Bourbon and Beer Maker Files Chapter 7 Bankruptcy

Craft brewery bankruptcies are piling up in 2025 and 2026, and the reasons go deeper than a tough economy. Higher raw material costs, climbing rent and labor bills, and a simple, stubborn shift in habits are all hitting at once: Americans are drinking less, and the industry is feeling every bit of it.

At a Glance

• Craft beer production fell 5.1% in 2025, with a 2.9% contraction in the number of U.S. breweries, per the Brewers Association.
• Total beverage alcohol volumes dropped 5% in 2025, with beer down 5%, wine off 6% and spirits down 4%.
• Goodwood Brewing & Spirits filed for Chapter 7 bankruptcy on June 22 after closing its taprooms and racking up millions in alleged debt.
• The share of U.S. adults who say they drink fell to 54%, a record low in Gallup's nearly 90-year survey.

The headline number that should worry brewery owners isn't about beer at all. It's that fewer people are picking up a glass in the first place. Gallup, which has tracked American drinking since 1939, found that just 54% of adults now say they consume alcohol, the lowest figure on record by a single percentage point. For the first time, a majority of Americans also believe moderate drinking is bad for your health. Those findings come from Gallup's annual Consumption Habits survey, conducted July 7-21.

Why the numbers are sliding

Industry data shows total beverage alcohol volumes shrank 5% in 2025 as financial strain reshaped how people spend. Beer slipped 5%, wine 6%, spirits 4%. The lone bright spot was ready-to-drink beverages, down only 1% and steadily grabbing market share. That tells you something: people aren't necessarily quitting, they're switching.

Cost is the single biggest driver behind the pullback. According to IWSR Bevtrac consumer research, 31% of U.S. drinkers say money is the reason they're cutting back. And they're being picky about it.

"Consumers are becoming more selective about where they allocate their alcohol spending, increasingly evaluating purchases based on their own price-to-quality ratio," said Marten Lodewijks, managing director at IWSR. "Rather than broadly trading down, drinkers are choosing to pay more only when a product clearly justifies its price."

Translation for a small brewery: customers will still splurge, but only when you give them a reason to. That's a hard standard to meet when your costs are rising faster than what you can charge.

Dominick Miserandino, CEO of RTMNexus, doesn't pin the closures on any single cause. "I think it's a combination of all of the above," he told TheStreet. "Americans have switched from brewery to the likes of White Claw and other lighter drinks as well as watching the budget. You're not gonna try specialty things."

Goodwood Brewing's collapse

Goodwood Brewing & Spirits is the cautionary tale here. The company filed for Chapter 7 on June 22, according to court filings, but the trouble started long before that. It had already shut all of its taprooms while fighting a stack of lawsuits and carrying what's alleged to be millions in debt.

The Owensboro restaurant and taproom at 101 Frederica St. closed on April 26 — one day before a Daviess Circuit Court judge handed down a nearly $100,000 default judgment against the owners over unpaid rent. Judge David Payne awarded landlord Entertainment at the Enclave $99,604.96, plus court and attorney fees, after the landlord said more than $120,000 in rent had gone unpaid going back to November.

That was just one front. Earlier in the spring, reports surfaced that Goodwood was in the middle of an ownership transition while facing multiple suits alleging nonpayment of rent, services and taxes. The company owes the IRS more than $400,000 in back taxes. And at its Whiskey Row location, a March 6 lawsuit in Jefferson Circuit Court claims it owes roughly $225,000 in unpaid rent for January, February and March, plus unpaid property taxes.

Under Chapter 7, a trustee typically steps in to sell off assets and pay creditors according to bankruptcy law. So far, no details on Goodwood's debts, assets or creditors have been made public. Its website is down, and its Facebook page hasn't been touched since March.

A wave of closures across the country

Goodwood is far from alone. Breweries in several states have folded or filed in recent months, each with its own version of the same story.

3rd Level Brewing, a young Texas operation, filed for Chapter 7 in April, citing financial distress and industry headwinds. Owner Clint Bradley sounded defiant at the time. "We'll see how this plays out," he said. "We're going to operate as normal until someone tells me I have to stop operating." Local reports and Yelp both now confirm the brewery has closed.

In February, Baltimore's The Brewer's Art shut down suddenly and filed for Chapter 7 to liquidate. The parent company, Old Line Brewers LLC, filed in the U.S. Bankruptcy Court for the District of Maryland on Feb. 13, listing $100,000 to $1 million in assets against $1 million to $10 million in liabilities.

That same month, Magic City Brewing Co., a heavy-metal-themed brand out of Akron, Ohio, filed for Chapter 7 after closing its brewery and two taprooms. It shuttered the taproom at 1662 Merriman Road before Feb. 3, then announced the flagship brewery and taproom at 2727 Manchester Road would close Feb. 14.

Frequently Asked Questions

Why are so many craft breweries closing?

It's a mix of rising costs for materials, rent and labor, plus falling demand as Americans drink less. Cost is the top reason people cite for cutting back, and many are shifting to cheaper, lighter drinks like ready-to-drink seltzers.

How much did craft beer production fall in 2025?

Production dropped 5.1% in 2025, and the number of U.S. breweries contracted 2.9%, according to Brewers Association data.

What does a Chapter 7 bankruptcy mean for these breweries?

Chapter 7 is a liquidation. A trustee is appointed to sell off the company's assets and distribute the proceeds to creditors under bankruptcy law, which generally means the business stops operating.

Are any alcohol categories still growing?

Ready-to-drink beverages were the standout in 2025, down just 1% while beer, wine and spirits all fell more sharply, meaning RTDs continued to gain market share.

What comes next for craft brewers

The pressure isn't easing. With drinking rates at a historic low and shoppers demanding clear value for every dollar, breweries that can't justify their prices are the most exposed. The survivors will likely be the ones that read the room — leaner operations, sharper offerings, and maybe a foot in the RTD market that's still managing to grow while everything else shrinks.