Artisanal distillers across the country were forced to close their tasting rooms and tours at the start of the pandemic. And while those moves were necessary to help slow the spread of the novel coronavirus, the closures have had a severe impact on what was becoming a burgeoning industry that generated $ 3.2 billion in retail sales last year.
A new study from the Distilled Spirits Council of America (DISCUS) released Thursday revealed alarming numbers on the loss of sales and jobs within the national craft spirits industry due to the COVID-19 shutdowns. The study was based on data from a June 2020 survey conducted by the American Distilling Institute, a trade association of artisanal distillers, with comments from nearly 300 distilleries.
About 41% of sales were lost, costing more than $ 700 million, and 31% of the workforce, with about 4,600 jobs suspended in artisan furnaces. A significant portion of these losses was attributed to the closure of the tasting room site and the sale on the other site. About 40% of artisan distillers reported a 25% or more drop in their on-site sales, and more than 15% said their tasting rooms were completely closed.
But then, starting in March, quarantines across the country closed restaurants. , bars and tasting rooms. , eliminating the main sources of income for artisanal distillers, “says Erik Owens, president of the American Distilling Institute.” Some distillers went months without income from their spirits.
Artisanal distillers rely heavily on sales through on-site tasting rooms, which have been hit hard by the pandemic as many states have closed tasting rooms and other interior amenities to slow the spread of COVID. -19. In 2019, approximately $ 919 million of artisanal distillery revenue came from on-site sales. And more than 40% of artisanal distillers get more than half of their business from tasting room sales.
Artisanal distillers are considered small businesses within the hotel industry. About 60% of artisan spirits manufacturers sell fewer than 2,500 cases a year. There are more than 2,000 artisanal distilleries operating in the United States: 45% of artisanal distilleries operate in a single state; only 12% of artisanal distillers operate in more than 10 states, collectively funding more than 15,000 direct jobs.
Many states have taken innovative measures to provide the necessary financial support for artisans after coming close to their tasting rooms and tourism. Since COVID-19 arrived in the US, eight states allowed state distillers to ship the state’s products to consumers as a temporary economic relief measure, and dozens now sell cocktails to Chris Kang, president, noted Please allow. And CEO of Distilled Spirits Council.
The Distilled Spirits Council has been working closely with state guilds to urge Congress for additional financial assistance. The key to the survival of the artisanal distillation industry is the approval of the Artisanal Beverages Modernization and Tax Reform Law. Federal legislation would reduce the federal excise tax on the first 100,000 test gallons from $ 13.50 per test gallon to just $ 2.70.
“This reduces the tax burden on the artisan figure by $ 20 per case,” explains Swangar artisan distillers will face a 400% tax increase in January, which could be the final blow for many of these struggling small businesses . “
