House Spirits Distillery, maker of Westward Whiskey, has initiated Chapter 11 bankruptcy proceedings as the Oregon-based craft distiller confronts mounting financial pressures.
The company filed its petition on April 6 in Delaware under Subchapter V, a streamlined process designed for small businesses with smaller debts. It is hoped that this filing will allow Westward to continue operating well into the future. Founder and CEO Thomas Mooney is leading the restructuring effort while the distillery continues normal operations.
The Portland craft distillery, established in 2004 during the early wave of American craft spirits, played a pioneering role in developing American single malt whiskey. The category recently received formal recognition after years of industry advocacy.
A Statement From Thomas Mooney, Founder & CEO of Westward Whiskey
“Earlier this week, Westward Whiskey filed for Chapter 11 (Subchapter V) bankruptcy protection, a mechanism designed to allow small businesses to restructure for success in the future. Though consumer interest in Westward grew last year, this is a necessary step as we explore financial and strategic alternatives to better position our company to thrive as an independent craft distiller. Throughout this restructuring process, we will continue to operate as usual and bring our world-class whiskeys to our growing consumer base.
“The need for this restructuring process is driven by numerous challenges that have put a significant strain on our business: a decline in demand for bottled spirits in general; the rising cost of goods and services due to inflation that will only accelerate with tariffs; market access constraints that make it difficult for independent craft spirits producers to reach consumers; large obligations that we entered into, at a different time and under different circumstances; and significant investment toward increasing production and inventory.
“We have chosen to embark on this process because we are confident that Westward has a bright future, and restructuring will position us to compete and win in the marketplace as it exists today, not as it was in the past.”
This statement was sent to us at The Whiskey Wash on behalf of Westward Whiskey.
Market Headwinds and Production Imbalance
According to court documents, Westward faces a perfect storm of industry challenges. Post-pandemic consumer behavior has shifted, resulting in decreased demand for premium spirits products over the past two years.
Simultaneously, the company expanded production capacity and warehouse space, only to see these investments sit largely unused amid changing market conditions. This overproduction strategy left Westward with substantial inventory that failed to generate expected revenue.
“Market access constraints have made it increasingly difficult for independent craft producers like us to reach consumers,” Mooney noted in a statement given to The Spirits Business.
Rising inflation and production costs further squeezed the company’s margins despite aggressive cost-cutting measures. Westward reportedly reduced monthly cash expenditures from approximately $1 million to under $300,000, but these efforts proved insufficient to stabilize finances.
Legal Team and Financial Position
Westward has retained attorneys from Pashman Stein Walder Hayden PC to navigate the bankruptcy process. The legal team includes Delaware-based partner Joseph Barsalona II.
Industry Context and Investment History
The bankruptcy comes at a pivotal moment for craft distilleries nationwide. Westward’s filing follows Diageo’s recent announcement that it would stop accepting new brands into its Distill Ventures accelerator program, which had backed Westward since 2018.
Other Distill Ventures portfolio companies have also faced challenges, with Danish whisky maker Stauning recently reducing its workforce by approximately 25% following Diageo’s withdrawal from the program. Stauning faces additional challenges, including the recent revelation that the term “rye whisky” is banned for EU producers.
What Does This Mean For Westward Whiskey Going Forward?
Despite current difficulties, Westward points to promising market data in the filing. The ultra-premium American whiskey segment (priced above $60) remains strong, with 4.6% annual growth compared to declining sales in lower-priced categories.
The company maintains substantial production assets, including over 6,800 barrels of aging whiskey inventory. This stockpile could support significant future growth if market conditions improve.
“Going forward, Westward’s mission is to become the most celebrated luxury American whiskey, and a top 10 American whiskey over $75 per bottle, which includes its core range and quarterly innovations released through the brand’s club,” Mooney stated in the court filing.
The company aims to eliminate unsustainable contracts while preserving jobs and core operations as it works toward a reorganization plan that would allow it to reemerge as a viable business.
Of course, we very much hope that Westward Whiskey can find a solution. Two expressions from the distiller were recently awarded medals in the inaugural Whiskey Wash Awards: Westward Whiskey Vienna Malt, and Westward Whiskey Vintner’s Cuvée.
In a recent email exchange, Master Blender Miles Munroe highlighted what he believes makes Westward Whiskey special: “I’d say our approach to making whiskey is unique and the different expressions all begin with the same vision that we keep at Westward. To make whiskey that speaks of its origins and that tells you about the people who make it.”
