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 2,687 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 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

                              Feb 28, 2024 - Producer Prices Slid in 2023
                              • The producer price index for distilleries, which measures prices before reaching consumers, dipped about 1.1% in December compared to a year ago after rising nearly 9% in the previous annual comparison, according to the US Bureau of Labor Statistics. Producer prices dipped amid flat spirits sales (up 0.2%) in 2023 to $37.7 billion, while volumes rose 1.2% to 308.8 million 9-liter cases, according to the Distilled Spirits Council of the United States. Meanwhile, employment by breweries, wineries, and distilleries grew 2% in December year over year, per the BLS.
                              • US spirits sales were flat in 2023 but maintained their market share lead, the Distilled Spirits Council of the United States (DISCUS) reported at its annual economic briefing in February. Last year, US spirits market share topped 42%, a gain of more than 13 points of market share since 2000, marking the second year in a row that spirits supplier revenues surpassed beer, according to DISCUS. “The spirits sector showed resilience in 2023, navigating through the choppy wake of the pandemic and maintaining our market share lead of the total beverage alcohol market,” said DISCUS President and CEO Chris Swonger adding, “The phenomenal sales growth we saw during the pandemic was unprecedented … but also unsustainable.” Factors contributing to last year’s challenging sales environment included high inflation and interest rates; consumers returning to more normal routines and buying habits post-pandemic; and retailers and wholesalers pausing reordering to reduce inventory.
                              • US spirits exporters won a reprieve after the Biden administration negotiated an extended suspension of the European Union’s retaliatory tariffs on American Whiskeys, the Distilled Spirits Council reports. The suspension, which took effect in January 2022 and was due to expire in January 2024, has been extended until March 31, 2025. Without it, US distillers were facing the reimposition and doubling of the EU tariff to 50% next month. The tariff suspension has been a boon for the domestic spirits industry. As a result of the suspension, American Whiskey exports to the EU increased by 29% in 2022 over 2021, reaching $566 million in 2022, accounting for 44% of all American Whiskey exports and surpassing the pre-tariff level of $518 million in 2017. Through October 2023 (latest data available), American Whiskey exports to the EU are up nearly 64% compared to the same period in 2022 (January-October).
                              • A recent Gallup Consumption Habits poll finds that 62% of US adults drink alcohol, while 38% abstain completely. The poll, conducted in July, reveals beer is still the most popular alcoholic drink, with liquor battling wine for second place. Among those who drink alcohol, 69% report having done so within the past week, including 32% who say it was in the past 24 hours and 37% two to seven days ago. Another 32% say their last drink was more than a week ago. On average, US drinkers report that they had four drinks in the past week, which matches the trend average since 1996. Nearly one in five (19%) say they sometimes drink more than they think they should, which is in line with the previous three readings between 2018 and 2021, but below the trend average of 23% since 1978.
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