Annual Craft Spirits Data Project Released Report highlights downward trends in craft sector Written by SAILOR GUEVARA
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n September, the American Craft Spirits Association (ACSA) and Park Street presented highlights from the 2024 Craft Spirits Data Project (CSDP) at its Annual Craft Spirits Economic Briefing. ACSA CEO Margie A.S. Lehrman, Kelly Woodcock of Westward Whiskey and ACSA President, and Emily Pennington, Park Street’s Head of Content and Senior Marketing Manager, shared key insights from the 2023 report such as the number, size, and impact of craft spirits producers in the U.S. The 2023 report, released this August, revealed that craft spirits sales were in decline for the first time since the first CSDP in 2016, stating, “In 2023, the U.S. craft spirits category performed in line with the larger spirits market, experiencing its first decline since the creation of this report in 2016. The craft spirits category represented 13.5 million cases (versus 14 million in 2022) and $7.8 billion in sales for the year, representing a volume decrease of 3.6 percent and value decrease of 1.1 percent.”1 The key findings from the report states:
• The number of active craft distillers in the U.S. grew by 11.5 percent to reach a total of 3,069.
• The U.S. craft spirits category volume was more than 13.5 million 9L cases
1 2024 Craft Spirits Data Project - Page 3, Executive Summary Paragraph 1.
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in retail sales in 2023, marking a -3.6 percent growth rate year-over-year. In value terms, the market was $ 7.8 billion in sales representing a -1.1 percent growth rate.
• Craft spirits market share of total U.S. spirits decreased to 4.6 percent by volume and 7.5 percent by value in 2023, down from 4.9 and 7.7 percent in 2022.
• Exports of U.S. craft spirits increased,
reaching 179,000 9L cases, marking about a 5 percent increase from the prior year.
• Employment numbers within the U.S. craft market continued to increase post-pandemic, reaching 29,373 fulltime domestic employees, up from 27,368 in 2022.2
While the CSDP report shows overall sales in decline along with craft distillery closures (an estimation of about 45 closures), it also shows that the number of craft distilleries increased by 11.5 percent in 2023. In an interview published in September for the Robb Report, a publication that tracks luxury products and services, Becky 2 2024 Craft Spirits Data Project - Page 4, Key Findings.
Harris, founder of Catoctin Creek and ACSA government affairs lead, said this report did not come as a surprise to her and that, while many will say this is the result of broader economic conditions, that’s not the whole picture. “Since 2017, there has been consistent, if slowing, growth in craft spirits sales as a share of the larger market in both value and volume. After a somewhat flat year in 2022, this year we see the first decrease in both. Yes, spirits as a category is down, but craft spirits producers are hurting more.” She points to consolidation at wholesale and retail levels and antiquated routes to market as having a major effect. “Compounding this issue is the narrowing of the wholesale funnel,” she said, “an issue ACSA has highlighted quite significantly of late which continues to steadily choke off market access to newer and less heavily capitalized brands.”3 Harris also called for regulatory changes at the state and federal levels to make it easier for craft distillers to self-distribute their products, streamline the bureaucratic paperwork, and allow distilleries to ship via the U.S. Postal Service. 3 Robb Report, Why Craft Spirits Sales Are Down for the First Time in Nearly a Decade, Jonah Flicker, paragraph 3, September 18, 2024 - https://robbreport.com/food-drink/spirits/craft-spirits-salesslumping-1235869675/.
“Compounding this issue is the narrowing of the wholesale funnel. An issue ACSA has highlighted quite significantly of late which continues to steadily choke off market access to newer and less heavily capitalized brands.”
— BECKY HARRIS
Government affairs lead, American Craft Spirits Association W W W . ARTISANSPIRITMAG . C O M