Craft distillers are not immune to the problems facing the larger spirits industry, as a new report from the American Craft Spirits Association and Park Street Consulting shows. The annual Craft Spirits Data Project shows craft distillers suffered a 3.6% decrease in sales volume and a 1.1% decrease in sales value during 2023. It is the first time since the project started in 2016 that craft distillers have recorded declining sales.
Small-scale distillers also lost market share slightly to 4.6% of the overall spirits market by volume, down from 4.9% in 2022. However, the number of craft distillers continues to grow despite the challenging environment, with an 11.5% increase to 3,069 distilleries as of August 2024.
“We’ve been told again and again that small businesses are the backbone of the U.S. economy,” said Margie Lehrman, CEO of the ACSA. “So if this is true, I’m going to suggest that we’re in severe need right now of either yoga blocks to help us stretch that backbone or alternatively, physical therapy giving us the tools that we need to keep our backbone strong,” she said during a presentation outlining the findings.
Former ACSA President Becky Harris of Catoctin Creek Distilling called for regulatory changes at the state and federal levels to make it easier for craft distillers to self-distribute their products, streamline the bureaucratic paperwork, and allow distillers to ship using the U.S. Postal Service.
One bright spot of the report was export sales, which grew by 5 percent during 2023, with Japan, the United Kingdom, and Canada as the top three export markets. However, those sales are only being made by a small minority of craft distillers, and have not returned to the levels before the European Union imposed import tariffs on American whiskies in 2018.