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The sudden, steep decline in bourbon sales comes after more than 20 years of expansion in American whiskey, which regularly reached 5 per cent in annual growth. It went from about $1.4 billion in sales in 2004 to about $5.2 billion in 2024, according to data from the Distilled Spirits Council of the United States, a trade group.
American whiskey proved especially popular during the pandemic. Consumers stuck at home with spare cash and time fuelled an explosion in collecting and buying bottles through auctions and online via informal (and often illegal) markets.
In response, distilleries boosted production, putting aside millions of barrels to age, announcing multimillion-dollar expansions and flooding the market with new products. Today there are an estimated 16.1 million barrels of whiskey ageing across Kentucky. A standard barrel holds 200 litres, though a significant amount is lost to evaporation during ageing.
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.
It was likely, industry experts say, that a correction was in order as retailers and consumers, flush with inventory, slowed down their purchases and the market returned to normal after the pandemic buying spree.
Analysts also cite recent economic challenges related to President Donald 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 per cent from 2024, according to the Distilled Spirits Council.
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 South-East Asia, three regions that major US whiskey distillers had once hoped to turn into reliable destinations for millions of bottles a year.
Consumer behaviour has also changed rapidly in recent years as the first members of Gen Z reach drinking age.
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Polls show that not only are young consumers drinking less, but they are trading up as well, choosing high-proof, more expensive bottles to drink sparingly. That is a big problem for Jim Beam, which relies heavily on its inexpensive, lower-proof White Label brand for sales.
“The data show that people don’t want 800-proof whiskey like Jim Beam White Label,” said Fred Minnick, a whiskey expert and the author of the forthcoming book Bottom Shelf: How a Forgotten Brand of Bourbon Saved One Man’s Life. “What they continue to buy are elevated brands.”
That explains why, even as Jim Beam and Jack Daniel’s pull back, companies like Sazerac, which makes luxury whiskeys like George T. Stagg and Pappy Van Winkle, continue to grow. In October, Sazerac announced a $1 billion expansion, primarily at its Buffalo Trace distillery in Frankfort, Kentucky.
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,” Minnick said. “For this to happen is a real punch in the gut.”
This article originally appeared in The New York Times.
