Jim Beam Halts Production as Whiskey Market Struggles

Jim Beam, the country’s largest maker of bourbon, has announced a one-year pause in production at its flagship facility in Clermont, Ky., a stunning move that underlines the immense challenges facing the American whiskey industry after more than two decades of rapid growth. The decision is the latest in a series of production cuts, layoffs and financial crises across the wine, beer and spirits sector, which has seen sales drop by about 5 percent over the past year.

The situation will likely get worse as 2025 draws to a close: At the end of October MGP Ingredients, which distills whiskey on contract for other brands, reported a 19 percent drop in sales for the third quarter. In September, the global drinks company Diageo paused distillation at its Cascade Hollow facility in Tullahoma, Tenn., which produces George Dickel Tennessee whiskey. In January, Brown-Forman, the maker of whiskeys like Jack Daniel’s and Old Forester, announced it was laying off about 650 employees, or 12 percent of its work force, in the face of declining demand. And over the last year several large whiskey companies have gone into receivership.

The sudden, steep decline in bourbon sales comes after more than 20 years of expansion in American whiskey, which proved especially popular during the pandemic. Much, but not all, of that whiskey came from big legacy producers like Jim Beam. But it also came from a relatively new category of distilleries that produce on contract for customers and investors, who saw the quick growth in whiskey as an easy and fun way to make money.

Analysts cite recent economic challenges related to President Trump’s tariffs. A backlash from Canadian consumers and provinces, which control alcohol sales, has virtually stopped the sale of American whiskey in what was once among the industry’s biggest export markets. Overall, exports of American whiskey are down about 9 percent from 2024. At the same time, the president’s unpredictable approach to tariff policy has made it difficult to expand into new markets, especially South Asia, sub-Saharan Africa and Southeast Asia, three regions that major American whiskey distillers had once hoped to turn into reliable destinations for millions of bottles a year.

Given the continued economic and cultural headwinds, the pause at Jim Beam is both a sign of how bad things have gotten for the industry and a harbinger of more shutdowns to come.

“It’s a sad day for bourbon, to be honest with you,” Mr. Minnick said. “For this to happen is a real punch in the gut.”