Distillery Ups and Downs of 2025: Craft Spirits Industry Is Shifting, but Not Shaken

Northern Latitudes, Grand Traverse Distillery, and Iron Fish share a snapshot of their year

By Todd VanSickle | Nov. 29, 2025

In late October, scores of people bellied up to the bar to sample a variety of spirits made at Northern Latitudes’ new 11,300-square-foot distillery, bar, and restaurant in Lake Leelanau, just a short walk to The Narrows. Throughout the day, a steady drove of customers stopped in to show their support by sipping $12 cocktails and noshing on large charcuterie boards.

With such an overwhelming turnout, the grand opening would suggest that the spirits industry is healthy and thriving. However, uncertainty looms as spirit makers face rising costs, a waning drinking culture, and the side effects of the federal government shutdown.

Michigan has more than 80 craft distilleries and ranks seventh in the nation for the number of spirit producers, according to the Michigan Craft Distillers Association. In 2016, Michigan had 36 distilleries, and by 2020, it more than doubled.

All told, the spirits industry generates more than $1 billion for Michigan’s economy through the distilling process, manufacturing, wholesale, retail and tourism, according to the Michigan Craft Distillers Association. Roughly three million pounds of Michigan-grown grain and fruits are used in the distilling process each year.

Despite the challenges and economic turbulence, distillers are not declaring last call. Instead, several northern Michigan spirit makers are expanding their operation and rolling out new products for the upcoming seasons.

Northern Latitudes Distillery

Northern Latitudes opened its first location in Suttons Bay in 2012. Over the years, the distillery has cultivated a loyal following of customers and the business has grown “exponentially,” says co-owner Mark Moseler.

Moseler used to be the head distiller. “My background in distilling is: I was a public schools social studies teacher and a football coach,” he jokes. “So, I drink a lot.”

During the opening, Moseler’s son-in-law, Martin Holst, who took over as head distiller about two years ago, was in the production area putting Jack Pine Gin labels on glass bottles. He says glass production has moved out of the U.S., contributing to rising costs.

“We buy it from a company here in the U.S., but they get it from India or China,” Holst says. “So, obviously tariffs are a big thing right now. Costs generally have gone up.”

The Leelanau location is almost three times larger than the Suttons Bay location. Having more room to store products and the new 200-gallon still will improve production, Holst says. However, the new building did come with some challenges and unexpected construction costs. And all those costs—along with changing clientele—can add up.

“Ever since COVID, we have seen less business,” Holst says. “What helps us is that we are so diverse—we have 26 products and by the end of the year we will have 30. But I just saw an article that craft spirit sales are down dramatically. I think like 25 percent since last year. I know it is a shifting business.”

During the past 20 years, drinking has decreased by 72 percent among those who are 18 to 34 years old. Also, in the same age group, regular drinkers have declined by more than 60 percent, according to a Gallup poll last year.

Holst believes the growing number of distilleries have also cut into the profit margin, adding that the market has become flooded with spirit makers.

“I think right now we are at 3,000 to 4,000 small craft distilleries in the U.S.,” Holst says. “When we started, there were 200. The market is definitely diluted and it hurts us, especially distribution-wise. But, obviously, we are still selling enough to open a much bigger production facility.”

With that new facility, the Northern Latitudes distiller plans to make Absinithe and a new coffee liqueur with a bourbon base and local maple syrup in the near future. Additionally, Holst is working on a cherry cream that he plans to have ready for the Traverse City Cherry Festival.

Grand Traverse Distillery

Grand Traverse Distillery opened its doors in 2005 and is the state’s first grain-to-bottle distillery.

“We are still seeing new faces, essentially, but not at a rate that we’ve seen them over the last 20 years,” says Operations Manager Steven Rabish.

His father, Kent Rabish, is the owner of Grand Traverse Distillery. He is considered a pioneer in Michigan’s craft distillery industry, lobbying for legislation that has allowed craft distilling to exist and expand throughout the state.

Today, Grand Traverse Distillery’s production facility is located off Three Mile Road in Traverse City and uses almost all local products, with the exception of ingredients like sugar cane that doesn’t grow in Michigan. It takes about 1,200 pounds grain to make a barrel of spirits, says Rabish.

Grand Traverse Distillery has tasting rooms in downtown Traverse City, Frankenmuth, Leland, Suttons Bay, and its newest location is in Charlevoix.

“A lot of our tasting rooms are positioned in tourist areas where people come up, spend a week to enjoy their time off, but that has shifted a little bit,” Rabish says. “I think the economy is shifting. Nothing has gotten cheaper over time. So, I think a lot of folks are just really kind of running their budget to make sure if it is alright.”

In response, Grand Traverse Distillery hopes to release their new affordable Lake Michigan Bourbon by the end of the year.

“I can tell you it is one of the biggest wins we’ve had this year,” says Rabish. “It’s primarily corn. We threw wheat in and a little bit of malt. Wheat has a nice, mellow flavor, whereas most of our whiskeys are rye based, which has a lot more of a peppery spice finish to it. If you take a bite out of rye bread, you’re like, yep, that’s rye. Whereas, you take a bite out of wheat bread, it has a mellow, smooth, almost soft flavor.”

The Lake Michigan bourbon will retail for $34.99.

“It’s at a pretty approachable price point,” Rabish says. “We actually make every drop of it from scratch. It’s not sourced; it’s not blended. It is 80 proof and it’s a little over two years old.”

Aside from rising costs across the board, Rabish says one the biggest challenges for Grand Traverse Distillery is getting the word out about their products.

“We don’t have a group of folks knocking on every door across the state of Michigan. Our biggest loss this year is we’ve lost ground with our statewide distribution,” Rabish says. “I think there’s a direct correlation between sales and folks knocking on the doors at Kroger’s and Meijer.”

Iron Fish Distillery

Richard Anderson and his wife Sarah co-founded Iron Fish Distillery near Thompsonville in 2015 on an abandoned 120-acre farm. Over the past nine years, the owners have restored the property and built a full-line farm distillery that now supports more than 50 full-time jobs. (Keep an eye out for big things coming for their 10th anniversary in 2026.)

“What began as a small, family-operated venture has grown into a year-round destination welcoming nearly 150,000 visitors annually and distributing spirits across Michigan, Illinois, Wisconsin, Colorado, and North Carolina,” says Anderson.

In June, Iron Fish opened its fifth Rickhouse—the distillery’s largest barrel-aging warehouse. Rickhouse 5 is home to more than 1,500 barrels and is a new gathering space with individual lockers for more than 200 Whiskey Club Members, according to Anderson.

Among the 100,000-plus guests Iron Fish has each year, 70 percent are first-timers, Anderson estimates. He adds that the libations are not the only thing that keeps visitors coming back, as food and live music help too.

In May, Iron Fish released Batch 1 of Mad Angler Manifesto whiskey, a special distillery-only release. The name is inspired by Michael Delp’s poetry and his call to defend and celebrate northern Michigan’s rivers.

“That sold out faster than we anticipated,” says Anderson. “Mad Angler Manifesto showcases the talent and expertise of our blending team as they have carte blanche on selecting any whiskies from our inventory to create this 500 bottle blend.”

This year for the first time Iron Fish released the full family of Mad Angler estate whiskeys at the same time—rye, bottled-in-bond, and bourbon—all aged for more than six years using all Michigan grain.

Despite the recent releases and growing foot print, Iron Fish faces the same economic and staffing woes as other small businesses.

“Like many in the craft spirits industry, we continue to navigate workforce shortages and rising costs across ingredients, packaging, and logistics,” Anderson says. “Maintaining a skilled team while managing inflationary pressures has required constant creativity and discipline, but it’s also reinforced our commitment to investing in people and efficiency on the farm and in the distillery.”

Balancing Cost and Craft

The cost of a craft cocktail doesn’t come cheap, but distillers say customers are paying for quality and craftsmanship.

“At Iron Fish, cocktails featured at the distillery are designed to showcase the unique flavors and farm-to-glass nature of our spirits,” Anderson says. “That level of craftsmanship commands a premium price, but we’re equally focused on maintaining cost efficiency and delivering exceptional value in every cocktail we serve. Our cocktails range in price from $10-$15, which we believe is extremely competitive in the current craft cocktail market.”

Bottles tend to run between $40-$70 or more.

Speaking of affordable bottles, when we visited Grand Traverse Distillery, the Lake Michigan Bourbon was only available in house. Rabish was hoping to get approval by Nov. 1 for wider distribution, but the federal government shutdown put some products in limbo. Now, he hopes to have Lake Michigan bourbon on store shelves by the holidays.

The federal government shutdown also impacted Northern Latitudes. “The shutdown [was] prohibiting the release of some stuff,” Holst says.

The distiller explained that spirit labels and formulas need to be approved by the state and federal government before they can be distributed and sold at stores. Among the spirits waiting for release are an aged gin and two new Finnish lines of bourbon.