Hayward, CA — According to a new survey of American Distilling Institute (ADI) members, direct-to-consumer shipping of spirits has been a critical revenue source during COVID-19 and serves as an important alternative sales channel for those craft distillers having difficulty securing a wholesaler.
“Craft distillers have endured so much hardship this past year,” said ADI President Erik Owens, whose organization represents more than 600 small, independently owned craft distilleries. “For many, one bright spot was the ability to generate revenue by shipping their spirits directly to their customers. Craft distillers rely so heavily on tours, tasting rooms and local bars and restaurants, and all of those sales opportunities were lost for many months. Consumers wanted to support their local distillers, and one way they did that was to buy a bottle of spirits to have shipped to them — often along with hand sanitizer made by the distillery.”
Owens said that 10 states allowed some form of direct shipping of spirits prior to the pandemic, and six additional states have since passed temporary measures to permit craft distilleries to ship their products to consumers during the pandemic.
“In the states where direct-to-consumer shipping of spirits is allowed, craft distillers report that it has been a saving grace and a significant source of much-needed revenue,” said Owens. “The pandemic has completely changed the way consumers shop. To be successful moving forward, distillers must have the freedom and flexibility to ship their spirits, if that is how their consumers want to purchase and receive them. Distillers are urging their state lawmakers to pass laws allowing direct-to-consumer shipping of spirits permanently, to meet this new consumer expectation and to compete in this rapidly changing marketplace.”
The survey was conducted in January 2021 and included feedback from 269 distilleries across 42 states and the District of Columbia.
The top survey findings:
Craft Distillers are Still Struggling Due to COVID-19.
- Craft distillers saw a big hit to their revenue in 2020.
- Nearly 55% reported declining revenues
- 36% reported revenues were down by more than 25%
- The primary factor was the loss of on-site revenues after many craft distillers were forced to close their tasting rooms in 2020 to protect the public and their employees.
- 61% reported that their revenues through on-site sales were down
Direct-to-consumer shipping was a critical revenue source during the pandemic.
- Of those craft distillers who were able to take advantage of DtC shipping in 2020, they reported that DtC generated an average of 39% of their total sales. Clearly, DtC sales opened up a vital new distribution channel for many craft distillers.
- Of those craft distillers who did engage in DtC shipping, their customers were overwhelmingly in-state residents.
- 78% of craft distillers reported that 75% or more of their sales were to in-state customers.
Direct-to-consumer shipping allows craft distillers to grow their business and meet the needs of their customers.
- Nearly 69% of craft distillers reported that their wholesaler does not give their brands the necessary time and attention.
- 42% reported that it was difficult to find a wholesaler in their state.
- 62% of craft distillers who sell products outside of their home state reported that it was difficult to find a wholesaler. And, 77% reported that their out-of-state wholesaler does not give their brands the proper amount of attention.
Media Contact: Erik Owens, 925–364–4245
