LOUISVILLE, Ky.—The beating heart of Kentucky’s bourbon country sits inside a towering building that bills itself as “The Hardest Working Still in America” in large white letters. It can churn out a barrel of Jim Beam whiskey roughly every 93 seconds.

Since January the 65-foot-tall still has been on a break. And that break is slated to last until at least 2027.

Across the roughly 430-acre campus south of Louisville, warehouses are jam-packed with barrels full of dark-brown liquor that may not have buyers. Distillery workers have been reassigned to bottling, and the company is experimenting with new ways to sell its bourbon, including pushing flavored varieties. Jim Beam, which predates the Civil War and weathered Prohibition—and is now owned by Japan’s Suntory Holdings—is fighting through another downturn.

“It’s very emotional,” said Freddie Noe, an eighth-generation member of the brand’s founding family and the master distiller at Jim Beam, the world’s bestselling bourbon brand. “We’ve had very critical conversations and we’ve made decisions for the long-term success of our family’s products.”

The birthplace of bourbon is swimming in it. The rolling, forested hills of Kentucky’s bourbon country are ground zero for the slowdown afflicting the U.S. alcohol industry. Distilleries of all sizes have laid off staff, or shut down altogether. Even barrel suppliers are feeling it.

More Americans are joining the ranks of the sober-curious, and inflation has prompted some steady drinkers to cut back. GLP-1 weight-loss drugs are having the same effect. Cannabis and THC beverages are widely available, offering a hangover-free buzz. And the Trump administration’s trade wars have dented U.S. alcohol exports.

Most industry players didn’t see the collapse coming. It all started during the Covid-19 pandemic, when Americans heavily stocked their bar carts during lockdowns with bourbon and other spirits.

Private-equity firms and banks backed contract distillers, which piled into the market expecting years of robust demand.

But after peaking in 2022 at 31.2 million nine-liter cases, consumption of American whiskey—including bourbon, Tennessee whiskey, rye and single malts—has slowed. The Distilled Spirits Council , an industry group, said about 30 million nine-liter cases were sold in 2025.

Kentucky is sitting on roughly 16.1 million barrels of bourbon —the equivalent of around 300 million cases—according to the Kentucky Distillers’ Association. That’s the largest reserve ever, enough to last as much as 10 years, according to industry estimates.

Noe grew up around the Jim Beam distillery, and his family’s rustic home built in 1911 remains on the campus. He said he feels responsibility for the workers who make his family’s bourbon. On a rainy March morning, he recognized and chatted with a worker loading barrels of Jim Beam into a storehouse.

“Paul knew my granddad,” said Noe. “I’m an only child. These people here are literally all my family.”

Buzz to bust

Kentucky is where 95% of the world’s bourbon is made, according to the state distillers’ group. There are 125 licensed distilleries, according to state data, more than at any point since Prohibition’s repeal in 1933.

The recent bourbon craze kicked off in 2010, when a resurgent cocktail culture helped elevate the Old Fashioned and craft drinks in bars from London to Los Angeles. It was a boon for Kentucky, bringing more infrastructure, fancy steakhouses and transplants, some of whom hoped to strike it rich making what the industry calls America’s native spirit.

Dixon Dedman, 44, is Kentucky-born and -raised. For five generations, his family has owned and operated the Beaumont Inn, famous for its corn pudding.

In 2010 Dedman started to resurrect his great-great-grandfather’s Kentucky Owl bourbon brand as a passion project. “If no one bought any bottles,” he said, “I would have a bunch of whiskey to pour at my kids’ wedding someday.”

Craft bourbon brands built buzz in speakeasies like Louisville’s Hell or High Water, and whiskey influencers started popping up online. Dedman’s brand gained a local cult following and saw its sales grow, and within a few years Stoli Group came knocking.

The storied vodka maker acquired Kentucky Owl in 2017 with plans to make it a national brand and take it abroad. “Upon sitting down with the owners and hearing the story, we became really enthusiastic about revitalizing the brand and concluded that this would be the bourbon to anchor a whiskey line,” said Dmitry Efimov, then-chief executive of Stoli parent S.P.I. Group.

Stoli also saw a chance to tap in to growing tourism interest in the Kentucky Bourbon Trail—a series of distilleries that run from Louisville to Bardstown and beyond. The group, which primarily produces its liquor in Latvia, bought up the depleted Cedar Creek Quarry in Bardstown, Ky., and planned to redevelop it into the Kentucky Owl Park. 

The 420-acre site was to include a hotel, bar, event center and giant pyramids to house aging spirits. Stoli hired Japanese architect Shigeru Ban to design it, and a train was expected to link the park to the greater bourbon trail.

The $150 million project was put on hold before Stoli officially began construction. Dedman stepped away in 2020, when Stoli’s vision for the company no longer aligned with his, he said. He started his new bourbon brand 2XO in 2022. Declining postpandemic demand weighed on Stoli’s business. That, along with factors like a cyberattack and a major disagreement with creditors, contributed to a Chapter 11 bankruptcy filing for Stoli’s U.S. distribution company and the company that owns the barrels aging Kentucky Owl.

In October, a judge rejected a restructuring plan that would have relied heavily on using Kentucky Owl’s bourbon as collateral to pay down debt.

Over a barrel

Under U.S. law, bourbon must be distilled from a mix of grains containing at leas t 51% corn , and aged in new, charred barrels of oak. Kentucky bourbon must physically be aged in that state for at least a year .

Barrel making is a big business. But like distillers, some of the makers of those barrels are struggling to find buyers for their products.

The barrels that cooperages across the country produce for bourbon-makers no longer fetch the prices they once did. At the peak—in 2023 and 2024—distillers were paying upward of $285 per barrel. Since then, prices have dropped significantly, industry players say.

The barrels’ first life is to age bourbon. After that, they are often resold to distillers in Scotland or Ireland, where they can find a second act storing scotch, rum or other spirits, over a lifespan of some 80 years.

Distilleries were selling used barrels on the resale market for more than $200 in at the end of 2024. Today, they’re going for around $50, as liquor demand has also plummeted.

Some whiskey makers have begun to sell their barrels for use as garden planters.

“If you got into this barrel business thinking you have never-ending growth and it’s a seller’s market, you’re gonna be very disappointed,” said Brad Boswell, the chief executive of Independent Stave Company, which provides barrels to wine and spirits businesses.

Stocking up

Michael Myers, a former fashion photographer, started Distillery 291 in Colorado Springs, Colo., after fleeing New York City in the wake of the 9/11 terrorist attacks.

The brand’s small-batch bourbon, which retails for around $75 per 750 ml bottle, built a cult following and got a lift during the pandemic. But as people pulled back on drinking, Distillery 291’s sales slid, and inflation has made craft spirits less affordable.

“People didn’t have as much cash to spend on things,” said Myers, and dedicated fans are saving money by drinking the whiskey they already have.

Myers said his business hit bottom last year, and 291 was in survival mode. He cut production and reduced his staff to 12 from 30. After these measures he’s seeing early results of growth so far this year.

Woodford Reserve maker Brown-Forman is cutting back too. The company, which got its start as a distiller in 1870 in Louisville and is best known for its Jack Daniel’s Tennessee Whiskey, said last year would lay off 12% of its 5,400-person workforce in response to weakening sales.

The cuts were supposed to yield $70 million to $80 million in savings. In a recent investor call , the company said that it was still feeling the pain of Americans pinching pennies, along with plummeting prices for barrels it sells to other spirit makers.

In Louisville, Brown-Forman closed the cooperage that made barrels to house its spirits, which also include Old Forester bourbon. The company said it planned to get more than $30 million from the sale of the cooperage.

Brown-Forman has also considered a more drastic measure: merging. In March the company confirmed reports that it was in deal discussions with French spirits company Pernod Ricard. In late April both companies said they had ended discussions after failing to strike a deal. At the time, Brown-Forman said it planned to focus on growing its geographic footprint, building brands and becoming more efficient.

Louisville-based Sazerac, which produces Buffalo Trace and other whiskey brands, has also expressed interest in a deal with Brown-Forman.

Prohibition as prologue

To weather the alcohol business’s current downturn, Jim Beam is taking a page from the Prohibition era.

During the U.S. government’s nearly 14-year federal ban on alcoholic beverages, James Beauregard Beam took a shot at coal mining and citrus production. With alcohol consumption ebbing again, the brand is now experimenting with a zero-alcohol citrus cocktail it calls Citrus Sin—in homage to Beam’s Prohibition-informed philosophy that not promoting agriculture and community employment was a sin.

Jim Beam is trialing the drinks at Formula One car races across the world. It is the first time since Prohibition that an alcohol-free product has carried the Jim Beam brand.

To help move its barrels of stored bourbon, Jim Beam encouraged folks to make their own bourbon-and-lemonade cocktails , recruiting comedian Kenan Thompson to pitch the products. Bottles of pineapple-infused bourbon have proved to be popular with younger tipplers.

After pausing distilling operations in Clermont, the company moved most of its production to its Booker Noe facility just down the street, named for Noe’s grandfather. The brand continues to make some whiskey in its small-batch craft still at Clermont.

“There’s a lot of emotion that goes on here day in and day out,” Noe said.

Jim Beam’s Clermont campus has diversified too. The brand is advertising that its facilities remain open to visitors, who totaled around 150,000 last year.

The attractions link back to its place in bourbon history, near Jim Beam Lake, a water source for the spirit. Inside a tin black building with brands like Booker’s, Knob Creek and Jim Beam written on the outside, visitors can see a replica of the 1939 Cadillac Beam himself used to transport his family’s yeast, which the company said still is used to make bourbon today.

“We are not shutting down,” said Noe. “The bourbon community has done nothing but grow and welcome people in. That opportunity is still there.”