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 2,000 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.

Heavy Government Regulation

The alcoholic beverage industry is heavily regulated by federal, state, and local governments.

Concentrated Distribution Channels

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

Industry size & Structure

The US distillery industry consists of more than 2,000 establishments that employ over 24,000 workers and generate between $37-38 billion annually, according to the American Craft Spirits Association.

    • The US craft spirits industry consists of about 2,687 active distillers that sell over 13.2 million cases of product, generate $7.5 billion in sales, and employ over 24,200 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, which include Diageo, Pernod Ricard, Brown Forman, and Bacardi, typically have business in foreign markets.
    • Over half of distilleries are formed as partnerships.
                              Industry Forecast
                              Distilleries Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Apr 30, 2023 - Cocktails To-Go Now Permanent in 19 States
                              • Maine in April became the 19th US state to pass legislation to permanently allow cocktails to-go from restaurants and bars, according to the Distilled Spirits Council of the United States (DISCUS). The new law permanently allows certain beverage alcohol licensees to sell beer, wine and approved mixed drinks with a food purchase to go. Mixed drinks must be in sealed containers, appropriately labeled and placed in the trunk or non-passenger compartments of a vehicle. Since the beginning of the pandemic, Maine, 18 other US states and the District of Columbia have made COVID-era cocktails to-go measures permanent, and 14 others have enacted laws that allow cocktails to-go on a temporary basis. Numerous states are still considering similar legislation.
                              • Modeled on the Oregon Wine Board, distillers in the state are seeking legislative approval to establish an independent Oregon Spirits Board to promote hard liquor made in Oregon to other states and internationally, Oregon Public Broadcasting reports. “We think of ourselves as being where the wine industry was 20 years ago,” Kelly Woodcock, with Westward Whiskey testified before state lawmakers in April. “With the help of a spirits board, I get excited about what we can bring to the state in the next two decades,” she said. Distillers who support the board’s establishment propose using an existing .50-cent-per-bottle tax levied on every bottle of liquor in the state to promote and grow their industry. Currently, that money goes to state and local governments and usually tops $2 million a year. If passed, the legislation (House Bill 2976) would become effective in January 2025.
                              • US spirits exports rebounded to a record high last year following the temporary suspension of retaliatory tariffs, according to the Distilled Spirits Council of the United States (DISCUS). Total 2022 US spirits exports rose 30% to $2.06 billion and American whiskey exports increased 32% to $1.28 billion over 2021, according to DISCUS. Other factors driving the increase in US spirits exports include a shift by consumers in key export markets towards premium and super premium American spirits; the ongoing reopening of the global hospitality sector; and growth in US distilleries from fewer than 100 in 2005 to more than 2,600 today. DISCUS is urging the Biden administration to secure the permanent removal of the retaliatory tariffs on American spirits levied by the EU and UK from 2018 to 2021.
                              • American whiskey drove the rise in overall US spirits exports in 2022, according to the Distilled Spirits Council of the United States (DISCUS). American whiskeys accounted for nearly two-third (62%) of all spirits exports in value terms, and 23% in volume terms last year. The top five markets for US whiskeys in 2022 were the European Union ($566 million), followed by Australia ($117 million), the UK ($112 million), Japan ($102 million) and Canada ($80 million). Since the EU suspended its 25% retaliatory tariff on American whiskeys in January 2022, US whiskey exports saw an increase of 32% compared to 2021. Total American whiskey exports to the EU reached $566 million, accounting for 44% of total American whiskey exports ($1.3 billion), surpassing the 2017 pre-tariff level of $518 million, according to DISCUS.
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