The Bourbon Market Is Tanking. So Why Did the Maker of Evan Williams and Elijah Craig Just Spend $200 Million?

Heaven Hill is doubling down on bourbon despite falling exports, rising costs, and a softening market.

BY AMAYA NICHOLE, NEWS WRITER

Photo: Courtesy Heaven Hill

The bourbon market has cooled, exports are down, and distillery after distillery is closing or filing for bankruptcy. So why the heck did Heaven Hill—maker of Evan Williams, Elijah Craig, and Larceny—just open a $200 million distillery while also scaling back production?

The industry is under considerable strain. According to U.S. census data, last year Kentucky whiskey exports fell 15 percent. That is on top of a previous 26 percent drop dating to the president’s tariffs in ⁠2018, after which overseas demand never fully recovered.

Liquor consumption has also been falling from steep pandemic-era highs, as the cost of living soars and some younger consumers ‌drink less. Tariffs and inflation have pushed up input costs and punctured bubbling demand overseas. 

The trouble doesn’t stop there, as there has been a slew of other problems in the whiskey industry: Uncle Nearest battles its receivership, Kentucky Owl owner Stoli is under trustee control, Garrard County Distilling sells its multimillion-dollar debt to Sazerac, Luca Mariano files for bankruptcy, and Bardstown Bourbon Company faces a gender discrimination lawsuit.

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Given these circumstances, Heaven Hill’s move appears counterintuitive. Located in Bardstown, Kentucky, Heaven Hill Springs is complete with a 60-foot copper still. It’s capable of producing more than 33,000 gallons of spirit per day and has an in-house live yeast propagation system.

The bourbon industry supports nearly 24,000 jobs across Kentucky, which produces about 95 percent of the world’s supply, with nearly a third of those roles tied directly to distilleries and the rest spread across suppliers and service providers.

So what’s their thinking? For one, Heaven Hill told Reuters that while other players have been impacted by the global trade uncertainty, just 10 percent of its revenue comes from exports, suggesting the company is largely insulated from the tariff impact.

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