Distillery by-products, such as distillers' grains, stillage, and vinasse, are rich in organic compounds and offer immense potential for the recovery of bioactive substances, including polysaccharides, peptides, and polyphenols. The effective utilization of these by-products is critical for achieving long-term sustainability in the distillery sector. This review highlights advancements in extraction techniques, focusing on enzymatic, ultrasound-assisted, and microwave-assisted methods while also exploring emerging approaches such as supercritical fluid extraction, pressurized liquid extraction, pulse electric field, and synthetic biology. These innovative techniques address the limitations of traditional methods by improving extraction yields, reducing processing times, and enhancing sustainability. Additionally, the integration of machine learning and artificial intelligence is discussed as a promising avenue for optimizing extraction parameters and scaling up processes. By evaluating recent achievements and identifying new opportunities, this study aims to promote sustainable practices in the distillery industry, emphasizing economic feasibility, environmental impacts, and resource optimization for value-added product development.