What a sad, sad, sorry state of affairs: Kentucky Owl Bankruptcy

This story will begin with a caveat, namely I don’t have access to internal sales figures/financials, so this piece will be be speculative, opinionated, and will definitely include a rant. Also, if you’d like a look back at Kentucky Owl Rye, I wrote about it awhile back.

On 11/29/24 Stoli Group USA filed for bankruptcy protection from creditors with the intention of reorganization. This filing will allow Stoli Group to continue business until the financials are sorted. Social media breathlessly circulated the announcement, without commentary or clarification and will allow the comments section or your imagination to dictate what it all means. I prefer to comment about this in a longer form so fasten your seatbelts.

Let’s start with the concept that typically, most companies with strong sales don’t end up in bankruptcy protection.

Secondly, a lot of folks are prone to think that a bankruptcy means they are insolvent, and are now out of business. There are many categories of bankruptcy, and this one isn’t a closure. This is a reprieve from debt payments while they figure out how much change they can find behind the couch cushions.

Stoli Group USA includes a bunch of brands that aren’t just whiskey and vodka, so the debt problem is not exclusive to their whiskey. (I seriously encourage you to read the product descriptions, marketing gobbledygook at its finest!). Kentucky Owl and “Wiseman” are the whiskey segment of their portfolio and my rant below will address their grotesque mismanagement of that brand.

It appears that Kentucky Owl LLC is indebted to Bardstown Bourbon Company for about $5 million USD and there are 40+ other unlisted creditors which probably have their hand out expecting to be paid at some point. It’s uncertain at this time if BBC is the largest creditor, but it does house a lot of Kentucky Owl’s liquid assets in their rick houses. Notably BBC also does contract distilling for them. I seem to recall (hopefully correctly) that Castle and Key had some Owl barrels aging as well, so I’m guessing there’s some money owed to them.

It’s clear at this point that the spirits industry is in a rough patch (and we haven’t even gotten to the matter of any potential tariffs) and Stoli is not the only brand portfolio experiencing pain right now, but they are the only one to have filed for court protections.

While the overall state of the industry is real, one cannot let Stoli off the hook for the absolute ham-fisted approach they’ve taken with the Kentucky Owl brand.

We were really fortunate to have had this time in our lives.  

>begin rant<

I’d love to pick the brains of the hapless sad sacks that ran that brand into the ground because for the life of me I cannot understand how you could take a company that had the talents of Dixon Dedman, AND Mark and Sheri Carter and turn it into a truck full of steaming dog shit. Yes, I know that Dixon sold, and the Carters were out, but JFC as a corporate overlord wouldn’t you want the hits to keep on coming? It’s almost like they said “pretty label, WANT!” and backed up the cash money trucks and forgot what they purchased.

The beginning of the end was when Confiscated came out. They forced a huge amount of average barrels on a talented blender who had never worked at scale like that before. He put together a decent blend (admittedly not his best release, but serviceable nonetheless) and the company greedily priced it north of $100 which was a reach considering what it was they had bottled. Fan backlash was pretty quick, but also considerate, not everything is a hit after all. Many agreed that the correct price would have been around $79 and moved on.

Admittedly good at $79, not so much at $129.  

What followed was several utterly forgettable (but still premium priced) rounds of the numbered batch bourbon releases and then the “Wiseman” shelf turd releasees (sourced from BBC). The most egregious mistakes were what happened to be the strangest brand decisions possible. Oh to have been a fly on the wall during the product meetings that gave us the St. Patricks Day edition, the Takumi, the Maghstir (did Stoli even like Kentucky?), and the massively insulting Mardi Gras XO cask edition.

Prices remained dumb and climbed to dumber. The heat index plummeted. Dreams of Owl park faded away. Deep discounts followed as many of these offerings sat so long they had a 1/4” of dust on them.

While Stoli had some things happen outside of their control, the Russian invasion of Ukraine, the backlash against Stolichnaya as the face of Russian spirits, which wasn’t Stoli’s fault that people were ignorant of the fact that it was made in Latvia, and the company is registered in Luxembourg, and that the founder escaped Russia when they floated the idea of nationalizing the brand. Ignorance hurt them so badly that in 2022 the brand, rebranded

What they did with Kentucky Owl however, was completely avoidable if the decision makers had been even semi-competent. The ding-dong decison makers at Stoli not only miscalculated on what the future was going to be, but they mismanaged what they had- which was a small brand with a passionate fanbase that had a tremendous upside if cultivated slowly.

If only Dixon had been able to sell to a company that would have allowed it to grow at its own pace, and curated a thoughtful portfolio around it that enhanced, not detracted from it.

Alas, Stoli was not the company to thoughtfully grow Kentucky Owl, they simply couldn’t stop stepping on rakes and now here they are. Bankrupt not just in the courts, but in the public mind as well.

>end rant<

- Mickey Pinstripe