As part of our ongoing series IBWSS Insights, ahead of the International Bulk Wine & Spirits Show (IBWSS), Sid Patel, CEO of Beverage Trade Network and Founder of IBWSS, sat down with Tom Neiheisel, Director of Bulk Sales & Contract Distillation at Pernod Ricard, to discuss the evolving landscape of the bulk whiskey market. From pricing pressures and consumer demand shifts to the opportunities that lie ahead for non-distiller producers, Neiheisel offers a candid and practical look at how shifting demand, excess inventory, and evolving buyer behavior are influencing both risks and opportunities across the supply chain.

Edited excerpts from the interview.

Can you explain the current trends you’re seeing in the bulk whiskey market, both domestically and internationally?

Current trends in the bulk whiskey market—both in the U.S. and globally—show growing interest in wheated mash bills, American Single Malts, and especially in aged whiskey, with six years and older receiving heightened demand. However, these pockets of interest exist alongside a broader market imbalance. Industry data suggests there is currently 200–300% more whiskey in inventory than needed relative to nine-liter case sales, which will take time to normalize. One surprising consequence of this surplus is that 2–3-year-old bourbon is now selling below the price of new fills, reversing traditional pricing structures and creating added pressure on the economics of contract distillation. This shift has contributed to a more complex and competitive environment for producers and buyers alike. 

How has the demand for contract distillation services evolved in recent years, and what factors are driving that growth?

In recent years, the contract distillation landscape has transitioned from a seller-dominated environment to one where buyers hold more negotiating power. While demand for contract services remains, the availability of aged liquid and increased production capacity across the industry have intensified competition.

For non-distiller producers (NDPs), this climate presents a favorable window. With pricing on many aged liquids rolling back to levels seen 5–10 years ago, new entrants have an opportunity to develop or expand their brand portfolios more cost-effectively than in previous years. However, success depends on flexibility—both in production strategy and in financing.

What are the biggest challenges bulk whiskey sellers face today, and how can they overcome them? 

The biggest hurdle facing bulk whiskey sellers today is the sheer volume of excess liquid on the market, often with minimal differentiation. Sellers must also grapple with the reality that many potential buyers express strong intent without having the capital to finalize deals. Secondly, verifying a buyer’s financial readiness early in the conversation is critical. Asking direct questions about liquidity can help determine whether a transaction is viable, saving valuable time and resources for both parties.

What should bulk whiskey buyers look for when sourcing from contract distillers to ensure quality and consistency?

For those sourcing from contract distillers, there are several key criteria for ensuring product quality and long-term reliability that one must focus on. First, buyers should look for operational and leadership experience in the distilled spirits industry—as approaches from adjacent sectors like beer or CPG often fall short.

Buyers should also request samples of both in-barrel and bottled products to assess the distiller’s capabilities. A consistent, data-driven approach to quality control is essential. Just as important, however, is the financial health of the partner distillery, and this is becoming more critical by the day. Make sure your business partner has the financial stability (read liquidity/cash) to be in this business for the long haul. You certainly do not want your barrels being held hostage by a lender in the event of a default. 

How is consumer demand for different whiskey styles influencing bulk sales and distillation contracts?

Consumer preferences continue to shape the dynamics of bulk sales and contract distillation. Buyers today are focused on value and age—a reflection of both tighter wallets and heightened expectations. This bifurcation in demand is reflected at retail, where value-driven labels and super-premium expressions are driving growth.

Distillers and bulk whiskey suppliers must adapt to this reality by offering aged stock for brand premiumization while also remaining competitive in pricing for younger liquid, particularly in the 1–2 year range.

What advice would you give to new entrants looking to get into bulk whiskey sales or contract distillation?

Other than “don’t do it!”? Key to contract distillation is flexibility and value. The amount of excess aged liquid on the market is putting pressure on the price of new fills (with buyers frequently asking “why purchase a new fill when 1-2 year old liquid is almost the same cost and you are two years ahead of the aging process?”). Secondly, (if possible) try to offer your customers both new fills and aged liquid to fill their pipeline. This way if they are launching or supporting a new product, the customer has new fills through aged liquid that is ready for the retail shelf.

Looking ahead, what do you see as the biggest opportunities and risks for the bulk whiskey market over the next 3 to 5 years?  

Over the next three to five years, the greatest opportunities lie in delivering aged whiskey and long-term value to buyers. As consumer preferences stabilize and brands seek consistency, distillers who can offer reliable aged inventory and flexible contract terms will be well-positioned to lead.

On the risk side, anticipate further industry shakeout. Firms that are heavily leveraged or undercapitalized may struggle, while those with stable financial foundations—especially privately held or well-capitalized businesses—will be better equipped to weather volatility.

Want to hear more from Tom? Meet Tom Neiheisel in person at the upcoming IBWSS Show, where he’ll be joining fellow industry leaders to discuss market trends, contract distillation strategies, and how brands can succeed in today’s bulk spirits economy.

Header image sourced from Tom Neiheisel (LinkedIn).