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
Aug 29, 2024 - Distillers Facing Lack of Distributors
- 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.”
- Producer prices for distilleries were relatively unchanged again in July compared to a year ago extending to over a year a series of mostly monthly flat comparisons. The flat trend in producer prices tracks weakening sales for distillers and subdued demand for alcohol following a surge during the pandemic. Sales for the US distilleries industry are forecast to grow at a 4.08% compounded annual rate from 2024 to 2028, comparable to the growth of the overall economy but well below average growth rates in recent years, according to the Interindustry Economic Research Fund, Inc. Meanwhile, employment by breweries, wineries, and distilleries grew 3.4% year over year in June to a new high for the industry, per the BLS.
- A recent 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.
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