Bourbon and beer maker files Chapter 7

Craft beer bankruptcies are mounting fast, and the numbers behind them are brutal. American craft beer production fell 5.1% in 2025 and the number of U.S. breweries shrank by 2.9%, according to figures from the Brewers Association. The reason isn't just inflation. Americans are simply drinking less.

At a Glance

• Total beverage alcohol volumes in the U.S. dropped 5% in 2025, with beer, wine and spirits all in decline.
• Goodwood Brewing & Spirits filed for Chapter 7 bankruptcy on June 22, 2026, owing the IRS more than $400,000 and facing multiple rent lawsuits.
• The share of U.S. adults who say they drink alcohol has fallen to 54%, the lowest in Gallup's nearly 90-year record.
• Cost is now the top reason drinkers cite for cutting back, named by 31% of U.S. consumers.
• Ready-to-drink beverages held up best, slipping only 1% as they keep grabbing market share.

The pressures crushing small brewers

Run a brewery or distillery right now and the math rarely works. Raw materials cost more. So does labor. So does rent. Layer a cautious consumer on top, and the margins that once kept a neighborhood taproom afloat have quietly evaporated. The result is a wave of closures across the country.

Industry research paints a clear picture of where spending went. U.S. total beverage alcohol volumes contracted 5% in 2025 as economic strain reshaped how people drink, according to preliminary data from IWSR's US Navigator. Beer fell 5%, wine dropped 6%, and spirits slid 4%. The one bright spot was ready-to-drink products, which dipped just 1% and kept pulling share from traditional categories.

Drinkers haven't abandoned alcohol entirely so much as gotten picky. "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 trading down across the board, he noted, people are willing to spend up only when a product earns it.

A generation is drinking less

Then there's the bigger cultural shift. Plenty of Americans have just stopped drinking. The percentage of U.S. adults who say they consume alcohol has dropped to 54%, a single point below the prior low and the smallest figure in Gallup's tracking since 1939. For the first time, a majority of Americans now believe moderate drinking is bad for your health.

That view emerged in Gallup's annual Consumption Habits survey, conducted July 7-21. Gallup has measured drinking behavior for more than 80 years and attitudes toward the health effects of moderate consumption since 2001. The combination of higher prices and shifting health beliefs has formed a squeeze that even well-run brewers struggle to escape.

Inside Goodwood Brewing's collapse

Goodwood Brewing & Spirits offers a case study in how quickly things can unravel. The Kentucky company filed for Chapter 7 on June 22, according to court filings on PacerMonitor, not long after shutting all of its taprooms. By then it was tangled in a string of lawsuits and millions in alleged debt.

The closures came in waves. Goodwood shut its Owensboro restaurant and taproom at 101 Frederica St. on April 26, one day before a Daviess Circuit Court judge issued a nearly $100,000 default judgment against its owners over unpaid rent, Louisville Business First reported. 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 since November.

Earlier in the spring, the company was reportedly going through an ownership transition while fending off suits over unpaid rent, services and taxes. It also owes the IRS upward of $400,000 in back taxes, per the Lexington Herald-Leader. At its Whiskey Row location, a landlord sued in Jefferson Circuit Court on March 6, claiming Goodwood owed roughly $225,000 in rent for January through March plus unpaid property taxes.

Under Chapter 7, a trustee typically steps in to liquidate assets and pay creditors as bankruptcy law dictates. So far, no public breakdown of Goodwood's debts, assets or creditors has surfaced. The company's website is gone, and its Facebook page hasn't been touched since March.

Not an isolated case

Goodwood is one of several brewers that have gone under recently. The pattern stretches across regions and styles.

3rd Level Brewing, a young Texas operation, filed Chapter 7 in April and pointed to financial distress and industry headwinds. Owner Clint Bradley initially vowed to keep the doors open. "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 now confirm the brewery has shut down.

Baltimore's The Brewer's Art, operating as Old Line Brewers LLC, filed in the U.S. Bankruptcy Court for the District of Maryland on Feb. 13 after abruptly closing. Its petition listed $100,000 to $1 million in assets against $1 million to $10 million in liabilities. That same month, heavy-metal-themed Magic City Brewing Co. closed its flagship brewery and two taprooms in Akron, Ohio. It shut the Merriman Road taproom before Feb. 3 and the Manchester Road brewery on Feb. 14, the Akron Beacon Journal reported.

For RTMNexus CEO Dominick Miserandino, no single factor explains the carnage. "I think it's a combination of all of the above," he said. "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."

Frequently Asked Questions

Why are so many craft breweries going bankrupt?

A mix of forces is at work: rising costs for raw materials, labor and rent, a more cautious consumer, and a broad decline in alcohol consumption. Many drinkers have shifted to cheaper or lighter options like ready-to-drink beverages.

How much did U.S. alcohol consumption drop in 2025?

Total beverage alcohol volumes fell 5% in 2025, according to IWSR. Beer dropped 5%, wine 6% and spirits 4%, while ready-to-drink products declined only 1%.

What does Chapter 7 bankruptcy mean for a brewery?

Chapter 7 is a liquidation filing. A trustee is appointed to sell off the company's assets and distribute the proceeds to creditors under bankruptcy law, rather than restructuring the business to keep it running.

Are Americans really drinking less?

Yes. Gallup found that 54% of U.S. adults now say they drink, the lowest reading since the firm began tracking in 1939, and a majority now believe moderate drinking harms health.

What comes next for craft beer

The headwinds aren't easing. With cost the leading reason drinkers cite for pulling back and health attitudes turning against alcohol, small brewers carrying debt and high fixed expenses face a narrowing path. Expect more taproom closings and more Chapter 7 filings before the category finds its footing.