Patrick:
Holy s**t.
I just read the American Craft Spirits Association’s survey of the nation’s 2,000+ craft distillers, and the results are grim. In the words of Margie A.S. Lehrman, CEO of the ACSA: “craft distilleries are facing a potential industry-wide collapse.”
COVID-19 isn’t just threatening to decimate the industry; it’s reshaping its future. That’s the gist of a New York Times article addressing our nascent craft industry.
In short: “How can a sector that relies so heavily on bars, tasting rooms and face-to-face sales — not to mention customers willing to pay a premium for its products — move forward in an economy defined by social distancing and thinner wallets?”
2020 was supposed to herald a whole new level of success. In American in the last ten years, the number of distilleries had grown to more than 2,000. And in addition to amounting for $5 billion in liquor sales domestically, craft distillery tourism was generating a half billion dollars in sales worldwide before distillers all over the globe were forced to shut their doors. With so many revenue streams drying up, the question is going to be whether the smaller outfits can survive.
The New York Times article pinpoints what commercially defines the craft distilling sector: “local distribution with a focus on so-called on-premises sales, like bars, restaurants and their own tasting rooms.” And it details the reality facing most of new ventures in this industry, to wit, the massive amounts of debt necessary to finance operations in the first few years of distilling operations.
Even worse, the article notes that “the market for craft spirits is centered in large cities and among millennial and younger consumers — all of which have been especially hurt by the sudden economic downturn,” and further reports that “customers are mostly hoarding low-priced household brands — instead of buying a bottle of craft whiskey, they’re buying two bottles of Jack Daniel’s.”
What is clear, bud, is that we’re going to have to rely heavily on our community to keep us afloat in these trying times. Perhaps that’s how it SHOULD be. Because we were never in it for the money… we were in it for the PLACE, for the PEOPLE, for the community of those who love the soil we grew up on as much as we do. New Scotland represents our core values, and New Scotland Spirits is designed to celebrate the people who live them.
That’s why I think the New York Times hits that nail right on the head:
Whichever path the industry takes, distillers say they expect a future with fewer of them, and much less money to go around. That might not be an entirely bad thing, if it forced distillers to set aside big expansion plans and focus instead on deepening their relationships with their communities.
“The ones who get through will be the ones the communities closest to them decide it’s important that they survive,” Mr. Mooney said. “If your community values your existence, your community will rally around not just making sure you survive, but thrive afterward.”
Amen, brother.
—Jesse