Distilled spirits sales for many retail outlets are up during the Coronavirus but that does not necessarily translate into success for the country’s craft spirits makers. According to industry reports as much as 40% of sales come directly from sales at the distillery and with in person visits and tours all but shut down except for carry out or delivery craft spirits makers are hurting and have had to furlough as much as 43% of their employees.
Craft distilleries report bleak prospects of being able to sustain their small businesses according to a new survey released by the Distilled Spirits Council of the United States – DISCUS 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.
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The survey’s top findings:
- Sales Decline – On average, distilleries reported a staggering 64 percent sales decline.
- Furloughed Employees – Approximately 43 percent of distillery employees have been let go or furloughed since the start of the COVID-19 crisis. The average craft spirits distillery respondent had almost 14 employees before the COVID-19 crisis and has let go nearly six employees.
- How Long Can You Stay in Business?
- 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.
- 66% of respondents do not believe they will be able to sustain their businesses for more than 6 months.
- Canceled Orders – 63% of respondents reported canceling purchases of agricultural products or other inputs such as stills, bottles and barrels.
“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 Co-Founder Republic Restoratives Distillery, Washington, DC
“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, Maryland
“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 distilled 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.