Popular Pierce County whiskey distillery to close all of its tasting rooms
AI-generated summary reviewed by our newsroom.
- Heritage Distilling will close all tasting rooms and shift production to partners.
- Company cited rising state taxes, higher costs and declining alcohol demand.
- Company will cut costs, save over $2M and offer severance packages to employees.
Heritage Distilling Co. will close all of its company-owned tasting rooms including its Gig Harbor location by the end of the year, attributing the decision to a difficult economy, according to a company news release Oct. 23.
“This was an extremely difficult decision and one we did not make lightly,” said Justin Stiefel, co-founder and CEO of IP Strategy, in the news release. “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 behaviors, increasing costs and recently-enacted and proposed taxes at the state level made future investments in this part of our business operations unsustainable.”
Third-party partners will also take over the company’s spirits production, effective Dec. 31, the release says.
With this timing, the company is also getting ahead of many of their lease agreements up for renewal in 2026. Heritage believes “it is no longer prudent for the business to sign additional long-term leases on retail spaces,” Stiefel said in the release. He confirmed in a follow-up phone call Oct. 23 that the business also leases their tasting room space in downtown Gig Harbor.
What the space could become has already prompted conversation, as Stiefel said some people had already contacted them that morning for details on their Gig Harbor space.
“We’re going to work positively with whoever the next tenants will be,” he said.
In a statement posted to the city’s Facebook account, Gig Harbor Mayor Mary Barber expressed the city’s sorrow over the announcement and described Heritage Distilling as “one of Gig Harbor’s best homegrown success stories.”
“It is always a loss when a business leaves our city, but the news that Heritage Distilling Company, Inc will be closing its tasting rooms and retail locations in Washington and Oregon hurts more than most,” she wrote. “ ... The Stiefels and their employees have become part of the fabric of our community, and their success has long reflected the innovation, pride, and entrepreneurial spirit that make Gig Harbor so special.”
Justin and Jennifer Stiefel founded the business in 2012, starting with a distillery in Gig Harbor. They opened their waterfront tasting room at 3118 Harborview Dr. in 2014, The News Tribune reported. Their other locations include distillery tasting rooms in Roslyn and Tumwater in Washington state and in Eugene, Oregon.
The business has since grown to become the largest craft distillery in Washington state, joining an increasing number of small distilleries across the nation, The News Tribune’s Kristine Sherred reported in 2022. The distillery’s Cocoa Bomb Chocolate Whiskey won “World’s Best Flavored Whiskey” by Whisky Magazine earlier this year.
Economic factors that influenced Heritage’s decision, according to their news release, include “increasing state taxes and regulatory burdens” in Washington and Oregon and consumers drinking less alcohol and choosing other options such as marijuana. The company also cited “input from investors and stakeholders” on their vision for the company’s future, and “legislative blocking of efforts to equalize taxation for low-proof RTDs with wine and beer.” Those are lower alcohol-content, ready to drink beverages such as canned cocktails.
Justin Stiefel offered more examples via phone Thursday. Rising fuel costs have made it more expensive to transport items, he said. State law also restricts the revenue that distilleries can earn from selling cocktails to 30% of their overall gross revenue in the tasting room for the calendar year, which has kept Heritage from raising prices despite inflation, he said. He called these factors and others “death by a thousand cuts.”
The business’s plans in the new year include focusing on “brand development, product innovation, continued Direct-to-Consumer sales, wholesale expansion, partnerships with more tribes for branded tasting rooms in and near their casino properties under the Tribal Beverage Network (TBN) program, and contract production partnerships,” the release says.
The company expects to save over $2 million annually after accounting for the loss of spirits revenue and the reduction of operating costs following the closures. Heritage is offering severance packages for employees who choose to remain until their separation date that include four to eight weeks of severance pay, compensation for accrued sick time and continued health coverage until the end of the month that they leave the company, per the release.
“The Company will host a multi-week ‘Last Call’ celebration through the end of the year to thank loyal customers, Cask Club members, and the community for 13 years of support,” the release says. The tasting rooms will maintain their normal operating hours during this period, Stiefel said Thursday.
“ ... we are thankful that they supported us,” Stiefel said of the Gig Harbor community. “We’re thankful that people recognize the value we tried to bring and the interesting approach to business and the partnerships we tried to create.”
Editor’s note: This story has been updated with additional comments from Heritage Distilling Co. co-founder Justin Stiefel.
This story was originally published October 23, 2025 at 11:39 AM.
