COVID Slams Craft Distillers

Aug. 26, 2020
The pandemic has hit the U.S. craft spirits industry especially hard, driving down sales by 41% and forcing layoffs of 31% of its workforce.

The pandemic has hit the U.S. craft spirits industry especially hard, driving down sales by 41% and forcing layoffs of 31% of its workforce, according to a report by an industry group.

More than $700 million in sales has disappeared, and 4,600 employees have been furloughed, according to the report from the Distilled Spirits Council of the United States. Much of that loss was attributed to interrupted service in the distillers’ on-site tasting rooms, which provides a large part of the industry’s marketing power. The study was based on data from a June 2020 survey by the American Distilling Institute.

Approximately 40% of craft distillers reported that their on-site sales were down 25% or more; more than 15% said that their tasting rooms were completely shut down. More than 40% of craft distillers report that their wholesale business is down 25% or more, and 11% said they have lost all of their wholesale business.

“The analysis underscores the importance of craft distilleries as economic drivers in their communities that create jobs and support local farmers and tradesmen,” Chris Swonger, president and CEO of the Distilled Spirits Council, said in a statement. “It also makes clear the extreme challenges these small businesses are facing and the need for Congress to immediately act to help these cherished distilleries recover.”

According to the American Craft Spirits Association, a craft distillery is one that produces fewer than 750,000 gallons of distilled liquor a year, with 75% or more independent ownership.

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