A beloved brand of vodka is on the rocks (and we don’t mean the beverage itself).
Last week Stoli Group USA, the American subsidiary of Stoli Group which produces the namesake vodka and other spirits, along with affiliate and bourbon distributor Kentucky Owl, filed jointly for Chapter 11 bankruptcy in a Dallas federal court.
Here’s why it happened and what it means for vodka fans.
1. What Led to the Bankruptcy?
Blame Gen Z (but only in part). Younger drinkers seem to prefer canned booze to bottled liquor, and they’re drinking less overall. And while the company pointed to slowing demand for spirits and rising prices as a factor, a change in trends isn’t the only thing that hurt Stoli.
In August, parent company Stoli Group suffered a data breach and ransomware attack that caused “substantial operational issues throughout all companies within the Stoli Group.”
According to USA Today, Stoli Group USA says that systems affected by the attack will not be fully operational until early 2025.
2. What Else Went Wrong?
Stoli has had a long, complicated history with Russia. Founded in Russia in the 1930s, the company was owned by the Union of Soviet Socialist Republics until the collapse of the Soviet Union in 1991. The brand was then privatized and bought by Latvian company SPI Group.
In 2000, Russian President Vladimir Putin also issued an executive order seeking to reinstate government ownership of Stoli. The company has since faced ongoing, and costly, legal battles with the Russian government.
This summer the Russian government seized the two remaining Stoli distilleries in Russia.
Stoli also rebranded after the Russian invasion of Ukraine to blunt any boycotts of the vodka brand. Until 2022, the brand was sold as Stolichnaya in the United States, a name that loosely translates to “capital city” in Russian.
3. How Much Does Stoli Owe?
In the legal filings, the companies said the brand is looking for help to pay off a combined $84 million in debts.
4. Will Stoli Still Be Sold in the U.S.?
Yes, Stoli fans can breath a sigh of relief, Stoli vodka and Kentucky Owl bourbon will continue to be stocked on store shelves in the United States as the company navigates the bankruptcy, which only affects the U.S. portion of the business.
5. Is Vodka Becoming Unpopular?
Not really. Vodka is still the most popular spirit in America, but all alcohol has dropped in sales. Last year vodka saw a 7.7% fall in volume.
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