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

                              Jun 29, 2024 - Temperance Eroding Demand
                              • The Producer Price Index (PPI) for distilleries, which measures prices before reaching consumers, fell 1.8% in April compared to a year ago after rising 4.3% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. Prices for distillers are falling amid declining interest in drinking alcohol among many Americans. US spirits sales were flat in 2023. Employment by distillers was flat in April (up less than 1%) year over year, per the BLS. Meanwhile, profits for beverage and tobacco products companies plunged nearly 50% in the fourth quarter and were down 66% from the previous quarter, according to the latest data from the Census Bureau.
                              • A new survey that polled 1,000 Americans 21 years of age and older about their current drinking habits and future plans for alcohol consumption found that 41% plan to drink less in 2024, Fox Business reports. The survey published by NC Solutions found that 49% of millennials and 61% of Generation Z respondents said they want to drink less, a worrisome trend for producers and retailers of alcoholic beverages. Gen Zers are prioritizing their mental health over alcohol consumption, with more than a third (36%) surveyed saying they are going alcohol-free for their mental health, specifically. Other reasons given for reducing or eliminating alcohol consumption include improving physical health, losing weight, and saving money, according to Fox Business. The survey also found that consumers are increasingly choosing non-alcoholic brands that mimic alcoholic drinks and that mocktails (alcohol-free cocktails) are expected to be a major trend in 2024.
                              • US spirits exports reached a record high in 2023, driven by exports of American Whiskeys, according to an American Spirits Export Report released in February by the Distilled Spirits Council of the United States (DISCUS). US spirits exports totaled $2.2 billion in 2023, up 8% over 2022. Following the lifting of retaliatory tariffs on American Whiskeys, which account for nearly two-thirds (63%) of all US spirits exports, exports of American Whiskeys rose 9% over 2022. “This latest report shows that US exports are continuing to rebuild after plummeting from the devastating retaliatory tariffs on American spirits imposed [from 2018-2021] by the European Union and UK,” said DISCUS VP of international trade Rob Maron. After the tariffs were suspended in January 2022, American Whiskey exports to the EU surged by more than 60%. The top five markets for US spirits in 2023 were the EU, Canada, Mexico, Australia, and the UK.
                              • 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, the 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.
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