After 90 years of bourbon, Jim Beam's Clermont distillery goes silent in 2026

Production will continue at other facilities as Kentucky's bourbon industry grapples with too much whiskey and too few buyers.

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One of Kentucky's most iconic bourbon producers is hitting pause.

Jim Beam announced this week it will halt distillation at its campus in Clermont throughout 2026, marking a significant shift for a distillery that's been producing bourbon at that location for over 90 years. The company says it's using the opportunity to invest in "site enhancements" while adjusting to changing market realities.

"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. Production will continue at Jim Beam's Fred B. Noe craft distillery in Clermont and its larger Booker Noe facility in Boston, Kentucky. The visitor center at the James B. Beam campus will remain open for tours and dining.

What the company didn't say in its statement speaks volumes about where the bourbon industry finds itself heading into 2026.

A historic surplus

Kentucky is currently sitting on more bourbon than it has at any point since Prohibition ended. The Kentucky Distillers' Association reported in October that the state's warehouses are now aging a record 16.1 million barrels- more than triple the amount held just 15 years ago. That's roughly three barrels for every person living in Kentucky.

The math is straightforward: bourbon production increased by 475% between 1999 and 2022, but sales only grew about 300% during that same period. For years, the industry bet big on bourbon's boom continuing indefinitely. Now, those chickens are coming home to roost.

"Through August, whiskey distillers had produced 55 million fewer proof gallons this year than a year ago, a decline of 28%," according to the Lexington Herald-Leader. Jim Beam isn't the only one pumping the brakes- Diageo pulled back production at a Kentucky distillery in March, and several smaller distilleries have filed for bankruptcy this year as the oversupply crisis intensifies.

What changed?

The bourbon boom that defined the last two decades was powered by a perfect storm of factors: craft cocktail culture, international demand, and bourbon tourism that turned Kentucky's distilleries into destination experiences. During the pandemic, Americans stuck at home experimented with cocktails, many of them bourbon-based, driving sales even higher.

But the party seems to be winding down. U.S. whiskey volumes fell 4.1% in 2024, the first sustained decline in over 20 years. Younger consumers, particularly Gen Z, are gravitating toward lower-proof spirits, tequila, and ready-to-drink cocktails. There's also growing interest in low and no-alcohol options, with some younger drinkers opting for cannabis instead.

Add to that the tariff situation. Canada began boycotting American spirits in March in response to the Trump administration's trade policies, causing U.S. spirits exports to Canada to plummet 85% in the second quarter of 2025. The European Union has threatened to reinstate a 50% tariff on American whiskey if trade disputes aren't resolved. For an industry that exports nearly 30% of its bourbon, these aren't minor headaches.

And then there's the tax burden. Kentucky distillers pay taxes on aging barrels- and with 16 million barrels sitting in warehouses, that bill has become crushing. The Kentucky Distillers' Association says state barrel taxes will cost distillers $75 million this year, a 163% increase over the past five years.

The challenge of planning years ahead

Here's the unique problem bourbon makers face: they have to make production decisions today based on what they think consumers will want four, eight, or even twelve years from now. Jim Beam's flagship bourbon requires at least four years of aging before it hits shelves. Premium offerings take much longer.

Kentucky Distillers' Association President Eric Gregory put it bluntly in October: "Long-term planning for a product that won't be ready for years is already tough enough. We need the certainty of tariff-free trade for America's only native spirit to flourish."

Right now, distillers are trying to course-correct after two decades of aggressive expansion. The industry built new facilities, expanded existing ones, and invested billions based on projections of endless growth. When the growth didn't materialize as expected, the result was predictable: too much bourbon chasing too few buyers.

Not all doom and gloom

Before bourbon lovers panic about shortages, it's worth noting that the premium segment is actually thriving. High-end bourbon like age-stated bottles and limited releases saw sales grow 18% in 2024. Brands like Pappy Van Winkle and Blanton's remain as sought-after as ever.

And bourbon tourism continues to boom. The Kentucky Bourbon Trail welcomed 2.5 million visitors in 2024, generating over $400 million in tourism revenue and helping sustain small towns across the state.

What's next?

Jim Beam says conversations with the union representing its workers are ongoing, and the company hasn't announced layoffs in connection with the production shift.

The pause at one of bourbon's most historic production sites is a clear signal that the industry is recalibrating after years of growth. Whether 2026 marks a brief breather or the beginning of a longer correction remains to be seen.

What's certain is that bourbon isn't going anywhere- Kentucky's warehouses are full, tourist visits are strong, and global interest in American whiskey remains robust. The industry is just learning, once again, that what goes up must eventually level out. And when you're dealing with a product that takes years to age, you'd better get your timing right.

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