Westward Whiskey Files for Chapter 11 Bankruptcy Amid Financial Struggles Citing “Significant Liquidity Challenges”. (NOTE: Post updated with statement from CEO Thomas Mooney below)
It’s a sad day as we bring you the news that Westward Whiskey, one of our favorite American Single Malt producers, has filed for Chapter 11 bankruptcy protection. This is a tough moment for both the brand and whiskey enthusiasts alike, as Westward has been a pioneer in the American Whiskey scene since 2004. As they navigate these financial challenges, it’s more important than ever for whiskey lovers to show support for craft distillers like Westward, who continue to produce exceptional spirits. Now, more than ever, the great brands of American Whiskey need our help. Bourbon Lens is committed to continuing to spread the word about the remarkable people and products that define the whiskey industry.
A STATEMENT FROM THOMAS MOONEY, FOUNDER & CEO, WESTWARD WHISKEY:
Earlier this week, Westward Whiskey filed for Chapter 11 (Subchapter V) bankruptcy protection, a mechanism designed to allow small businesses to restructure for success in the future. Though consumer interest in Westward grew last year, this is a necessary step as we explore financial and strategic alternatives to better position our company to thrive as an independent craft distiller. Throughout this restructuring process, we will continue to operate as usual and bring our world-class whiskeys to our growing consumer base.
The need for this restructuring process is driven by numerous challenges that have put a significant strain on our business: a decline in demand for bottled spirits in general; the rising cost of goods and services due to inflation that will only accelerate with tariffs; market access constraints that make it difficult for independent craft spirits producers to reach consumers; large obligations that we entered into, at a different time and under different circumstances; and significant investment toward increasing production and inventory.
We have chosen to embark on this process because we are confident that Westward has a bright future, and restructuring will position us to compete and win in the marketplace as it exists today, not as it was in the past.
The Spirits Business has reported that Westward Whiskey, the Oregon-based American Single Malt brand, has filed for Chapter 11 bankruptcy protection to restructure its operations. The move comes after the company, founded in 2004, faced “significant liquidity challenges” amid declining consumer demand and inflationary pressures. In a voluntary petition filed under Subchapter V of the U.S. Bankruptcy Code, Thomas Mooney, founder and CEO of House Spirits Distillery (which operates as Westward Whiskey), seeks to reorganize the company and address its financial difficulties.
Challenges Leading to Bankruptcy Filing
Westward Whiskey’s bankruptcy filing highlights several key factors that have strained the company’s finances. These include a post-Covid decline in demand for alcohol and spirits products, overproduction that led to unsold inventory, and increased costs due to inflation. The brand’s decision to expand production and warehouse capacity, along with hiring more staff, ultimately left them with excess capacity that remained largely idle. Despite efforts to cut costs, including reducing monthly expenses from over $1 million to less than $300,000, the company’s situation remained untenable. The brand also struggled with restrictions on external financing, which were only recently lifted, allowing Westward to explore new financial options.
Reorganization Plans and Future Outlook
Through the Chapter 11 process, Westward aims to restructure its business, reduce obligations, and protect jobs. The company intends to file a reorganization plan in the coming months to continue operations and maintain its independence as a craft distiller. Mooney expressed confidence in the brand’s future, stating, “This is a necessary step as we explore financial and strategic alternatives to better position our company to thrive as an independent craft distiller.” Despite the financial hurdles, Westward remains optimistic about its prospects and intends to capitalize on the growing ultra-premium whiskey category, which has seen an uptick in demand.
Westward’s Market Position and Growth Potential
As of the filing, Westward’s production capacity stands at approximately 50,000 nine-litre cases, with a current inventory of over 6,800 barrels. The company projects significant growth, with a compound annual growth rate (CAGR) of more than 60% over the next five years. Westward has focused its efforts on key U.S. markets such as Oregon and California, as well as international markets like Australia and Taiwan. The brand is seeing growth in California, outperforming the overall market for ultra-premium American whiskey. Going forward, Westward aims to become the most celebrated luxury American whiskey and break into the top 10 American whiskeys priced above $75 per bottle.
If you need more information on Westward Whiskey and their amazing spirits, check out some of our previous posts and podcast featuring the brand:
- 155: Westward Whiskey: Brewing and Distilling American Single Malt
- Westward Whiskey Club 2023 Release, Two Malts Rye: Reviewed
- Westward Whiskey Unveils Milestone, Limited-Edition Luxury Single Malt
- Westward Celebrates 20 Years with Launch of New Milestone® Edition No. 2
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