Distilleries

The 3,100 distilleries in the US produce liquors, blend liquors, and blend and mix liquor and other ingredients. Major product categories include vodka, tequila/mezcal, American Whiskey, rum, and gin. Firms may also produce other types of alcoholic beverages, including beer and wine.

Concentrated Distribution

The distribution system for wine and spirits is concentrated and continues to consolidate.

Regulation and Compliance

The alcoholic beverage industry is heavily regulated.

Aug 29, 2026 - US-Canada Trade Dispute Escalates

• US distilleries face continued losses in a key export market as the US-Canada trade dispute escalates, The Spirits Business reports. The US imposed a 50% tariff on Canadian spirits and other goods on August 22 after negotiations failed, increasing the risk of further retaliation and prolonging Canada's restrictions on American alcohol. Most Canadian provinces have kept US spirits off government-controlled liquor store shelves since March 2025, contributing to a more than 70% drop in US alcohol exports to Canada through the end of 2025. Only Alberta and Saskatchewan have resumed sales. The Distilled Spirits Council warns that the restrictions have caused significant economic harm and is urging both governments to restore tariff-free trade and market access. The dispute poses particular risks for US distillers that depend on Canadian exports, including lost sales, excess inventory, and greater pressure to find alternative markets.
• A recent federal appeals court ruling upheld an 1868 law that prohibits home distilling of spirits, while a separate appeals court reached the opposite conclusion, creating a legal split that could attract a review by the US Supreme Court, The Wall Street Journal reports. Currently, US law protects the commercial spirits market by requiring consumers to purchase distilled products from licensed producers rather than making them at home. If the ban were eventually overturned, home distilling could become a legal hobby similar to home brewing. However, any market impact would likely be limited because commercial distilleries benefit from established brands, quality control, distribution networks, and regulatory compliance. The case – Ream v. US. Dept. of the Treasury – also highlights the continued importance of federal excise taxes on distilled spirits, which remain a significant component of industry regulation and government revenue.
• An oversupply of whiskey is pressuring distillery sales and profitability as inventories rise and demand flattens, VinePair reports. Many producers are slowing production, closing facilities, and reducing staff to manage excess stock. While barrel prices have dropped significantly, improving input costs for buyers, retail prices remain sticky due to layered costs and reluctance to erode brand value, limiting revenue recovery for distilleries. Instead of cutting prices, many distillers are focusing on enhancing product quality, aging inventory longer, and adding value through innovation to maintain margins. However, slower sales turnover and high inventory carrying costs may strain cash flow. Increased competition and reduced premiumization are also forcing distilleries to justify pricing more carefully. In some cases, companies may need to sell excess inventory at a loss to rebalance the market. Overall, the whiskey glut is likely to compress margins, delay revenue realization, and require strategic adjustments to sustain profits.
• Producer prices for distilleries remained flat in July compared to a year ago, after falling 1.9% in the previous July-to-July annual comparison, according to the latest US Bureau of Labor Statistics data. Prices distillers receive for their products generally have been flat or trending down since mid-2023 when sales and demand softened following a steep run up as bars and restaurants reopened in the pandemic's aftermath. The Distilled Spirits Council has reported that spirits suppliers have recently experienced slowing growth after a long expansion period. Most forecasts for late 2026 call for modest revenue growth at best, with volume sales generally flat or slightly declining. Meanwhile, employment by the industry continues to trend downward, dipping 1.8% year over year in June, per the BLS

Industry size & Structure

The US distillery industry consists of about 3,100 establishments that employ 27,500 workers and generate between $37.2 billion annually, according to the Distilled Spirits Council of the United State.

• The US craft spirits industry consists of about 2,282 active distillers that sell over 12.7 million cases of product, generate $7.6 billion in sales, and employ 28,628 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 90% of industry revenue. The craft distilling industry is also concentrated; less than 2% of producers are responsible for more than half of all 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.
• About half of distilleries are formed as partnerships.
• New York and Texas have the most distilleries, with over 100 each, according to the Labor Department.