Craft distilleries, faced with closed tasting rooms and plummeting sales due to COVID-19, report bleak prospects of being able to sustain their small businesses, according to a new survey released today by the Distilled Spirits Council of the United States and the American Distilling Institute.
“This survey provides a snapshot of the very real and devastating impacts of COVID-19 on small distilleries across the country,” said Chris Swonger, president and CEO of the Distilled Spirits Council of the United States. “After putting their blood, sweat and tears into building the distillery of their dreams, these craft distillers are barely hanging on and need immediate economic relief to keep their businesses running. For many towns, keeping the local distillery open is vital to tourism and the economic vitality of the surrounding community.”
The survey includes feedback from 118 distilleries across 35 states and the District of Columbia.
The survey’s top findings:
- Approximately 43% of distillery employees have been let go or furloughed since the start of the COVID-19 crisis. The average distillery respondent had almost 14 employees before the COVID-19 crisis and has let go nearly 6 employees.
- On average, distilleries reported a 64% sales decline.
- Two-thirds of respondents do not believe they will be able to sustain their businesses for more than 6 months.
- 42% of distillers do not anticipate being able to sustain their businesses for more than 3 months.
- 21% of distillers do not anticipate being able to sustain their businesses for more than 3-6 months.
- 63% of respondents reported canceling purchases of agricultural products or other inputs such as stills, bottles, and barrels.
“There’s no way to sugarcoat this news—the economic climate for the craft distilling industry is dire,” said Erik Owens, president of the American Distilling Institute, which represents more than 600 small, independently owned craft distillers. “Thankfully, many state governments have relaxed regulations to provide distilleries some flexibility with their business models. This certainly helps, but we have a long way to go to get the once vibrant craft distilling sector back to booming again.”
The spirits industry recently sent a letter to Senate and House leadership urging Congress to provide additional economic relief to the thousands of distilleries facing enormous financial hardship due to the impact of COVID-19.
Craft Distiller Voices:
“It’s terrifying that such a robust industry could be so deeply threatened in a matter of weeks. I worry that many of us won’t survive and the farmers and small suppliers that depend on us will be hurt as well.” – Pia Carusone with Republic Restoratives, Washington, DC
“We desperately need the FET to be permanent. If we get a loan, we’ll have to be paying that back on top of higher FET rates.” – Skip Rock Distillers in Washington State
“We desperately need immediate relief loan funds to sustain the drop in sales from restaurant and bar closings and social distancing shutdown measures.” – Craft distiller from Mississippi
“Tariffs on overseas sales seems to have been ‘masked’ in the current discussions. Tariff relief would aid in recovery and building a sustainable business going forward.” – Craft distiller from New York
“We are in a tourist town, and April is one of our best retail sales months. We have serious concerns that our local economy will not bounce back, and 2020 retail sales will be a huge loss.” – Jaime Windon, Lyon Distilling, St. Michael’s, MD