Facts and figures on the American distilleries industry, a multi-billion dollar industry.
Craft distilling used to be a niche industry in the US. That is no longer the case. Today it is a multi-billion dollar industry with almost 2,000 distilleries in operation across the county. Employment, market share, investment, total sales, and revenue are rapidly rising. Forecasts predict that this trend will continue for years to come.
Each year, the American Craft Spirits Association releases the Craft Spirits Data Project. It outlines the industry’s breadth, size, and growth over one year. As of 2018, 1,835 craft distilleries were reported as active. This was a 15.5% increase over the year. In that same time producers experienced a 23.7% retail growth in the number of cases sold. This was an increase of 7.2 million. There was also a 29.9% rise in overall sales totaling $7 billion.
By definition, craft distilleries are considered to be lower on the totem pole, however, their slice of the pie continues to grow. Employment in the industry, as a whole, averages just over 10 employees per each distillery. As of 2017 investment levels were $593 million. Since 2019, statistical data indicates a continued trend in upward growth.
Old and new distillers enjoy the fruits of their labor. From the construction of the Pacific, Milwaukee, and Chicago railroads and after prohibition, came bootlegging. In 1920, Temple, Iowa residents began producing their meticulously crafted rye whiskey. It was affectionately well known and aptly called The Good Stuff. To this day The Templeton Rye Distillery in Iowa produces high-quality rye whiskey. In 1982 the company celebrated 100 years of success in a three-day festival that honored a decorated history and the town’s citizens.
Since that time, the facility has expanded, allowing for higher production to meet growing demand. The organization’s honors include Best American Straight Rye, Best of Whiskey, Overall Packaging Design, and Gold Medal in the American Straight Rye Whiskey category. You can experience The Good Stuff for yourself at The Templeton Rye Distillery and Visitor Center.
In addition to the growth that craft distillers have experienced throughout the years, large producers are also reaping rewards. There has been an overall spirituous imbibing shift in America. Consider not only your local craft distilleries, but also the astounding sum of craft cocktail bars, and the thirst that consumers now have for premium and limited-edition spirits.
The Distilled Spirits Council of the United States February economic report showed shares up 35.5%. This revealed an upward trend from 29.3% back in 2006. At the same time, spirits supplier revenues increased to $27.5 billion overall in the US. The 5.1% climb represents a $1.3 billion uptick from the previous year.
The Craft Beverage Modernization and Tax Reform Act of 2019 contributes to anticipated growth. This bill reduces tax rates on the 100,000 galloons of proof a distillery produces. The difference lowers the tax from $13.50 per to $2.70 per gallon. The rate put in place for production above that level is equal to the original rates.
Something to consider is that close to 98% of craft distilleries in the US are within that threshold defined by the act. The dramatic tax savings allow the distillers’ room to invest in the success and future growth of their businesses with better production capabilities, equipment, and employees. The Craft Beverage Modernization and Tax Reform Act was set to expire at the end of 2019 unless renewed by Congress. A one-year extension of the act was included within the Further Consolidated Appropriations Act of 2020.