US distilling group MGP Ingredients is expecting to see lower sales and earnings in 2026 than it recorded last year.
MGP Ingredients has issued a forecast of $480 to $500m in sales for this year, down from the $536.4m it generated in 2025, itself a 24% decline on 2024.
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The company said its forecast was due to an “anticipated” sales drop in the company’s Distilling Solutions division.
Last year, the company’s Distilling Solutions unit, which produces spirits for other businesses, saw sales decline 45% on 2024 to $181.4m.
The group’s “brown goods” sales in this segment specifically were down by more than half, “as the company proactively renegotiated contracts and many large customers paused purchases, including to balance their whiskey inventories and manage their working capital”.
The whiskey and vodka distiller also said yesterday (25 February) it expected adjusted EBITDA for 2026 to sit between $90m and $98m. In 2025, the business saw this figure reach $116m, a decline of 41%.
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By GlobalDataMGP’s net income in the year dropped to a loss $107.8m, attributed “to a discrete, non-cash adjustment to goodwill and indefinite-lived intangible assets”, the business said. The measure was down 51% to $61.5m on an adjusted basis.
The group’s gross margin dipped 350 basis points to 37.2%, mainly due to “lower brown goods volumes, the impact from the outage of a key piece of equipment, and higher waste starch disposal costs at the company’s ingredients plant”.
Reflecting on the results, Julie Francis, who became the company’s CEO in July, said “2025 was a year of deliberate repositioning for MGP”.
She added: “From an industry standpoint, we believe that elevated inventory levels will continue to pressure our brown goods business in the near-term. However, we expect improved operational reliability in the Ingredient Solutions segment, continued premium plus momentum, and accelerated productivity and cost discipline to help partially offset these headwinds – all of which are reflected in our 2026 guidance.
“As we look ahead, we believe our enhanced strategic clarity, decisive actions, and disciplined execution will position the company to deliver sustained growth off of our 2026 guidance expectations. Many of these actions are well underway, and they are already changing how we operate, giving us confidence that MGP will emerge better aligned, more resilient, and well positioned for long-term value creation.”
In an earnings call yesterday, Francis also told analysts the company anticipated category trends in the “near-term” would “remain below historical levels”.
Branded goods “rationalisation”
Speaking to analysts yesterday, Francis also said MGP had set up “a cross-functional portfolio management review process” for its Branded Spirits business.
As part of this, “as a first step”, MGP is looking to achieve “rationalisation of 20% of the portfolio’s tail brands”.
The CEO said: “We believe this new rigorous portfolio review process will help us make even clearer decisions about where we invest and where we protect to better position our brands across targeted consumer segments, channels, price points, and consumption occasions.” Later in the call, Francis added the move was not expected to impact its 2026 guidance.
In 2025, MGP’s Branded Spirits segment, which includes branded products like Penelope Bourbon and El Mayor Tequila, saw sales dip 1% to $63.4m due to “weaker sales of mid and value priced brands”.
In its fourth quarter, net income dropped to a loss of $134.6m, attributed “to a discrete, non-cash adjustment of $152.6m to lower the carrying amount of goodwill and indefinite-lived intangible assets in the Branded Spirits segment”.
