Jim Beam to idle Kentucky distillery as bourbon demand slows

Jim Beam will suspend production at its Clermont, Kentucky, distillery for a year as sluggish spirits sales, costly import tariffs, and changing consumer tastes weigh on the world’s largest bourbon maker.

While the company said it will use this time to invest in “site enhancements,” it acknowledged that demand has not met supply.

“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 said in a statement.

Jim Beam is owned by Suntory Global Spirits, an entity of Japan’s Suntory Group.

The closure – albeit temporarily – underscores the challenges faced by the spirits industry. A recent Gallup poll found that the number of adults who consume alcohol has dropped to a 90-year low, while an existing ban on U.S. spirit sales in Canada drove exports of American-made bourbon into Canada down 85%.

Exports to the UK and Japan each declined by more than 23%, while exports to the EU were down 12%. Canada, Japan, the EU and the UK accounted for 70% of all U.S. spirits exported in 2024. And as American whiskey inventory has tripled since 2012, exports have been critical to the industry to compensate for declining domestic sales.

“Total distilled spirits has weakened in the last 6 months or so, not dramatically, but it has,” said Brown-Forman CEO Lawson Whiting on the company’s most recent  earnings call responding to a question about holiday sales. “Our expectations for this holiday season are—we're trying to be optimistic, but at the same time, we are looking and seeing some of the macro trends that are tough."

Brown-Forman makes Jack Daniel’s, Woodford Reserve, and Old Forester bourbons.

While Diageo -- parent company of Johnnie Walker whiskey -- lowered FY26 sales forecasts to compensate for a weaker U.S. consumer environment “than originally planned for.”

“We are not satisfied with our current performance and are focused on what we can manage and control; acting with speed to drive efficiencies, prioritizing investment and adapting more quickly to an evolving consumer environment,” Diageo interim CEO Nik Jhangiani said.

For bourbon drinkers, the decision to trim new production at Jim Beam will not impact future supply with the Kentucky distilleries currently aging a record 16.1 million barrels of bourbon, the Kentucky Distillers’ Association says, up 27% from last year and the highest level since the repeal of Prohibition in 1933.

Shares of Brown-Forman (BF.A) (BF.B), and Diageo (DEO) are both lower on Tuesday.