The Dish: As national whiskey makers struggle, Maryland distilleries forge their own path

Have you seen the headlines?

Jim Beam paused production at its flagship plant in Kentucky for a year. The parent company of Jack Daniel’s laid off more than 600 people. The producer of George Dickel Tennessee Whiskey temporarily closed its facility. Garrard County Distilling Co. is up for foreclosure. Uncle Nearest is insolvent.

Nationwide, experts predict a troubling “unforeseen shake-out” for the grain-based liquor. But in Maryland, a thirsty generation of craft whiskey makers are calling it an opportunity.

“The bigger industry is just now feeling what us as small guys have been feeling and learning to manage all along,” said Old Line Spirits owner Mark McLaughlin.

He’s part of a nascent group of small, independent distillers in Maryland who believe their spirits can defy a depressing industrywide outlook by doing business differently: leaning into hyperlocal appeal, moving products upmarket and circumventing big-name distributors who themselves are going bankrupt.

In 2025, the number of Americans drinking alcohol reached record lows, according to a Gallup poll — but it wasn’t always this way. American-made whiskey surged in popularity during the pandemic as people at home stocked up. Whiskey makers responded, introducing new products and expanding operations.

“When it comes to American whiskey the golden age is today,” said David Ozgo, chief economist of the Distilled Spirits Council of the United States, said in January 2021.

But by the time many distilleries released the barrel-aged liquor they had spent time fermenting, pandemic-era restrictions lifted — and people were drinking less.

The drop in demand created a whiskey glut. Lawson Whiting, whose Brown-Forman Company owns and produces Jack Daniel’s, said at an industry conference in March that about a third of the country’s distilleries went bankrupt last year, and whiskey brands are “going out of business faster than anything right now." Tariffs and the rise of weight-loss drugs diminished sales even further.

“The way I view it, it was kind of like the housing crisis back in the day: Everyone knew something was going to give but they didn’t know when,” McLaughlin said.

McLaughlin’s business was too small to justify scaling up operations during the pandemic. “I haven’t paid myself in quite a while,” he said, adding that investment in his relatively rare, all-barley blend of single malt whiskey and a new vodka helped his brand.

“What we’re already finding is folks want to be more picky with their spirits,” said David Harris, who runs Song Dog Farm Distillery in Boyds.

His year-old craft distillery makes kosher-certified whiskey from rye harvested in Montgomery County — a pricey endeavor now that far fewer farmers are growing the grain. Pre-Prohibition, the state was a leading producer and is credited with America’s first rye whiskey.

The local grains give the drink its distinctive flavor, he said — and if that’s not enough, the distilling site also hosts petting zoos, private events, tours, cocktail tastings and a food menu.

“I don’t know anybody whose distilleries look like this [Song Dog] or have that much going on,” said Jamie Windon, former president of the Maryland Distillers Guild and founder of the Windon Distilling Co. in Saint Michaels.

Larger local brand Sagamore Spirit, which was acquired by multinational company Illva Saronno in 2023, has also invested more in local events. Sagamore lost around 1,000 cases of whiskey because of tariffs and a drop in demand, according to Randy Norwood, who oversees production at the Baltimore Peninsula distillery. Their monthly Whiskey on the Waterfront series, with live music, food trucks and cocktails, hopes to help combat that downturn.

Such luxury offerings are crucial for attracting customers as the number of craft distilleries nationwide falls for the second year in a row, according to a 2025 report by the American Craft Spirits Association. The closures also create more risk for restaurants, who must adapt menus and find new suppliers to keep up.

In Maryland, where most of the state’s liquor is produced by craft distilleries, the field has grown from nearly zero businesses in the early 2000s to more than 40, Windon said. Part of the growth stemmed from the state’s liquor laws, which permit distilleries to sell direct to consumers, helping bypass the usual obstacle of catching a distributor’s attention.

Windon owns her distribution channels. And Harris leans on the Montgomery County government — one of 18 jurisdictions in the country to oversee their retail alcohol sales — for access into the area’s liquor stores and restaurants through the Alcohol Beverage Services team. “That’s somebody who’s maybe 6 miles away. It’s no big deal,” he said of shipping the liquor and saving money.

Others are facing a “crisis,” Harris said, as businesses that once held the keys to liquor store shelves and menus are shuttering facilities, such as Bacchus, a former partner with McLaughlin’s Old Line that merged with Breakthru Beverage Group, and Republic National Distributing Co., which announced plans Friday to potentially lay off more than 300 workers at their Jessup location.

“Over the last year we’ve seen a lot of layoffs,” said Mike Cherner, owner of Prestige-Ledroit Distributing Co.

Distributors are consolidating into larger companies within the industry as gas prices, tariffs and interest rates rise, he said, leaving fewer options available for local whiskey-makers.

To better protect Baltimore Spirits Co., owner Max Lent is cutting off wholesale distributors entirely. Starting on May 1, his spirits will no longer be sold to liquor stores, bars and restaurants, but instead exclusively through the business, which has a tasting room and cocktail gallery.

“People have been told or assumed that this is the model,” Lent said of going through a distributor and competing with nationally known products. “Especially now, when there’s more distilleries than ever, that model doesn’t work anymore for a number of brands.”

He wants to show other small brands that they can take further control of their product and how it’s distributed. Lent’s business doesn’t have the luxury of ebbing and flowing with the market. “We need to outperform,” he said.

While Lent’s wholesale revenue remains steady, he knows the company can’t increase production or drop prices due to the more traditional, expensive process of distilling their rye whiskey.

“We’re going to bottle way less and be more detail-oriented,” Lent said, adding that such a personal touch can differentiate Baltimore Spirits Co. as an exclusive, specialty experience.

“People are interested in us to see if this model does what we think it will do,” he said. “We want to grow, we don’t want to shrink, and this path where we get to control everything is the key to that.”