MARY LOUISE KELLY, HOST:
If you are participating in Dry January this year, you're not alone. One of the biggest names in Bourbon, Jim Beam, has paused production at one of its distilleries in Kentucky. In a statement, the company says, we are always assessing production levels to best meet consumer demand, and the decision follows declines in both spirit exports and in alcohol consumption here in the U.S. Fred Minnick is a writer and bourbon expert. He is on the line from Louisville. Hey there.
FRED MINNICK: How are you doing, Mary Louise? It's good to hear your voice.
KELLY: It is great to speak with you on this January 2. Tell me about this distillery that has been paused. How big is it? What gets made there?
MINNICK: Yeah, so this is Jim Beam's kind of - you could say it's heart, it's pulse, but it's not actually its biggest distillery. The largest distillery for Jim Beam is actually called Booker Noe. It's about 7 miles south of this facility, which is the Clermont facility. The one that's getting paused for a bit, for a year, is actually - it's still top five in the country, top 10 in the world in terms of size, and it's producing a good deal of Jim Beam, all their mainstream products.
But it's not a total throw in the towel for the company. What it is more than anything is that they they are feeling the effect of consumer demand being down, exports being down, and they're making a business decision to shut it down so they don't get hurt, I would say, in another year or two and have to do layoffs.
KELLY: Yeah, their statement says this is a - not a closure but a pause for one year.
MINNICK: Yeah.
KELLY: Even people who don't drink bourbon understand that it's not made overnight. It takes years. So are they essentially betting that not only is demand down, Americans are drinking less, but it's demand is going to stay down, Americans are going to keep drinking less in the years to come?
MINNICK: Well, the big thing is that a lot of people are circling 2030 as the year that it kind of bounces back in a big way. This generation, the new drinking generation - first of all, millennials drink so much. They kind of set, like, a bad standard for the industry. There was just an assumption that everybody would drink as much as millennials as they turned 21.
KELLY: I'm a Gen Xer, and I will say millennials set bad standards in all kinds of ways. But moving on.
MINNICK: They really did.
KELLY: Moving on.
MINNICK: They love to drink bourbon, and they would drink all levels of bourbon. This new generation, they're not actually reaching for the $25 bottle, like Jim Beam White Label or Jack Daniels Black Label. They're wanting the 50, the $75 bottle. And so the thought is that this generation just doesn't have enough money yet to actually fulfill the things that they want to drink.
KELLY: Interesting.
MINNICK: So the thought is that in a few years, once this new generation gets a little bit more money in their pocket, you know, they're going to spend it on higher end bourbons.
KELLY: And then what about the other piece of this, the tariff piece, the fact that exports are not what they were a decade ago?
MINNICK: Yeah. Well, the thing about the tariffs is that the big punch in the gut was when Canada, all the provinces in Canada, began to boycott, not even throw on a tariff. They're like, you know what? We're just not going to carry American whiskey. Get it off the shelves. We're no longer going to reorder. That was something that we have not seen since the 1980s when they started doing tests for certain carcinogens, and if a spirit had a carcinogen in it, they would block it from coming into Canada.
KELLY: For those of us who do enjoy a bourbon from time to time, what kind of impact might we see?
MINNICK: Well, I think it's a consumer confidence impact. It's the largest brand in the entire category. But what we've actually seen is, in the downtrodden times, a lot of really small independent brands rise up. That's the real separator right now, is the big companies are always trying to develop new relationships where these smaller ones are like, hey, we don't care if you're 22. We want the 35-year-old who loves Bourbon already.
KELLY: So you sound, Fred Minnick, and I realize you're not a totally neutral observer here. Your work, your life is bourbon, but you sound bullish on the industry.
MINNICK: It's tough times, but I've covered this for so long. You know, it goes through these cycles. And the biggest threat to the bourbon industry is basically people leaving bourbon for other things. There's a giant movement of sobriety. There's also a movement of people going to cannabis. People are not leaving bourbon for vodka. So the space of alcohol in itself is hurting. Bourbon is doing really well in the alcohol space in comparison to how other categories are getting hit right now with the movement against alcohol.
KELLY: Fred Minnick, thank you.
MINNICK: Absolutely. Pleasure.
KELLY: He's the author of "Bourbon: The Rise, Fall, And Rebirth Of An American Whiskey." Transcript provided by NPR, Copyright NPR.
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