“We all have one thing in common that is the DNA of the love of earth, the love of the grasses that grow; wheat, barley, corn, and from these grasses we produce whiskey. We also have the DNA of love of fermentation and of course the DNA of love of the distilling process.”
With these words, American Distilling Institute President Bill Owens kicked off the 14th Annual Craft Spirits Conference and Vendor Expo. The 2017 conference was the most successful to date, drawing 1,700 attendees and 164 exhibitors, visitors from almost all 50 states including more than a dozen from foreign countries, confirming the ADI Conference’s position as the leading craft-distilling event in the country.
Prior to Owens’s words, Karen Hoskin, founding partner, President and CEO of Montanya Distillers, delivered the keynote address. Hoskin, 2013 recipient of the Bubble Cap Award for Distillery of the Year, made a call for unity, diversity and sustainable practices in the resurgence of U.S. distilling.
Hoskin said, “Creating a unified voice for what makes good sense for this industry is a good idea.”
Hoskin calculated that each conference she attends adds 12 cents to the cost of every bottle she produces and called for the building of bridges between ADI and ACSA. “We could have two industry groups that are holding different conferences, or we could try to have one really amazing powerhouse conference that accomplishes both organizations’ set of objectives,” said Hoskin.
“It is not something that is simple and has an easy solution,” she said, “but I did want everybody in this room to know that a conversation has begun.”
Hoskin summed up the influence ADI has had on her business. “The conference sessions I have attended here have really created the baseline for so much of what has mattered to me as a distillery owner. This is where I found my corks and labels and pumps and bottles, and most of the partners I have are out in that room,” she said. “When I have big ideas and goals, Bill Owens and his staff are some of the first people that I run them by. So, I feel such a strong sense of how important this organization has been to me, and how important it can be moving forward.”
Her keynote also ranged over subjects of diversity and her actions toward making Montanya Distillers a zero-waste facility. Hoskin’s “10 Ways I Freed My Distillery from Environmental Irresponsibility” appears on p. 66 in this issue.
Research economist Michael Kinstlick followed the keynote with his annual “State of the Industry Address” and confirmed with statistics something most people in the room sensed: The craft-spirits community is growing without ceiling. Analyzing data from the ADI’s Survey of Craft Distillers and listings in the ADI Directory, he worked backward from the 2,100 Distilled Spirits Plants (DSPs) currently listed by the Alcohol and Tobacco Tax and Trade Bureau (TTB), identifying those that are large producers, rectifiers, virtual producers, fuel ethanol plants and those under construction to estimate the current number of operational craft distilleries at approximately 1,150.
The number of new entrants continues to double every two or three years, and the number of TTB permits currently increases at a rate of approximately 250–300 new DSPs a year. Kinstlick said there is “still tremendous room to grow in the craft distilled spirits market.” The craft-spirits market is following a classic resurgence model and growth may slow a little in the next few years as the market absorbs new entries, but the indicators are for more growth. He said, “I think the opportunity set for craft distillers going forward over the next ten, fifteen, twenty years is still enormous.”
Tax Advisor to the Senate Finance Committee Christopher Arneson followed Kinstlick with more good news, and a call for action. Arneson talked about the high hopes for the Craft Beverage Modernization and Tax Reform Act of 2017, a bill that combines the interests of brewers, distillers, wineries and cider makers. For distillers, S 236 and HR 747 are bills that would reduce the Federal Excise Tax (FET) from $13.50 to $2.70 on the first 100,000 proof gallons of production. These bills are in front of a U.S. Congress with a mood toward tax reform. “There is a good chance this could be attached to whatever tax reform or other large tax-cut package we expect to see,” he said.
Arneson told distillers that if they want to see the reform enacted, they should speak with one unified voice in favor of The Craft Beverage Modernization and Tax Reform Act of 2017 and invite their elected representatives to their distilleries.
“Invite lawmakers out to your operations,” said Arneson. “Show them the good work that’s going on. Show them the investments you’re making. It’s much easier to convince somebody you that are doing good work when they can see it on the ground, when they can see people working in high-skilled, well-paying jobs. That helps you tell the story that we should be doing more of it.”
“You are creating new products, you’re growing jobs, you’re growing local economies and those are very, very compelling stories to tell the lawmakers,” said Arneson. “Find ways to make lawmakers be part of your story, or to make your story part of their story, so they can show they are working together with folks in their communities who are creating jobs.” He said distilleries should keep their lawmakers updated and get specific about what new equipment would mean to their operation and how additional employees would benefit their communities.
“This is in your hands,” said Arneson.
The crowd then flooded into the expansive vendor expo with ample time to browse before breakout sessions began. There was a lot of activity on the floor and good rapport among the vendors. Results of our post-conference survey show overwhelming agreement on the quality of the expo floor, and the vendors were genuinely happy to be there.
Breakout sessions covered a broad spectrum from the latest distilling technologies to tax incentives, working with TTB, partnering with farmers, OSHA requirements and crowdfunding. Indiegogo Co-founder Slava Rubin presented a lunchtime session with Pia Carusone outlining how Carusone’s Republic Restoratives Distillery and Craft Cocktail Bar raised a record $119,643 startup money through crowdfunding.
This year’s conference featured a variety of sessions and panels devoted to topics of branding, distribution and sales, and the message was clear: As the craft-distilling industry begins to mature, so does the level of competition. As DSPs continue to proliferate, new entrants are finding a very different market compared to three or five years ago. Growing consumer sophistication and interest in the craft movement is now driving a demand for the highest levels of quality in spirits and packaging.
A delegation from the Australian Distillers Association livened up the conference and shared freely from their bottles, which took home a number of awards in the international division of the 2017 Judging of Craft Spirits.
The top medalists were announced Tuesday night, in a streamlined ceremony. At a spirits tasting sponsored by the Maryland Distillers Guild, bronze and silver medals were handed out, allowing those winners to celebrate with their peers and sport their newly-minted hardware to dinner. During the festive gala dinner, ADI staff announced the gold medal, double-gold medal, best of category, best of class and packaging award winners. The evening was capped off with recognition of Distillery No. 209 for Outstanding Contribution to Gin, and with Cedar Ridge Distillery taking home the 2017 Bubble Cap Award for Distiller of the Year (coverage on p. 30).
On Wednesday, ADI hosted the 2nd annual Ladies of American Distilling (LOAD) networking luncheon featuring Co-founder Samantha Katz. “The luncheon was our largest gathering to date, with over 120 women present,” Katz said later. “It was inspiring to be in a room filled with so many women in distilling!”
Katz’s address covered the genesis, mission and future trajectory of LOAD, empowerment, access to capital, brand building and successes to date in raising more than $30,000 for nonprofits, and future exciting LOAD projects. ADI looks forward to further supporting LOAD and women in distilling in general.
Katz said, “I can’t thank ADI enough for giving women in the industry the opportunity to gather, share and engage. Cheers!”
The luncheon concluded with Meg MacWhirter, Co-founder of MISCellaneous Distillery, thanking the group for contributing to a clothing drive to benefit Attire 4 Hire and Suited to Succeed that was organized in connection with the conference. Together, these charitable organizations clothe thousands of men, women and children for job interviews, court dates and other important life events. In addition to providing professional attire, they offer interview training, basic work training and support networks to help people become more successful in life.
MacWhirter, who like so many of the women in attendance traded her corporate attire for more casual distiller’s clothing, said, “The suits that we no longer need can make a difference in someone’s life.”
This year’s excitement and energy was palpable, and ADI is looking forward to an ever larger and more exciting event in Portland next year (March 26 through 31, 2018).