On October 17, 2025, Staggemeyer Stave—a supplier of barrel staves for American wine and whiskey makers—filed for Chapter 11 bankruptcy protection.
The move, triggered by mounting debts and a creditor lawsuit over nearly $4 million in unpaid loans, reflects broader headwinds facing suppliers in the beverage industry.
As distilleries and wineries navigate economic pressures, the effects are rippling from local communities to global markets.
Mounting Pressures and Industry Strains
Staggemeyer’s financial collapse did not occur in isolation. The company’s troubles mirror broader challenges facing the U.S. spirits sector: high interest rates, declining sales, and shifting consumer habits have squeezed both producers and suppliers.
According to the industry publication Vinetur, reduced consumer spending and economic uncertainty have significantly impacted the results. The spirits industry has faced significant headwinds, with Brown-Forman reporting a 5% decline in net sales in the second half of 2024.
The bankruptcy followed a Chapter 7 petition filed by Decorah Bank & Trust Company, which cited $3,998,969.36 in unpaid loans. Staggemeyer’s assets and liabilities are estimated between $1 million and $10 million, with 50 to 99 creditors potentially affected. The family-owned company has been in operation for over 50 years, producing white oak barrel staves near Caledonia, Minnesota.
Rising Costs and Industry Impact
The broader cooperage industry has faced significant pressures in 2025. In August, Independent Stave Company announced it would lay off 112 workers at its Kentucky facility. In January, Brown-Forman announced the closure of its Louisville cooperage by April 2025, along with a 12% reduction in its global workforce, citing declining sales.
White oak barrels are indispensable for aging whiskey and wine, imparting flavor and character. Barrel prices have fluctuated significantly, with American oak barrel costs rising by as much as 10% in recent years due to supply constraints resulting from increased whiskey demand. However, the industry has also seen softening demand as spirits sales decline.
Retailers are adapting by increasing the availability of alternative products. Some consumers are turning to ready-to-drink cocktails and non-traditional packaging as economic pressures mount.
Business Realignment and Global Repercussions
The cooperage industry is undergoing significant realignment. Brown-Forman sold its shuttered cooperage assets for $13.66 million to an external supplier in 2025, shifting from internal production to outsourced barrel supply. The company expects approximately $70-80 million in annual cost savings from the closure.
The disruption extends beyond U.S. borders. American barrels are prized by European and Canadian distillers for their quality and unique aging properties. However, tariff pressures have complicated the global barrel trade. In 2025, the U.S. implemented a 15% tariff on imported spirits from the EU, with retaliatory measures affecting American cooperage exports.
Trade experts note that rising costs and tariff uncertainties may prompt overseas producers to seek alternatives, potentially reducing demand for U.S. barrels. The cooperage industry has joined the “Toasts Not Tariffs Coalition”, urging the U.S. government to establish lasting trade agreements.
Supply Chain and Market Adjustments
The ripple effects of challenges in the cooperage industry extend to related sectors. The spirits industry overall is experiencing what industry observers call a market correction after years of growth. Bourbon sales growth slowed to just 2% between 2021 and 2024, while Brown-Forman reported a 7% decline in U.S. sales in fiscal 2025.
Some smaller distilleries have proven more agile in adapting to supply chain disruptions, while larger legacy brands face higher costs and longer lead times.
Innovation and Adaptation
Industry analysts say ongoing pressures are accelerating changes in production and supply chain strategies. Cooperages are exploring more efficient barrel utilization through intelligent inventory rotation and extended barrel lifecycles. Some producers are experimenting with alternative aging methods, though traditional oak barrels remain the industry standard.
The bankruptcy of Staggemeyer Stave and the broader cooperage industry restructuring expose vulnerabilities in the interconnected world of wine and whiskey production. As American and international markets adjust to declining sales, tariff pressures, and changing consumer preferences, the sector’s future will depend on supply chain resilience and the ability to meet evolving demands.