Craft Producer Distillery Growth, Export Growth, and Volume Growth Among Key Highlights at Annual U.S. Craft Spirits Industry Briefing
The ongoing Project, which seeks to quantify the number, size, and impact of craft spirits producers in the U.S., is an effort led by ACSA and Park Street with collaboration from key industry groups including the Alcohol and Tobacco Tax and Trade Bureau (TTB) and the National Alcohol Beverage Control Association (NABCA).
Key findings and highlights revealed during the briefing include the following:
- The U.S. craft spirits market volume reached more than 12m 9-liter cases in retail sales in 2020, growing at an annual rate of 7.3%. In value terms, the market reached $6.7 billion in sales, growing at an annual rate of 9.8%. U.S. craft spirits market share of total U.S. spirits reached 4.7% in volume and 7.1% in value in 2020, up from 2.2% in volume and 3% in value in 2015 and 4.6% in volume and 6.9% in value in 2019.
- The number of active craft distillers in the U.S. grew by 1.1% over the last year to 2,290 as of August 2021. Active craft distillers are defined as licensed U.S. distilled spirits producers that removed 750,000 proof gallons (or 394,317 9L cases) or less from bond, market themselves as craft, are not openly controlled by a large supplier, and have no proven violation of the ACSA Code of Ethics.
- Fueled by FET permanence, the U.S. craft spirits industry invested $759 million in their own businesses, an increase of more than $61 million from 2019. A landmark victory for the industry in 2020, The Craft Beverage Modernization and Tax Reform Act (CBMTRA), reduced the Federal Excise Tax on distilled spirits from $13.50 to $2.70 per proof gallon for the first 100,000 proof gallons removed from bond annually.
- Distillery and tasting room sales make up 47.7% of all sales for small craft distilleries (an increase year on year), while out-of-state sales make up 70.9% for larger craft distilleries. Direct sales at the distillery are important for all craft distillers but especially important for small craft producers (between 0 and 10,000 proof gallons removed from bond annually). Out-of-state business is particularly important for large producers (between 100,001 and 750,000 proof gallons removed from bond annually).
- Some states are “craftier” than others, with California, New York, Washington, Texas, and Pennsylvania leading the pack. Pennsylvania is now the 5th most concentrated state in terms of craft distilling, passing Colorado, which has historically been in the top five. Geographically, the market remains concentrated. The top five states by number of craft distilleries—CA (190), NY (180), WA (135), TX (135) & PA (117, up from 109 in 2020)—make up 33% of the U.S. craft distiller universe, and the next five states—CO (107), MI (88), NC (80), OR (77), and OH (73)—comprise an additional 18.6% of the market. The remaining states represent 48.4% of the market.