In 2016 there were 1,315 active distillers, which rose to 1,589 in 2017, according to figures compiled by the American Craft Spirits Association (ACSA), Park Street Imports, and the IWSR.
A craft spirits producer is defined by the ACSA as one that has not removed from bond more than 750,000 proof gallons; markets itself as craft; is not openly controlled by a large supplier and has no proven violation of the ACSA Code of Ethics.
All about local
The West boasts the largest number of distilleries (32.7% of total US craft distilleries), but the South – with classic spirits states like Texas, North Carolina and Kentucky – comes a close second (29.3%). The Midwest accounts for 19.1% and the Northeast 18.9%.
California is the state with the most distilleries: a total of 148, which makes up 9.3% of the nation’s total. This is followed by New York, Washington, Texas and Colorado.
On average, more than half of a craft spirit producer’s US sales come from within its home state (18% at the facility and 34% outside its premises).
“Nearly one-fifth of all sales take place at the production facility, underscoring the importance of tasting rooms and on-site retail to the bottom line,” says ACSA in its 2017 annual report.
Meanwhile, employment in the craft spirits industry has grown nearly 50%: from 13,239 full time jobs in 2016 to 19,579 jobs in 2017.
The ACSA highlights 2017’s ‘most game-changing moment’ as when Congress passed the Craft Beverage Modernization and Tax Reform Act (CMBTRA) on December 19 as part of the larger Tax Cuts and Jobs Act.
“The significance of the tax vote cannot be overstated, for it is the first time in modern history that the federal government has acted to lower the Federal Excise Tax (FET) on the nation’s small craft distillers,” explains the ACSA.
“The legislative action has helped level the playing field for spirits within the broader craft beverage space, putting distillers on par with breweries and wineries. Prior to the law’s enactment, a craft spirits producer had paid 5.4 times more FET than a craft brewer and 16.4 times more FET than a small winery, for equal quantities of beverage alcohol.
“While it certainly is a time to celebrate, our work is only just beginning. ACSA’s priority now is to ensure that Congress votes to make the tax relief permanent.”
The American Craft Spirits Association is a registered non-profit trade group representing the U.S. craft spirits industry.