The Monthly Mash: November 2019 Part I

The Monthly Mash
Volume 4.11
Member-Owned, Industry-Driven

ACSA Mission:
To elevate and advocate for the community of craft spirits producers.

From the Desk of Margie A.S. Lehrman,

Chief Executive Officer

Dear Friends in Our Craft Spirits Industry:

With Thanksgiving only a day away, this provides the perfect backdrop to say THANK YOU (and the list is long) to our members; supplier/sponsors; the folks that distribute and the premises that sell our spirits; TTB for soliciting our thoughts on modernization; members of Congress for believing in us and cosponsoring legislation for FET relief; ACSA committee members; and ACSA’s elected Board of Directors. Together, we are shaping the industry even if it is one step at a time.

When I joined ACSA in 2015, TTB had issued around 1,700 DSPs. Fast forward to today and TTB has issued almost double that amount with over 3,200 DSPs now confirmed. The growth of craft spirits in volume as a percentage of overall U.S. spirits is up from 1.5% in 2013 to almost 4% in 2019. Craft spirits is also up from 1.8% in value in 2013 to almost 6% in 2019. Impressive, right?
There is no time to stand still. And, we are not.

Plenty more work confronts us if we hope to accelerate growth and develop a business-friendly environment. To that end, the Board of Directors will be meeting in just a couple of weeks to further develop and refine our strategic plan.

What else does that mean? We will continue to seek and offer new benefits, such as the complimentary TIPS online training (just released to ACSA members in time for the holidays)! We’ll continue to push hard on FET relief until Congress recesses next month. Read below to see where that legislation now stands and how you can help us PUSH on Dec. 5. We will continue to offer some of the best, most-customized education for the craft spirits producer in the form of webinars and convention education. Our Craft Spirits magazine will continue to offer the news you need to stay informed from trends to technical advancements. Explore trends with one of our long-time sponsors, Saverglass. We can even help you daydream about your next travel adventure—follow us on a vicarious journey to Alaska.

Here’s wishing each of you a truly Happy Thanksgiving.

Cheers,

Margie

ACSA Battles for FET Relief

The Federal Excise Tax (FET) reduction enacted in 2017 will expire on December 31. We have less than one month to get the reduction enacted again or made permanent. ACSA is working overtime to get this done by the end of the year.

In Congress, we have gathered an amazing amount of support. In the House of Representatives, 320 members have co-sponsored H.R. 1175, which would make permanent the reduced rates for craft distillers. Also, close to three-fourths of the U.S. Senate support S.362, a companion measure to the House bill. This is largely due to the extensive grassroots efforts distillers have put into this process, including  a coordinated Day of Action that resulted in more than 10,000 engagements from over 3,000 individuals calling on their members of Congress to prioritize the passage of the bipartisan legislation. Read more below about the next Day of Action planned for Dec. 5.

The House Committee on Ways and Means reported out a bill in June extending the FET reduction for one more year, along with many other expiring tax provisions. Per the Constitution, revenue bills originate in the House. Unfortunately, the bill has yet to go to the full House for consideration, but it is widely known that there are backdoor negotiations ongoing between the House and Senate.

Funding for the government will expire on December 20. It is believed that this will be the final opportunity before year-end to carry tax extensions.

In recent weeks, ACSA’s CEO Margie A.S. Lehrman and ACSA’s Public Policy Counsel, Jim Hyland, have met with many of the key players on the tax issue, including both the Senate and House Chairman of the tax writing committees, Senator Chuck Grassley (R-IA) and Congressman Richard Neal (D-MA), respectively. They have also met with leadership of the House and Senate, such as Senators Roy Blunt (R-MO) and John Thune (R-SD), the number two Republican in the Senate, as well as Steny Hoyer (D-MD) and Cheri Bustos (D-IL), key leaders with democrats in Congress. ACSA is literally strategizing with the senior members of Congress on how to get this done.

While there is widespread support for our provisions, the Congressional negotiators are trying to get to a deal on the tax extenders, but they remain far apart on other unrelated issues. Right or wrong, most of it centers on the divide of the progressive wing of the Democrat Caucus seeking more tax fairness for low to moderate income earners as an answer to the broad corporate tax reduction of the Trump tax bill and Republicans who likely would support a straight extension on many expiring provisions.

The ACSA Board will be coming to Washington in mid-December to once again press for a continuation of the FET reduction. We intend to leave nothing on the field in our efforts to get this done. We will be working up until midnight on December 31 if we have to get this completed for our industry.

Call Congress on Dec. 5 to Pass CBMTRA

The clock is ticking on reauthorization of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) and Dec. 20, the day Congress is expected to recess, is the last opportunity for action.

 

December 5, known as Repeal Day, marks an excellent time to remind Congress about the urgency of passing CBMTRA and making tax parity permanent.

As you well know, the current lower Federal Excise Tax (FET) for craft distillers will expire on Dec. 31—in just a few weeks. Please call your Sen ators (202-224-3121) and local Member of Congress (202-225-3121) on Dec. 5 and urge them to co-sponsor and pass S.362 and H.R. 1175.

NOW IS THE TIME TO ACT for FET relief.

 

Here are some key talking points:

  • In 2017, Congress enacted, for the first time, tax parity for spirits and provided a reduced Federal Excise Tax (FET) for craft distillers. Tell your elected legislator that before passage of H.R. 1 in December of 2017, it was a one-size-fits-all flat tax rate on large and small distillers.
  • The reduced FET will expire on December 31, 2019. It is urgent Congress acts before that date. 
  • The tax relief is working just as Congress believed it would. Craft distillers are re-investing in American manufacturing. We have hired new employees, purchased American made equipment and have increased purchases from local agriculture.
  • The growth of craft distilling is supporting main street, small business job growth, exports, tourism, rural and urban America economic development, and locally sourced products, the vast majority of which are made and sourced in the U.S.
  • Without the tax relief, we may need to lay off employees and our business growth will be put on hold. Many of our businesses will simply need to close.  
  • The legislation further helps craft brewers and vintners. This is the reason every major beer, wine and spirits group has endorsed these bills.


We’ve previously asked for your support and you’ve answered. It is CRITICAL that you again act. Thank you for being proactive in support of our efforts to make FET parity for you permanent.

New Benefit for ACSA Members

ACSA honors your membership and looks for ways to provide additional benefits. Partnering with TIPS (Training for Intervention Procedures), each ACSA member will receive one complimentary registration for an eTIPS certification course, a $40 value.

Additional passports can be offered to your entire team for a reduced ACSA rate. Similarly, if your state requires in-person training, discounts apply. If you are interested in taking advantage of this benefit to educate your servers and emphasize a responsible drinking culture, before the holidays, contact  Membership@americancraftspirits.org to obtain your discount code or get more information about this program.

Discover World-Class Educational Presentations

We are finalizing the schedule for ACSA’s 7th Annual Distillers’ Convention & Vendor Trade Show in Portland, Oregon. If you have yet to register, click the links below to join us March 29-31, 2020. Here is a snippet of the educational presentations we have in store.

The Science of Whiskey Maturation

 

Presenter: Jason Parker, Copperworks Distilling Co.

This session will cover types of wood used for barrels; why oak works so well (micrograms of tyloses); medullary rays; sawing patterns for a barrel stave; cellulose; hemicellulose; lignins; tannins; lactones; toasting vs. charring; maturation aspects (additive, subtractive, transformative); warehouse conditions; and entry proof.

The learning objectives for this presentation are to understand which barrel to pick for a desired flavor; how warehouse conditions affect maturation; and how to design a whiskey using barrel flavors.


Cash Flow Management and Optimization

Presenters: Michelle Howard and Amy Julian, Brown Smith Wallace LLC

Cash flow is critical to the success of any business. Businesses that understand and manage their cash cycle enable better business performance. Cash management as a competitive advantage will set your business apart from the competition. Cash management is not easy. It involves many variables and processes that must be controlled. Formalizing your approach to cash flow will unlock liquidity trapped on your balance sheet and enable growth.

This session will help you:

Understand your accounts receivable and create a strategy to improve timely cash receipts; standardize and streamline your payable processes and working capital initiatives; map current relevant processes to help you identify KPIs; improve processes through identification of pain points where manual intervention or other issues are impacting timeliness and accuracy of data; identify credit and past due collections from your customers; identify the value of your accounts payable due in the next 30 days and create annual projections; align terms for receivables and payables; establish polices for managing cash; and build a strong governance plan that is sustainable.


Innovative Avenues to Accelerate Growth for Craft Brands

Presenters: Emily Pennington and Harry Kohlmann, Park Street

This two-part, comprehensive panel series will explore in depth the available channels a craft brand can utilize for distribution.

Part one of the series will feature experts who represent various distribution models including traditional wholesalers (e.g., Southern, Breakthru, RNDC), a wine-focused wholesaler with a craft spirits division (e.g., Heritage, Opici, Winebow), and a distiller who has experienced both aligning with a national distributor and selected wholesalers on a per state basis (e.g. Sagamore Spirit, Cooper Spirit).

Part two of the series will feature experts who represent innovative distribution models including e-commerce (e.g., Drizly, Minibar), exclusive big box partnerships (e.g., Total Wine), and a distiller with successful self-distribution (e.g., Garrison Brothers). This series will explore the advantages and disadvantages of each strategy.

 

Master Classes Open for Registration

In addition to the previously mentioned educational presentations, registration is now open for our master classes.

New Distillery Start-Up 101
In the beginning stages of planning your distillery? This overview will cover the basics of the industry including: finding a lender; creating a business plan; selecting your site, equipment and material; safety and compliance; and sales and marketing.
$200 (members) & $350 (non-members)
Tasting and Sensory Class
This one-day course will start by examining the tasting biases that affect our judgements, and will also cover how to use tasting and sensory practices to ensure quality control, how to use barrels to target specific flavor development, and explore different varieties and flavors of malt.

$399 (members) & $699 (non-members)

Exhibitor Early Bird Rate Ends Soon


Are you an exhibitor looking to reserve your booth at a discounted rate? If you want to save over a hundred dollars on registration fees then book by the stroke of midnight on Saturday. To learn more about your booth options with an interactive walkthrough of the new trade show floor, contact 
teresa@americancraftspirits.org.

Happy Thanksgiving!


In celebration of Thanksgiving, ACSA offices will be closed Nov. 28-29. We wish you a happy holiday!

A Sneak Peek of the Next Craft Spirits Magazine

Here’s what you can expect to find in Issue No. 3 of Craft Spirits magazine, coming in mid-December.

SPECIAL REPORT: FORESIGHT IS 2020: The year ahead in craft spirits
We look at what the market has in store for every major spirits category in 2020.
• Whiskey
• Gin
• Vodka
• Brandy
• Liqueurs
• Agave Spirits
• Rum
Other Features
Bullish About Beer Barrels

Why craft spirits producers have been gravitating toward barrels that previously held beer to finish their spirits.

Member Profile: American Shochu Company

International Feature
: The Luxembourg Fruit Brandy Tradition
The small European country tends to get overshadowed by the distilling traditions of its neighbors, but Luxembourg’s fruit-brandy-making heritage should not be overlooked.

Distilling Destinations
: Western Pennsylvania
The greater Pittsburgh area has become hotbed for rye whiskey production. What else is going on in the western section of the Keystone State?

Plus much more!

And in case you missed it, click here to read our October issue.

Subscribe to Craft Spirits TV on YouTube

We recently launched Craft Spirits TV on the ACSA YouTube channel. If you haven’t already watched, click here to see the latest video , hosted by Jeff Cioletti, the editor in chief of Craft Spirits magazine. And be sure to subscribe so you don’t miss future episodes.

Share Your Story With Craft Spirits Magazine

 

Do you have exciting stories to share about your distillery? We’re on the lookout for news for future issues of Craft Spirits magazine.

Keep us posted on new products, events, trends, tips and more by sending us a note at  news@americancraftspirits.org .

©2019 American Craft Spirits Association; All Rights Reserved. Member Owned, Industry Driven.

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