Distilleries
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 2,753 distilleries in the US produce liquors, blend liquors, and blend and mix liquor and other ingredients. Major product categories include vodka, whisky, rum, tequila, and gin. Firms may also produce other types of alcoholic beverages, including beer and wine.
Strict Regulation
The alcoholic beverage industry is heavily regulated.
Concentrated Distribution
The distribution system for wine and spirits is concentrated and continues to consolidate.
Industry size & Structure
The US distillery industry consists of about 2,230 establishments that employ over 27,000 workers and generate between $37-38 billion annually, according to the American Craft Spirits Association.
- The US craft spirits industry consists of about 2,753 active distillers that sell over 14 million cases of product, generate $7.9 billion in sales, and employ over 27,368 workers, according to the American Craft Spirits Association. A craft spirit distillery produces no more than 750,000 proof gallons and is not controlled by a large supplier.
- The distillery industry is highly concentrated; the top 50 companies account for 92% of industry revenue. The craft distilling industry is also concentrated; less than 2% of producers are responsible for 56% of cases sold.
- Large firms with distillery operations, such as Diageo, Pernod Ricard, Brown Forman, Suntory (Jim Beam), and Bacardi, typically do business in foreign markets.
- Over half of distilleries are formed as partnerships.
Industry Forecast
Distilleries Industry Growth
Recent Developments
Dec 29, 2024 - Prices Dip, Profits Jump
- Producer prices for distilleries declined by 0.8% in November compared to a year ago after rising by just 0.2% in the previous November-versus-November annual comparison, according to the latest US Bureau of Labor Statistics data. Prices for distilleries have been relatively flat since mid-2023 as sales and demand have softened following a run up in the aftermath of the pandemic sparked by the reopening of bars and restaurants. Despite weak pricing power, after-tax profits for beverage and tobacco products companies jumped 23.8% year over year in the second quarter of 2024 to record levels, Census Bureau figures show. Employment by breweries, wineries, and distilleries grew 2.3% year over year in October, per the BLS.
- US distillers, already facing the threat of a 50% tariff on American whiskey by the EU at the end of March 2025, could face retaliatory tariffs on tequila and Canadian whisky imposed by Canada and Mexico if president-elect Trump follows through on his threat to slap 25% tariffs on products from those countries unless they stop the flow of drugs and migrants to the US, the Distilled Spirits Council of the United States (DISCUS) warns. Under the United States-Mexico-Canada Agreement (USMCA), tequila and Canadian whisky are designated as distinctive products and can only be made in their country of origin. Consequently, imposing a tariff on tequila and Canadian whisky won't help boost American jobs because they can’t be produced here. Import tariffs on spirits will only serve to raise prices for US consumers and lead to job losses across the hospitality industry, DISCUS warns.
- With the reimposition of retaliatory tariffs on American Whiskey and other distilled spirits looming, the Distilled Spirits Council of the United States (DISCUS) has submitted a report to the Office of the United States Trade Representative (USTR) identifying the key foreign trade barriers impeding US exports. Per the October report, major trade barriers faced by US spirits exporters around the world include retaliatory tariffs, discriminatory taxes, regulatory standards, and certification and labeling measures. The European Union’s retaliatory tariff on American Whiskey – part of the steel-aluminum dispute – is scheduled to be reimposed at 50% on March 31, 2025, while its 25% retaliatory tariff on US rum, brandy and vodka is due to be reimposed in July 2026, if there’s no agreement with the EU on aircraft subsidies. Both tariffs are currently suspended -- resulting in recent record high spirits exports -- and DISCUS is advocating for their permanent removal.
- Tensions are brewing between distillers and distributors following a recent article in Food & Wine magazine that suggests US craft distilleries are in crisis. In short, the July article describes how a lack of distributors is inhibiting the growth of the craft spirits industry in the US and proposes legal direct-to-consumer (DTC) spirits shipping as a remedy, a solution opposed by distributors who see DTC shipping of spirits as a threat to the three-tier system of alcohol distribution, and their livelihoods. The American Craft Spirits Association (ACSA) blames the dominance of the three-tier distribution system for the distribution challenges facing the craft spirits industry. For its part, the Wine and Spirits Wholesalers of America, the national trade group for wine and spirits distributors, in a press release, accused the ACSA of seeking to deregulate and dismantle the three-tier system put in place following prohibition under the guise of “modernization.”
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