Lawson Whiting's Parting Shot: Why the American Whiskey 'Doom' Narrative Gets It Wrong
There is a version of the American whiskey story being told right now in trade publications, on analyst calls, and in the back rooms of distributors across the country that goes something like this: the boom is over, the barrel rooms are full, the craft distillery bloodbath is accelerating, and the category that defined the last decade of American drinking culture is in serious trouble. Lawson Whiting, the outgoing CEO of Brown-Forman, has heard that story. He does not entirely buy it.
Speaking during a Q1 analyst briefing, Whiting played down the demise of the American whiskey category, stating that "interest is very high" despite declining sales. Coming from the chief executive of the company behind Jack Daniel's, Woodford Reserve, and Old Forester — arguably the most consequential American whiskey portfolio on the planet — those words carry real weight. But they also come wrapped in considerable nuance, and Whiting was careful not to paint an entirely rosy picture. The truth, as he laid it out, is messier and more interesting than either the doom narrative or the everything-is-fine reassurance suggests.
The Numbers Behind the Narrative
A Quarter That Told Two Stories at Once
Brown-Forman reported a 1% organic sales drop for the first quarter of its fiscal 2027 year. On its face, that is a modest decline — the kind of figure that would barely register as a blip in a healthy market cycle. But the composition of that number reveals a company navigating some genuinely difficult crosscurrents. The Louisville-based owner of Jack Daniel's, Woodford Reserve, and Old Forester reported net sales of $911 million for the first quarter of fiscal 2027, a 1% decline from the same period a year ago.
The firm's whiskey portfolio was flat organically, with the core Jack Daniel's Tennessee Whiskey also stagnant. The Jack Daniel's family of products was down by 1%, with double-digit drops for the Honey and Fire flavors. The only American whiskey brand that managed to grow was premium bourbon Old Forester, which was up by 1%. That last data point is worth sitting with. In a quarter when the flagship was flat and the flavored extensions were declining sharply, it was the old-school, no-nonsense Louisville straight bourbon that moved the needle in the right direction — however modestly.
Speaking to analysts after the publication of the results, outgoing CEO Whiting acknowledged that the company continues to face a "difficult challenge" with Tennessee whiskey in its larger markets — the US, Germany, France, and Spain. Those four markets represent a substantial portion of Brown-Forman's global revenue base, and flat-to-declining performance across all of them simultaneously is not a problem that resolves itself overnight with a marketing refresh.
The Bulk Business: A Canary That Already Sang
Perhaps the most dramatic single data point from the quarter was one that received relatively little attention from the mainstream press. Brown-Forman's bulk business — meaning its sales of used barrels and bulk whiskey to other producers — has plunged by more than $100 million to just $30 million over two years, and it was cited as one of the major contributors to the Q1 drop, alongside Tequila.
To understand why this matters, you have to understand how the barrel economy works. For years, Brown-Forman was selling its used American white oak barrels to Scotch and Irish whiskey producers at remarkable volumes and prices. Whiting told analysts that excluding the barrel sales, the firm's Q1 performance was "relatively strong" and would have been "about flat," but the demand for barrels from Scotch and Irish whiskey producers remains well below the unusually high levels experienced a couple of years ago. The peak of that business, by Whiting's own account, was staggering. Used barrel sales have fallen from more than $100 million two years ago to about $30 million, as demand from Scotch and Irish whiskey producers has remained below prior elevated levels.
The near-term outlook on this front is at least somewhat encouraging. Whiting noted: "We expect continued pressure on used barrel sales, but we expect the impact to moderate through the remainder of the year, and the year-over-year dollar impact on net sales will be significantly less." That moderation, if it materializes, would remove one of the most significant structural drags on the company's reported numbers — and make the underlying brand performance look considerably cleaner.
US Whiskey: Still the Strongest Category Standing
Tequila's Stumble Changes the Competitive Map
For the better part of a decade, the conventional wisdom in the spirits industry was that Tequila was the rising tide that would eventually swamp American whiskey's position as the country's prestige spirit of choice. That story has become considerably more complicated. Whiting noted that while Nielsen data shows 20 spirits categories in decline with only ready-to-drink (RTD) in growth, the "single strongest category is US whiskey" — and "Tequila has now fallen several points behind US whiskey," he added.
Brown-Forman's own Tequila numbers illustrate the point starkly. The main reasons for Q1's overall sales decline were declining sales of Tequila brands, including Herradura and El Jimador, whose net sales were 12% lower due to consumer resistance in the US and lower pricing. Net sales of the Herradura brand were down 18% on an organic basis due to lower US volumes and "net pricing" in Mexico, while organic net sales of El Jimador were also down in the US by 11% due to "lower net pricing" in the market. Against that backdrop, American whiskey's relative steadiness looks less like stagnation and more like resilience.
Whiting acknowledged that "some sell-side folks and a lot of trade people" are simply "less enthusiastic about the category," but he insisted there are cost challenges everyone is dealing with, and that "consumer demand is still there." The distinction he was drawing is an important one: the industry's enthusiasm problem is not the same thing as consumers' enthusiasm problem. Trade channels, distributor networks, and Wall Street analysts all have their own incentives to amplify negative signals. The guy actually walking into a store or sitting down at a bar, according to Whiting, is still reaching for American whiskey.
Distillery Tourism and the Premium Floor
One of Whiting's most concrete pieces of evidence for continued consumer engagement was the performance of Brown-Forman's distillery experiences. Whiting noted that Brown-Forman was still seeing "huge demand" around "super" and "ultra-premium tastings" at its distilleries. This is a meaningful signal. Distillery tourism is discretionary spending by definition — people who drive to Lynchburg or Louisville, pay for a tasting experience, and walk out with bottles they could have bought more cheaply at a retailer are expressing a form of brand loyalty that no amount of market-share data can fully capture. When that pipeline of enthusiastic, experience-driven consumers remains robust, it suggests the category's long-term health is better than the short-term volume numbers imply.
Woodford Reserve: The Global Bet
During the latest quarter, Woodford Reserve was flat in organic sales, following 4% full-year growth for fiscal 2026. Flat is not what anyone building a global premium bourbon brand wants to report, but Whiting's framing around Woodford was notably different from his framing around Jack Daniel's Tennessee Whiskey. Rather than diagnosing a problem, he was sketching an opportunity.
Whiting noted that there are "real opportunities" outside of the US for Woodford Reserve, and confirmed there are no plans to bring its price down. That pricing discipline is significant. In a market where some brands are quietly discounting to maintain volume, a refusal to cut prices is a bet on brand equity over short-term sales — the kind of bet that can look foolish in a downturn and prescient in a recovery.
Whiting said Woodford Reserve is "not one that I worry a whole lot about," adding: "We would love it to grow a little faster than it is right now, but it's still a very healthy brand and doing well." Echoing comments made earlier in the year, Woodford Reserve is seen as the company's "next big opportunity" on a global scale. The strategic logic here parallels what Jack Daniel's accomplished in the international market over the past four decades — building patient, sustained awareness in export markets until the brand became synonymous with American whiskey itself.
The Craft Distillery Shakeout: A History Lesson in Real Time
From 4,000 Distilleries to 2,000
One of the most striking aspects of Whiting's public commentary over the past year has been his willingness to speak frankly about the carnage happening at the smaller end of the American whiskey industry. When asked about the growth of the US whiskey category over the next five years, Whiting highlighted how the sector had previously been in decline for four decades from 1970 until around 2010. That historical frame is crucial context that often gets lost in the current hand-wringing.
The craft boom that followed the category's revival around 2010 was extraordinary by any measure — and, it turns out, ultimately unsustainable at the scale it reached. There were 4,000 distilleries across the US at the peak of the craft boom, but since the start of 2025 that number had dropped to 3,000. "A third of those went bankrupt last year," Whiting cautioned. "Now we're down to 2,000. So half of them have gone away already and it is a real struggle." He warned that whiskey brands are "going out of business faster than anything right now."
For bourbon enthusiasts, this consolidation carries mixed implications. On the one hand, many small craft operations that flourished in the mid-2010s were selling mediocre young whiskey at premium prices, and their exits will not be mourned by serious drinkers. On the other hand, a handful of genuinely interesting small distilleries have been casualties of a brutal market environment, and that represents a real loss for the category's diversity and innovation.
The Oversupply Problem Nobody Wants to Talk About
When analysts asked during the earnings call about where the industry stood in working down excess whiskey supply and how much of a dent had been made in aging stocks, Whiting noted that new barrel fills were down 30% in calendar 2025 and expects similar or greater reductions this year. That is a massive cut in production — the kind of adjustment that takes years to fully work through a system where the product itself ages for years before it hits a bottle.
The bourbon industry may be facing an oversupply problem that is structural rather than cyclical, a consequence of producers ramping up capacity during the pandemic-era boom and then finding themselves holding barrels that the post-boom market cannot absorb at the prices they anticipated. There is quite a mountain of inventory to work through — and some regret that Brown-Forman was quite so bullish in pushing production hard before the Covid bubble burst. As recently as 2024, the company was still aiming to double the size of its American whiskey business by 2032. That ambition, in retrospect, required an enormous volume of new distillate — distillate that is now aging in warehouses across Kentucky and Tennessee waiting for a market that has temporarily retreated.
The Macro Headwinds: Drinking Less, Spending Carefully
American whiskey's current difficulties cannot be understood in isolation from broader changes in American drinking behavior. A recent Gallup survey found that only 54% of American adults report drinking alcohol, down from 67% in 2022 — the lowest level of drinking participation in nearly ninety years. That is not a rounding error or a blip. That is a generational shift in behavior, and it touches every spirits category simultaneously.
Industry data also shows declining consumption intensity, with average drinks per week among younger adults falling from about 5.2 to 3.6 over the past two decades. The challenge this poses for Brown-Forman and its peers is not simply one of competition for a fixed pool of drinkers — it is one of a pool that is actively shrinking. Brown-Forman itself warned in a statement that it anticipates "the operating environment for fiscal 2027 to remain challenging, as macroeconomic pressures and geopolitical instability continue to negatively impact consumer behaviour and beverage alcohol consumption, particularly within developed markets."
Tariffs have added another layer of complexity. Exports fell approximately 9% in 2025 as trade tensions and tariffs disrupted key markets. For a company like Brown-Forman, which sells its brands in more than 170 countries and relies on international markets for a significant portion of Jack Daniel's volume, disruptions in export flows are not a minor inconvenience — they represent meaningful lost revenue in the near term and potential long-term damage to brand positioning in markets where American whiskey is still establishing itself.
RTDs: The Growth Engine Nobody Expected to Matter This Much
If there is one area of unambiguous bright news in Brown-Forman's recent results, it is the ready-to-drink category. Net sales for the RTD portfolio increased 11% on a reported basis, up 7% organically. Sales for the overall whiskey portfolio, including Jack Daniel's and Woodford Reserve, were flat, but net sales for the ready-to-drink portfolio rose by 20% compared with the first quarter of 2025.
Brown-Forman's whiskey sales were essentially flat during the quarter as continued international expansion of Jack Daniel's Tennessee Blackberry helped offset declines in Jack Daniel's Tennessee Honey and Gentleman Jack. The Tennessee Blackberry launch represents a deliberate strategy of taking the Jack Daniel's equity and attaching it to formats and flavors that reach consumers who might not otherwise pick up a standard bottle. CFO Jim Peters noted that the Jack Daniel's Tennessee Blackberry and Lemonade RTD is "just another example of how we can take a brand or a product like a flavored whiskey and then move it into the RTD space," adding that the company is looking at different formats and different markets as part of its innovation strategy.
The strategic question — and it is one Whiting himself acknowledged — is whether innovation in RTDs and flavored expressions can generate enough new drinkers and new occasions to offset softening demand for traditional brown spirits. For Brown-Forman and potentially the broader American whiskey business, the next question is whether innovation can generate enough new consumers and drinking occasions to offset softer demand for traditional spirits. The first quarter doesn't provide a definitive answer, but with whiskey holding steady and RTDs growing at double-digit rates, it offers a clear indication of where Brown-Forman sees some of its best opportunities.
A CEO's Exit, a Company's Crossroads
Whiting's Departure and the Succession Question
Brown-Forman Corporation announced that president and chief executive Lawson Whiting will retire from his role, effective upon the appointment of a successor. The Louisville-based drinks group said its board has begun a search for his replacement, initiating the process to consider both internal and external candidates, a search to be led by the Corporate Governance and Nominating Committee, chaired by Tracy Skeans. Whiting has spent nearly 30 years at the company and will remain available in an advisory capacity for a period following the appointment of a successor.
His departure comes at a moment of unusual turbulence — not just for Brown-Forman, but for the entire American spirits industry. Brown-Forman's shares were trading at around $47 when he was appointed, peaking at close to $80 at the height of pandemic demand; when Whiting's departure was announced, they were worth $26.25. That decline reflects both the post-pandemic hangover in the spirits sector and the specific strategic challenges Brown-Forman has navigated — or not navigated — during his tenure.
Shareholders have felt the pain acutely. The numbers did little to pacify shareholders who have seen the value of their holdings fall by 60% over the past five years, or dissident Brown family members who have openly criticized the board for pulling out of merger negotiations with Pernod Ricard and twice rebuffing a $15 billion takeover offer from Sazerac.
The Sazerac and Pernod Ricard Subplots
The corporate drama swirling around Brown-Forman is inseparable from the state of the American whiskey market itself. Sazerac's $32-per-share cash takeover offer valued the company at about $15 billion, but a collection of Brown family members representing the majority of Brown-Forman Class A shares concluded that Sazerac's proposal did not align with their vision for Brown-Forman's future and was "not actionable." Brown-Forman has steered away from both a merger with Pernod Ricard and the $15 billion acquisition by Sazerac, opting to continue to forge its own path amid the difficult conditions. The decision to remain independent carries enormous implications for the future shape of the American whiskey industry. Had either deal gone through, the portfolio configurations, distribution networks, and strategic priorities of the combined entities would have reshaped competitive dynamics for years.
What Bourbon Drinkers Should Actually Take Away from All This
For the consumer standing in front of a bourbon shelf — or doing his homework before a distillery trip — the wall of financial data and executive commentary ultimately comes down to a few practical realities. First, prices are not collapsing. The pricing environment has remained pretty rational in the United States right now, according to Whiting, which means the discounting that some observers predicted would ripple through the premium tier has been, so far, orderly rather than chaotic. Woodford Reserve, in particular, is holding its price point with no plans to soften it.
Second, the craft distillery shakeout, while painful, is ultimately clarifying. The brands that survive this period will do so because they have genuine liquid quality, authentic stories, or established consumer loyalty — not simply because they arrived at the right moment in the boom. That is, on balance, good news for the drinker who actually cares what is in his glass.
Third, the category's relative position in the broader spirits landscape is better than the noise suggests. Nielsen data shows 20 categories in decline with only RTD in growth, and the "single strongest category is US whiskey." In a down market for spirits broadly, being the least-declining significant category is not a triumph, but it is not nothing either. American whiskey is losing ground more slowly than Tequila, more slowly than wine, and more slowly than most of the alternative spirits categories that were supposed to eat its lunch.
When Whiting was asked about the growth of the US whiskey category over the next five years, he highlighted how the sector had previously been in decline for four decades from 1970 until around 2010, and noted that Jack Daniel's was one of a handful of brands to buck that decline — "by far the most successful over that 40-year period, both in the US and internationally" — before everything "started to get really hot in 2010." The point of that history lesson is that the category has survived long cycles of contraction before and come out the other side with its cultural identity intact. A generation of drinkers who came of age during the bourbon boom will not simply abandon the habit because the retail shelf has gotten less exciting for a few years.
Whiting's observation that Brown-Forman was still seeing "huge demand" around "super" and "ultra-premium tastings" at its distilleries points to a truth that the volume data obscures: the American whiskey drinker's relationship with the category is emotional and experiential, not purely transactional. That is a form of consumer loyalty that takes years to build and, historically, even longer to erode. For all the difficulty in the numbers, that is the thing Lawson Whiting is betting on as he prepares to hand off the keys — and it is, arguably, the most important variable of all.
