Jim Beam, the venerable bourbon brand with nearly 230 years of history, is making a move that has sent ripples through Kentucky and the wider spirits industry: it will halt bourbon production at its flagship Clermont, Kentucky distillery for at least one year starting in 2026. The company announced the decision on December 22, 2025, citing the need to invest in improvements at the historic site, but the pause comes at a moment of mounting challenges for American whiskey makers at home and abroad.
The bottling and warehouse operations at the Clermont facility will remain active, as will the James B. Beam Distilling Co. visitors center and restaurant—so fans can still visit, taste, and learn about bourbon’s storied past. Meanwhile, Jim Beam’s larger distillery in Boston, Kentucky, will keep its doors open and continue producing the brand’s signature whiskey. According to a company spokesperson for Suntory Global Spirits, Jim Beam’s parent company, "We are always assessing production levels to best meet consumer demand and recently met with our team to discuss our volumes for 2026." The company also emphasized that employees at the Clermont distillery will be reassigned within the company, with no layoffs planned at this time, a claim confirmed by the local United Food and Commercial Workers International Union chapter.
Still, it’s a bittersweet moment for bourbon lovers. The Clermont distillery is responsible for several fan favorites, including Knob Creek and Old Overholt Rye Whiskey, according to the Jim Beam website. The pause in production is an unusual step for a brand so closely tied to Kentucky’s identity—after all, about 95% of all bourbon made in the U.S. comes from the Bluegrass State, and the industry supports more than 23,000 jobs and brings $2.2 billion annually to Kentucky’s economy, as reported by the Kentucky Distillers’ Association.
Behind the scenes, bourbon makers like Jim Beam are facing a perfect storm of economic pressures and shifting consumer habits. The whiskey business has always required a gambler’s patience: Jim Beam’s flagship bourbon, for example, needs at least four years of barrel aging before it can be bottled and sold. That means decisions made today won’t show their true results for years to come—a tricky prospect when the market is so unpredictable.
One of the biggest headaches for distillers right now comes from beyond U.S. borders. According to the Distilled Spirits Council of the United States (DISCUS), American spirits exports fell 9% in the second quarter of 2025 compared to a year earlier. The most dramatic drop was in Canada, where imports of U.S. spirits plummeted 85% in the April-through-June quarter, a nosedive driven by ongoing trade tensions and a boycott that followed political disputes between the two nations. The pain doesn’t stop there: exports to the UK and Japan also dropped by more than 23%, and exports to the European Union were down 12% in the same period.
Chris Swonge, CEO of the Distilled Spirits Council, summed up the industry’s anxieties in an October statement: "There’s a growing concern that our international consumers are increasingly opting for domestically produced spirits or imports from countries other than the US, signaling a shift away from our great American spirits brands." The international market, DISCUS noted, "is especially critical for American Whiskey producers, who are facing stagnating domestic sales and record-high inventory levels."
Indeed, the numbers tell a story of boom and, more recently, bust. Between 2003 and 2023, American whiskey sales in the U.S. soared by 132%, reaching 31 million nine-liter cases, according to DISCUS. But after years of growth, the tide began to turn in 2024. Sales started to slip, with a 1.1% decline attributed by DISCUS to high prices and consumer strain. The situation worsened in 2025, as Brown-Forman—the company behind Jack Daniel’s—reported a 62% drop in net sales in Canada for the six months ending in October 2025, blaming "volumetric declines" in its American whiskey portfolio.
And it’s not just international sales that are lagging. American drinking habits are changing, and not in bourbon’s favor. Domestic alcohol consumption has been on a downward trend, with consumers increasingly reaching for ready-to-drink beverages or skipping alcohol altogether. Factors like the rising popularity of recreational cannabis and the spread of weight loss drugs may be playing a role, as well as a growing interest in sobriety. A Gallup survey from August 2025 found that 53% of Americans now believe that drinking in moderation—defined as "one or two drinks a day"—is bad for health. The same poll revealed that self-reported drinking rates have dropped steadily, from 62% in 2023 to 58% in 2024, and finally to 54% in 2025.
With more than 16 million barrels of bourbon aging in Kentucky warehouses as of January 2025—over three times the amount from 15 years ago—the industry suddenly finds itself with a glut of product and fewer buyers, both at home and abroad. The Kentucky Distillers’ Association estimates that this surplus is the result of years of optimism and expansion, as distillers sought to capitalize on bourbon’s global renaissance. But the current climate has forced a reckoning, and Jim Beam’s decision to pause production is the most visible sign yet that even the biggest names in bourbon can’t escape the new realities.
Despite these headwinds, the company is trying to reassure fans and workers alike. The bottling, warehousing, and tourism operations at Clermont will continue, maintaining a connection to the brand’s history and community roots. And while the company hasn’t said exactly what improvements are planned for the distillery, the pause is being framed as a strategic investment in the future. "We are always assessing production levels to best meet consumer demand," a Suntory Global Spirits spokesperson reiterated to Business Insider, reflecting the delicate balancing act required in an industry where today’s choices echo for decades.
For Kentucky, where bourbon is more than just a drink—it’s a cultural touchstone and a major economic driver—the news is sobering. Yet, the state’s larger distilling ecosystem, including Jim Beam’s Boston facility and other producers, remains operational, providing some stability amid the uncertainty.
As the global spirits market continues to shift and Americans rethink their relationship with alcohol, the bourbon industry’s next chapter remains unwritten. But if history is any guide, Kentucky’s distillers will adapt, just as they have through Prohibition, global wars, and countless market swings. For now, though, all eyes are on Clermont, where the barrels will sit quietly aging, waiting for the world’s thirst for bourbon to return.