Report: Craft Distillers Were Particularly Hurt by COVID
Revenue was down by more than 50% in 2020, according to the American Distilling Institute
A new survey by the American Distilling Institute showcases the economic damage caused by COVID-19 and the ensuing lockdowns and quarantines.
As reported by The Spirits Business, the ADI January survey — which included 269 distilleries across 42 states and the District of Columbia — saw a 55% decline in revenue for U.S. craft distilleries in 2020, while 61% of the participating distilleries experienced a drop in revenue from online sales. The latter statistic might be surprising, given that several states loosened direct-to-consumer laws for distilleries.
“Craft distillers rely so heavily on tours, tasting rooms and local bars and restaurants, and all of those sales opportunities were lost for many months,” as ADI president Erik Owens said, noting that direct-to-consumer sales were still a “saving grace” for many distilleries in states that loosened related booze laws. Owens adds that 10 states allowed some form of direct shipping of craft spirits before the pandemic, and six additional states later passed temporary alcohol shipping measures.
One big problem: Craft distilleries are doing okay within their home states, but finding a difficult time outside of state lines; 78% of craft distillers said that three quarters or more of their sales were to in-state customers, and a near equal number of respondents suggested that out-of-state wholesalers do not give these craft brands the proper amount of attention.
As we noted in December, people were and are drinking a lot during these (wait for it…) unprecedented times, with one caveat. “People are drinking, but they’re not shopping,” as Tom Burkleaux, owner and distiller at New Deal Distillery in Portland, Oregon, and vice president of the Oregon Distillers Guild, told InsideHook. “They’re sticking with the familiar.”
So, what to do? As we’ve said many times before, buy craft, buy local. And keep doing so if and when restrictions in your area lift, and pressure your local government to keep or expand on DTC booze deliveries.
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