great assortment of vintage barrels of very good quality.  Collecting those over the years and aging them here was one of my wise moves. Barrels from distilleries, like ours, that stayed focused on quality over volume. We have strong relationships with our distributors, direct connections with our customers on a deep level, and have products that sell because they're good, not because they're hyped.

What Oversupply Really Means for Bourbon Quality

If anything, this moment is an opportunity. When the market's hot, corners get cut. Typically bourbon or American whiskey gets pushed out the door at four years and a day, if the producer is able to wait that long. Otherwise two or three years is not uncommon. Quality becomes secondary to quantity. 

A slower market rewards the distilleries that were doing it right all along. 

The places like Preservation Distillery that make Kentucky bourbon the same way since the beginning: single-batch, custom milled for each run, all ingredients fresh, unhurried aging, no shortcuts. We are a rare commodity. This is all substantially harder than running column stills at industrial scale, but our method produces the precise type of whiskey we’re aiming at: rich, bold, uncompromising on flavor. 

I've watched this industry almost die. The past decade, we’ve seen it all come roaring back. I've seen fancy brands I thought had beautiful packaging not make it, while funky brands survive and thrive. Brands that I thought were average, products the brand owner never touched but had made somewhere else and shipped to various markets, sold to large companies for shocking numbers. Some wise or lucky people made lots of money the past few years selling their whiskey companies to waiting buyers. I am happy for them, and happy we didn’t. I love what we do and can’t wait to get up every day and figure out how to get better. Wonderful people who've become dear friends have helped us along the way, and today we’ve built an amazing team. That has made all the difference.

The Industry Isn't in Crisis. It's Catching Its Breath

Trends come and go. What hasn't changed is this: if you’re making great whiskey from a place of authenticity, and have a genuine story to tell, people will find it and drink it.

Are there too many barrels aging in Kentucky right now relative to immediate demand? Probably. Will some producers struggle with inventory management? Sure. Does that mean bourbon is in crisis? Not even close. Some companies sadly didn’t make it, and there’s been an attrition rate, but it’s not an industry collapse by any means.

The big distilleries will adjust their production schedules. Some marginal players have and will exit. Life will go on. Meanwhile, the rest of us will keep doing what we've always done: making the best whiskey we know how, in the quantities we can closely manage, and control at every level. Most importantly, we make whiskey for people who really care about what's in the glass.

This is an industry with a strong consumer base, taking a production breath after a long sprint. We're not in a glut. This is the new era of bourbon and, like our barrels, we are maturing with it.  If you know anything about bourbon, that’s exactly when the good stuff happens.