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Indiana-based MGP produces bourbon and rye whiskey for other brands and for its in-house brand, Ross & Squibb. Sales for its contract distilling line, Distilling Solutions, plummeted 43 percent to $40.9 million and Branded Spirits’ sales were down by three percent to $60.7 million from the previous year. Just the revenue from Ingredient Solutions, food-grade wheat proteins and starches, increased by nine percent. This isn’t the first time the company has reported a drop in sales. Last year, the company issued a profit warning that forecast annual sales dropping to $700 million from $750 million. A month later, CEO David Bratcher said MGP would pull back on whiskey production because of a lack of demand. Distillers across the country are worried. “There’s a growing concern that our international consumers are increasingly opting for domestically produced spirits or imports from countries other than the U.S., signaling a shift away from our great American spirits brands,” Chris Swonger, president and CEO of the spirits council said in an October statement. The issue appears to be twofold. Higher tariffs are discouraging foreign buyers, making it more challenging for spirits companies to stay afloat. Tequila and mezcal sales outpaced whiskey for the first time in 2023. But Americans are also drinking less than ever. In a July Gallup poll, only 54 percent of U.S. adults said they drink alcohol. That’s the lowest number since 1939, when Gallup began tracking drinking trends. Despite growing concern, MPG attempted to put the news in a positive light. “Our third quarter results demonstrate the resilience of our business and our team’s ability to continue to deliver against our key initiatives amid ongoing industry headwinds,” said Julie Francis, MGP president and CEO, in a statement. She added that the company’s efforts and commitment “position MGP for sustained long-term value creation.”
