Whiskey Brands Have Forgotten Their Best Customers. Now, They're Paying the Price

The whiskey industry is close to a perilous precipice, inching away from a peak and close to a contraction. Insiders dread the prospect of “glut,” an overabundance of production that leads to a collapse in value as consumers begin filling their glasses elsewhere. Niche bottles and brands are the first to feel it.

Take Ireland's Waterford Whisky. It has one of the most impressive, singular visions found anywhere in the whiskey world. By producing single farm, single varietal, and single malt whiskeys, the distillery has developed the idea of terroir in spirits while also showcasing the flavor differences and nuances found between different types of malted barley. Waterford has been lauded far and wide by the whiskey cognoscenti—this author included—as a torchbearer for the industry.

Yet Waterford's now in receivership. While founder and figurehead Mark Reynier vows to gather the funds to keep the brand alive, it's a telling shot across the bow. Whiskey geeks view the category differently than the vast majority of everyday consumers. While there are many financial pitfalls and complications to running a world-class whiskey distillery, what does it say about the state of the industry that a producer seen as one of its brightest lights may be snuffed out?

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It's not as if Waterford is the only example, either. According to former American Craft Spirits Association (ACSA) president Becky Harris, the co-founder of Virginia's Catoctin Creek distillery, about 45 craft distilleries have closed in the U.S. in the past two years. Earlier this month, Stoli Group, owner of Kentucky Owl bourbon, filed for bankruptcy protection as well.

“The whiskey is great,” says Lew Bryson, journalist and author of Whiskey Master Class, says of Waterford. “But it's so damned granular in presentation. Total transparency is an overload for most drinkers, they don't really care, understand, or care to understand.”

“A brilliant idea is one thing, execution of it in the marketplace is another,” says Robin Robinson, educator, brand consultant, and author of The Complete Whiskey Course. 

Robinson believes that whiskey, as with any fashionable consumer good, has gone through three stages over the past several decades: one, early adoption and avant-garde buzz; two, expansion and advancement; and finally three, becoming part of the national conversation. 

“We're currently in stage three, and when Mark Reynier opened Bruichladdich, he helped create stage one," Robinson says. "When he opened Waterford, we had moved to stage three but he was still in stage one.”

Allocated bottles may get all of the journalist and geek attention, but it's the Jim Beams and Jack Daniel's of the world that move bottles by the millions, after all. For Bryson, who became a believer in Waterford's ethos upon the brand's initial forays, things became muddied soon after.

“The message started to get lost, and I began to suspect that this was about creating collector buzz. 'Only so much of this, a few more of that, gotta get 'em,'” Bryson says. “I mean, it's not like it should be a surprise. Reynier created a new expression at Bruichladdich every time he turned around, why would we think this would be different?”

Despite layers of righteousness in the whiskey-sphere, the entire market exists amid an environment where much-maligned vodka is still the big dog in town. According to the most recent sales figures from the Distilled Spirits Council of the United States, vodka sales totaled 75 million cases in the U.S. in 2023, accounting for 30 percent of all spirits volume. That's more than American whiskey, Canadian whisky, Scotch whisky, and Irish whiskey combined (62.4 million cases).

While Robinson is a noted critic of the notion of spirits terroir, he makes a point that the mere notion of it proved to be more of a hindrance than a lure. 

“Instead of bringing people to it, it helped alienate them from it, and geeks don't count, because geeks only buy one bottle and then look for something new,” Robinson says. “People are intimidated by things like 'cuisine' and the language of flavors. They all feel they're inadequately equipped to understand it. So they didn't understand the marketplace, helping consumers to find it and own it.”

Waterford also suffered from the lack of a core or flagship bottling, the type of consistent, always-available label that consumers could find with ease and come to know and love. Instead, the distillery offered a continuous onslaught of new, limited releases that required a great deal of explanation to understand, let alone to create a sale.

Truth is, the average whiskey drinker is as far removed from the hoity-toity whiskey geek discourse as you'd imagine. Perhaps even further—and that's the crux of the issue. The bulk of whiskey drinkers describe their bourbon as “smooth” and douse it with Coke, and that's just as valid a consumption method as sipping a rare whiskey neat. The inability to bridge that gap—sizable as it is—may be where a brand such as Waterford lost its way.

Related: 11 Best Bourbons for an Old Fashioned, Tasted and Reviewed