‘There is the potential for craft spirits to achieve market share parity with craft beer’

By Rachel Arthur contact

- Last updated on GMT


Related tags: Distillation

There are now more than 1,300 craft spirits producers in the US and the market continues to grow rapidly. The Craft Spirits Data Project – an initiative to evaluate performance and trends in the market – suggests the success of craft spirits could follow that of craft beer.

This in turn offers promise of increased exports, further employment opportunities, and more investment in the category.

Excise tax parity will be a crucial issue for the sector’s future, the report says, noting craft spirits are at a disadvantage compared to craft brewers and small wineries.

The Craft Spirits Data Project is an effort led by the American Craft Spirits Association (ASCA), the International Wine and Spirits Research (IWSR), and industry advisers Park Street. It was set up to provide a fact base for the US craft spirits industry, and has released the highlights of the project this month.  

At a glance: US craft spirits

The US craft spirits market reached 4.9m cases and $2.4bn in retail sales in 2015, growing at a CAGR of 27.4% in volume and 27.9% in value between 2010 and 2015. 

The market share of US craft spirits reached 2.2% in volume and 3.0% in value in 2015, up from 0.8% and 1.1% respectively in 2010.

The market is concentrated with the five top states (CA, NY, WA, CO and TX) accounting for 35.6% of craft distillers. The next five top states (OR, PA, NC, OH, FL) account for 16.5% of the market.

US craft spirits are defined by the report as distilled spirits that are produced in the country by licensed producers that have not removed more than 750,000 proof gallons (or 394,317 9L cases) from bond; market themselves as craft; are not controlled by a large supplier; and have no proven violation of the ACSA Code of Ethics. 


The Project identifies exports as an additional runway for future growth with 523,000 cases shifted in 2015 "adding more than 10% of additional volume to craft distiller total sales."

Employment and investment

The US craft spirits industry employs more than 12,000 full-time employees. Investment in the sector reached close to $300m in 2015 with funds going toward tasting rooms and other visitor experiences and equipment to aid an increase in production.

Direct sales and home state sales

Direct sales (from the distillery) make up 25% of total sales, while home state sales outside the distillery account for 67% of revenues.

Direct sales are particularly important for smaller craft producers.

Growth potential

“Many surveyed retailers and wholesalers see the potential for craft spirits to perform in line or better than craft beer over time,”​ says the report.

Craft beer currently enjoys a 12% market share​ of the US beer market by volume.The US craft spirits share sits at 2.2%.

Challenges to growth

The Project observes that excise tax parity is one of the most pressing issues for the industry.

“Taxes on distilled spirits are among the nation's highest, comprising 54% of the typical spirits product's purchase price.

“Craft spirits producers remain disadvantaged compared to craft brewers and small wineries that receive a significant reduction in their Federal Excise Tax (FET) rate. 

“A craft spirits producer pays six times more FET than a craft brewer and 17 times more FET than a small winery for equal quantities of beverage alcohol.”

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