Heritage Distilling to close ‘unsustainable’ tasting rooms
A ‘strategic transition of its alcohol business’ will see Heritage Distilling Co close its five spirits tasting rooms in Washington and Oregon at the end of the year.
The tasting rooms in Washington and Oregon will close on 31 December 2025.
Heritage Distilling will also begin to outsource its spirits production to third-party partners.
The Washington-based craft spirits producer makes whiskey, gin, flavoured vodka and ready-to-drink (RTD) canned products.
Heritage Distilling said the restructuring comes amid changing market dynamics, with people in the US drinking less and the alcoholic beverage industry under financial pressure due to high tax and regulatory burdens.
Co-founder Justin Stiefel explained: “This was an extremely difficult decision and one we did not make lightly.
“For more than 13 years, our tasting rooms have been the heart of our spirits business and the cornerstone of the community for the connections we built. But changing consumer behaviours, increasing costs, and recently enacted and proposed taxes at the state level made future investments in this part of our business operations unsustainable.
“With the largest tax increase in state history now going into effect, and more already being discussed for next year, we determined that the path to profitability and growth for our spirits business in the current environment is not feasible.
“Given that many of our retail leases are coming up for renewal in 2026, we believe this is the right time to implement these changes as it is no longer prudent for the business to sign additional long-term leases on retail spaces.”
The company will instead focus on maintaining its direct-to-consumer channel, which it said has higher margins, as well as product innovations, brand development and growing wholesale volumes.
It will also look to partner with more Native American tribes for branded tasting rooms in and around their casinos through its Tribal Beverage Network (TBN) programme.
The restructuring follows an extensive review by Heritage Distilling’s investors and stakeholders. The move is estimated to save the company more than US$5 million a year.
Last call
Ahead of the closures at the end of the year, Heritage Distilling will host a multi-week ‘Last Call’ celebration to thank its community for the past 13 years of support.
The company has also laid out plans to support customers and employees through the transition.
Jennifer Stiefel, co-founder and president, said the business aims for transparency in the process, “unlike many companies that close abruptly”.
She said: “Too often, companies, large and small, close their doors overnight and post a sign on the window thanking customers and employees with no further explanation. We felt strongly that our employees, club members and customers deserve better.
“We are committed to treating our employees with respect and gratitude, offering a severance programme far more generous than what is typical in our industry, and giving customers the chance to raise a final glass with us.”
Employees who remain until their designated separation dates will receive a comprehensive severance package, with up to eight weeks’ pay based on tenure and role, as well as payouts for accrued sick time and continued health coverage.
The Stiefels co-founded Heritage Distilling in 2011 together with Drew and Sara Kellerman.
The group opened its first tasting room in Gig Harbor, Washington, in 2012. The other Washington tasting rooms are in Roslyn, Chehalis and Tumwater, while the Oregon site is in Eugene.
Heritage Distilling became a public traded company in November last year. It reported 5.4% year-over-year growth to US$8.4 million in 2024, with revenue driven by product sales.
Jennifer Stiefel added: “For more than a decade, Heritage Distilling tasting rooms were places for friends and family to gather to enjoy each other’s company and great spirits.
“As we head into the final stretch of the year, we wanted to give our customers and club members two months of lead time to plan their final visits to our tasting rooms, to share in great memories and to thank the staff who helped them along their customer journey.”
The number of US craft distilleries dropped by 25% in the 12 months to August 2025.
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