Kelsea Ballerini was pretty much finished with her eponymous album when she came up with this track. The singer explained to Billboard
that she was down in Florida and went to dinner with songwriters Jesse Frasure, Hillary Lindsey, Ashley Gorley, and Steph Jones, to celebrate being done with the record. They had a good amount of wine, came back and started writing "Hole In The Bottle" for fun. "It was just this fun, collaborative jam session," she added. "We were totally free to be silly."
The next morning, they all listened to the demo and even though it was a mess, Ballerini recognized its potential. The singer realized she'd never recorded a drinking song before and decided to make it a late addition to her album.