Distilled Spirits Council - Texas Distilled Spirits Annual Report

Texas is known for doing things big and the distilled spirits industry is no exception. According to a new research report created by University of Texas at San Antonio (UTSA) Center for Community & Business Research on behalf of the Distilled Spirits Council of the United States (DISCUS) distilling is bubbling over in the Lone Star state and now we have the data to prove it.

The Number of Distilleries in Texas has Grown a Whopping 2,275% in 12 Years

As recently as 2008 there were only eight distilleries in the largest of the 48 contiguous U.S. states. To say that number has grown would be an understatement, it’s more like a gusher. The number of distilleries in Texas has grown 2,275% from 8 to 190. Wow!

Researchers at UTSA released the “Economic Contributions of Distilled Spirits in Texas 2020,” a new study highlighting the significant economic impact Texas distillers made to their local communities and the state in 2020, despite economic hardships of the pandemic and lingering Prohibition-era laws restricting sales.

“Over the past decade, the number of Texas distilleries has grown dramatically as has the sector’s economic impact to local economies and surrounding communities,” Javier Oyakawa, lead investigator of the study from the Center for Community and Business Research at the UTSA Institute for Economic Development. “The number of Texas distilleries has grown from just eight in 2008 to 190 today. These distillers are playing a critical role in the state’s economy by generating sales, creating jobs, and providing wages and benefits.”

Key Findings from the Study Show Direct, Indirect, and Induced Effects of Texas Distillers

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  • Nearly $2 billion in total economic output (or revenues)
  • Support for close to 4,900 jobs
  • As much as $334.9 million in salaries and benefits paid to workers
  • Approximately $481,450 from on-premise mixed beverage sales taxes paid. The tax paid in 2020 declined by more than $240,000, or 34%, due to COVID-19-related closures.
  • Close to $391,000 from on-premise mixed beverage gross receipts taxes were paid. The tax paid in 2020 declined around $200,000, or 34%, due to COVID-19-related closures.
  • 30.6% of the grains were sourced in-state generating $5.5 million for local farmers

“What we found especially interesting was that the Texas spirits industry continued to generate significant economic support for the state between 2019 and 2020, despite substantial declines in on-premise sales due to the pandemic-related closures of distillery tasting rooms and restaurants,” said Tom Tunstall, senior director for community and business research at the UTSA Institute for Economic Development.

“This study makes clear that continued growth of the Texas distilling industry presents great opportunities for the state, and that the collective economic contributions of these small businesses could be even greater if antiquated laws restricting spirits sales were updated,” said Kristi Brown, senior director of state government relations at the Distilled Spirits Council of the United States.

“Texas distillers still aren’t allowed to sell spirits bottles to consumers on Sundays, despite being allowed to open their doors, offer tours and provide tastings.

“This simply doesn’t make sense. The decline in on-premises sales greatly impacted distillers, and it’s time to modernize Texas alcohol laws to help support this growing industry and spirits consumers throughout the state.”

The table below shows output, gross state product, payroll, and employment contributions for 2020 in millions of dollars.

Employment1,357 2,158 1,380 4,895
Gross State Product$568.9$254.0$125.3$948.2
*Gross State Product (also called value-added), describes how income is distributed among different categories: employee compensation, other property income (like profits,     interest income, dividends, among others), and the tax on production and imports (particularly sales taxes at the State level). 2 Source: IMPLAN online platform. 3 Elaboration: J. Oyakawa

Tax Revenues from Locally Made Spirits

  • Out of the $108.9 million in spirits gallonage excise taxes collected by the state in FY2020, close to $8.6 million correspond to locally made spirits.
  • Out of the $968.6 million mixed beverage taxes collected by the State and by local governments in FY2020, close to $42.9 million correspond to locally made spirits.

Other Industries Impacted by Distilleries

The study also highlights the impact Texas distillers have on other local businesses. Aside from the distilleries, some of the top industries supported by the spirits industry are wholesalers of goods such as grains, machinery and equipment, glass container manufacturers and truck transportation. The table below shows contributions in millions of dollars.

Wholesale – Nondurable goods (grain merchants, alcohol beverage merchants, etc.)$108.9
Wholesale – Machinery, equipment and suppliers$44.4
Glass container manufacturers$28.3
Truck transportation$28.2

“The data shows the proliferation of distilleries, and their continued growth helps support other local businesses including farmers, glass manufacturers, truckers, equipment suppliers and more,” said Tunstall. “Supporting the distilling industry, therefore, has a much larger positive impact on the overall economy in Texas.”

Download the full Economic Contributions of Distilled Spirits in Texas 2020.

Established in 1979, The University Of Texas At San Antonio Institute For Economic Development has helped over 5,000 businesses open their doors and create more than 58,000 jobs in the Texas economy. It consists of 10 centers and programs that excel in results-oriented advising, training and research for startups, existing businesses and community leaders seeking strategic economic growth, serving local, regional, national, and international initiatives.

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