Growth continued for the American craft spirits market in 2022, albeit slower than the explosive pace from recent years.
This was among the key takeaways from yesterday’s Annual Craft Spirits Economic Briefing, hosted by The American Craft Spirits Association (ACSA) and Park Street. During the meeting, Margie A.S. Lehrman (CEO, ACSA), Gina Holman (President, ACSA and Founding Partner, J. Carver Distillery) and Emily Pennington (Senior Manager, Park Street) shared sales data and insights from the 2022 calendar year.
U.S. craft spirits market volume reached 14 million 9-liter cases in retail sales in 2022, growing at an annual rate of 6.1%. In value terms, the market reached $7.9 billion in sales, growing at an annual rate of 5.3%. While there was still growth in 2022, it has slowed considerably from 2021, where craft spirits volume grew by 10.4% and value by 12.2%.
U.S. craft spirits market share of total U.S. spirits maintained a 4.9% share in volume and increased value share to 7.7% in 2022, up from 7.5% in 2021.
The number of active craft distillers in the U.S. grew by 2.4% over the last year to 2,753 as of August 2023. Similarly, growth slowed from the year prior, which reported an increase by 17.4%. Active craft distillers are defined by the ACSA as licensed U.S. distilled spirits producers that removed 750,000 proof gallons (or 394,317 9L cases) or less from bond, market themselves as craft, are not openly controlled by a large supplier, and have no proven violation of the ACSA Code of Ethics.
Despite strong economic challenges, craft producers consistently reinvested in their businesses. The total amount invested in the U.S. craft spirits segment increased by 6.5% year-over-year to $880 million. Employment numbers within the U.S. craft market also continued to increase post-pandemic, with 27,368 full-time domestic employees.
Home states still represent a critical sales opportunity for producers. Craft spirits sales remained almost evenly split between the home state (47.4%) and other states (52.6%) in 2022.
The American South has the highest concentration of craft distilleries, surpassing the West which has typically had higher numbers. Some states are “craftier” than others, with California, New York, Texas, Pennsylvania and Washington leading the pack. Texas remains the third most concentrated state, having taken the fourth slot last year in 2020. Washington fell into the fifth slot, having been third in 2020. The top five states by number of craft distilleries – CA (245), NY (210), TX (163), PA (117) & WA (156) — make up 32.4% of the U.S. craft distiller universe, and the next five states — CO (114), MI (114), NC (104), FL (91), and OR (86) — comprise an additional 18.5% of the market. The remaining states represent 49.1% of the market.
This annual presentation is known as the Craft Spirits Data Project (CSDP). Introduced in 2016, the CSDP a first-of-its-kind research initiative that aims to provide a reliable fact base for evaluating performance and trends in the U.S. craft spirits industry. The CSDP, which seeks to quantify the number, size, and impact of craft spirits producers in the U.S., is an effort led by ACSA and Park Street.
You can view the full 2023 Craft Spirits Data Project here.
Feature photo by Katherine Conrad on Unsplash
