SPIRIT ONLINE RETAILERS ARE FOCUSING ON CRAFT SPIRITS

Retail distribution in the wine & spirits has a curious evolution cycle.

Small retailers of Wines & Spirits, then Larger retailers, then Online Retailers, then Online but just spirits for instance, then more narrow and specific with an online store with just Craft Spirits. See for example the one below from New York.

Check for instance: https://www.newyorkcraftspirits.com

New York Craft Spirits

It is becoming interesting how the marketplace is changing into wider or more specific retailing formats.

The 2 trends are education and price as far I can see.

Retail business models with less education = the local liquor store. Dirty, Messy and not enjoyable but just across and for people not looking for anything special.

The other end of the spectrum is large numbers of everything with huge assortments, premium products and prices, and many store attendants that know, with a club membership and special talks to attend and tastings.

Everything in between is the danger zone.

AMERICAN CRAFT SPIRITS INDUSTRY HAS ALMOST X10 IN 10 YEARS

The last time I check just about 4 or 5 years ago there were approximately 250 distilleries in the USA.

Now this week the Spirits Business announces 1315 distilleries in the USA.

What happened?

The US craft spirits industry is booming according to The American Craft Spirits Association (ASCA) and the International Wine and Spirits Research (IWSR).

American Craft Spirits Association Logo

Through collaboration these two organizations are currently running a research called the 'Craft Spirits Data Project'.

Main Findings from the Craft Spirits Data Project:

• The U.S. craft spirits industry is growing rapidly. As of August 2016, there were 1,315 craft distillers active in the U.S. The U.S. craft spirits market reached 4.9 million cases and $2.4 billion in retail sales in 2015, growing at a compound annual growth rate (CAGR) of 27.4 percent in volume and 27.9 percent in value between 2010 and 2015. The market share of U.S. craft spirits reached 2.2 percent in volume and 3.0 percent in value in 2015, up from 0.8 percent and 1.1 percent in 2010, respectively.
• Exports offer an additional runway for growth. Exports of U.S. craft spirits reached 523,000 cases in 2015, adding more than 10% of additional volume to U.S. craft distiller total sales.
• Employment and investment are on the rise among craft distillers. In 2016, the industry employed over 12,000 full-time employees (FTEs). Investments by the U.S. craft industry have reached close to $300 million in 2015, which primarily covered the build out of tasting rooms and other visitor experiences, equipment to increase production capacity, and associated labor costs.
• Geographically, the study found the US craft distilling market to be “concentrated”, with the top five states (states containing the highest number of craft distilleries) making up 35.6% of the category: California, New York, Washington, Colorado and Texas.
• The next five states – Oregon, Pennsylvania, North Carolina, Ohio and Florida – comprise an additional 16.5% of the market.

Source: The Spirits Business; Craft Brewing Business