Bourbon and Beer Maker Files Chapter 7, Shuts Down

The craft beer market shrank 5.1% in production and contracted 2.9% in U.S. brewery count during 2025, according to Brewers Association figures, and the wreckage is now showing up in bankruptcy court. Goodwood Brewing & Spirits filed Chapter 7 on June 22, the latest casualty in a sector squeezed by costs, lawsuits and a structural drop in how much Americans drink.

At a Glance

• U.S. total beverage alcohol volumes fell 5% in 2025, per preliminary IWSR data.
• Beer dropped 5%, wine 6%, spirits 4%; ready-to-drink (RTD) beverages held up best at down just 1%.
• Only 54% of U.S. adults now say they drink, the lowest in Gallup's nearly 90-year trend.
• Goodwood Brewing filed Chapter 7 on June 22 after closing all taprooms, owing the IRS over $400,000 and facing multiple rent suits.
• 3rd Level Brewing, The Brewer's Art and Magic City Brewing all filed Chapter 7 earlier in 2025.

The demand picture is worse than the cost picture

Input inflation, labor and rent get most of the blame for brewery failures, and they matter. But the numbers point to something harder to fix than a bad lease: people are simply consuming less alcohol. IWSR's US Navigator pegs the 2025 contraction in total beverage alcohol volumes at 5%, and the declines run across every major category. Beer fell 5%, wine 6%, spirits 4%. That breadth is the tell. When wine, spirits and beer all sink together, the problem is the drinker, not the product line.

The one bright spot was ready-to-drink. RTDs slipped only 1% and kept gaining share against everything else. That shift in mix is exactly what's hollowing out traditional brewers, who built capacity around a category that's now shedding volume.

Cost has become the dominant reason people cut back. IWSR Bevtrac consumer research found 31% of U.S. drinkers cite price as a reason for drinking less, making it the most common driver of moderation in the market. That's a meaningful number, and it reframes the demand decline as partly an affordability story rather than a pure health-and-lifestyle one.

IWSR Managing Director Marten Lodewijks describes the behavior as selective rather than uniform trading down. "Consumers are becoming more selective about where they allocate their alcohol spending, increasingly evaluating purchases based on their own price-to-quality ratio," he said, noting that drinkers will still pay up "only when a product clearly justifies its price." For specialty brewers charging a premium, that bar is now higher.

A 90-year low in who drinks at all

The most structural data point comes from Gallup. The share of U.S. adults who say they drink has fallen to 54%, down a percentage point to the lowest reading in a trend Gallup has tracked since 1939. Just as important, a majority of Americans now believe moderate alcohol consumption is bad for health for the first time since Gallup began measuring that view in 2001. The figures come from the firm's annual Consumption Habits survey, fielded July 7-21.

That's a slow-moving variable, but it sets the ceiling on the whole industry. A shrinking base of drinkers, combined with cost-driven moderation among those who remain, leaves brewers fighting over a smaller pool of spending. Layer on RTDs siphoning off occasions, and the math gets ugly fast for a mid-sized craft operation with fixed real estate and debt.

Goodwood Brewing: how the numbers added up to Chapter 7

Goodwood's collapse wasn't a single shock. It was a stack of obligations the business couldn't carry once revenue softened. The Chapter 7 petition followed the shutdown of all its taprooms, a string of lawsuits and alleged debt running into the millions.

The Owensboro restaurant and taproom at 101 Frederica St. closed on April 26, one day before a Daviess Circuit Court judge entered a default judgment against the owners. Per Louisville Business First, Judge David Payne awarded landlord Entertainment at the Enclave $99,604.96 plus court and attorney fees, after the landlord alleged more than $120,000 in unpaid rent stretching back to November.

The same outlet reported earlier in the spring that the company was in an ownership transition while fielding multiple suits over nonpayment of rent, services and taxes. The tax bill alone is sizable: Goodwood owes the IRS more than $400,000 in back taxes, according to reporting by the Lexington Herald-Leader.

Then there's the Whiskey Row location. A March 6 lawsuit in Jefferson Circuit Court alleges Goodwood owes roughly $225,000 in unpaid rent for January, February and March, plus unpaid property taxes. Put the pieces together and you get a balance sheet with no room left to maneuver.

Under Chapter 7, a trustee is appointed to liquidate the assets and distribute proceeds to creditors under the priority rules of the bankruptcy code. No detailed schedule of debts, assets and creditors has been released publicly. The company's website is down and its Facebook page hasn't been updated since March, both consistent with an operation that has effectively ceased.

Goodwood isn't an outlier

Several craft brewers have already filed in 2025, and the pattern is consistent: shutdowns followed by liquidation. The comparison below lines up the recent Chapter 7 cases.

3rd Level Brewing in Texas filed Chapter 7 in April, blaming financial distress and industry conditions. Owner Clint Bradley told TheStreet's Kirk O'Neil the plan was to keep going as long as possible: "We'll see how this plays out. We're going to operate as normal until someone tells me I have to stop operating." That fight appears lost; local media report the brewery has closed, and Yelp lists it as such.

The Brewer's Art in Baltimore filed in February after abruptly shutting down. The petition, lodged in the U.S. Bankruptcy Court for the District of Maryland on Feb. 13 under Old Line Brewers LLC, listed $100,000 to $1 million in assets against $1 million to $10 million in liabilities. The liability range running an order of magnitude above the asset range tells you most of what you need to know about recovery prospects for unsecured creditors.

Magic City Brewing, the heavy-metal-themed brand in Akron, also filed Chapter 7 in February to liquidate. It closed its Merriman Road taproom before Feb. 3 and shut its flagship brewery and taproom on Manchester Road on Feb. 14, per the Akron Beacon Journal.

What ties the failures together

RTMNexus CEO Dominick Miserandino argues the closures don't reduce to a 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."

That last point matters for craft specifically. Craft beer's premium positioning depends on discretionary, experimental spending — the willingness to pay more for a small-batch or specialty product. When budgets tighten and the price-to-quality test gets stricter, that's the first spending to go. The data backs the anecdote: RTDs down 1% versus beer down 5% is a measurable migration toward cheaper, lighter, lower-commitment options.

Why are so many craft breweries filing for bankruptcy?

The failures reflect a mix of higher costs for materials, labor and rent alongside falling demand. U.S. total beverage alcohol volumes dropped 5% in 2025, and beer fell 5%, leaving thinly capitalized brewers unable to cover fixed costs.

Are Americans actually drinking less, or just spending less?

Both. Gallup's data shows the share of adults who drink at all has fallen to 54%, a record low, while IWSR found 31% of drinkers cite cost as a reason for moderating. Fewer drinkers and tighter budgets are hitting demand at the same time.

What does a Chapter 7 filing mean for these breweries?

Chapter 7 is liquidation, not reorganization. A court-appointed trustee sells the company's assets and distributes the proceeds to creditors according to bankruptcy law, which typically ends the business rather than restructuring it.

Which alcohol category is holding up best?

Ready-to-drink beverages declined just 1% in 2025 and continued gaining market share, far outperforming beer, wine and spirits, which fell 5%, 6% and 4% respectively.

Where this goes next

The setup heading into the back half of the cycle isn't favorable for traditional craft. A shrinking drinker base, cost-conscious moderation among those who stay, and a clear migration toward RTDs all push against the premium, experience-driven model that defined the craft boom. The brewers carrying the most leverage and the most physical footprint are the ones most exposed, and the 2025 filings suggest the consolidation phase is well underway rather than finished.