U.S. craft spirits topped $7.9 billion in sales in 2022, growing 5.3% in value and 6.1% in volume, but slowed considerably from the year prior, according to a new report.
The data comes from the 2023 Craft Spirits Data Project, released by the American Craft Spirits Association (ACSA) and Park Street yesterday.
While there was still growth in 2022, the numbers dipped from 2021 when U.S. craft spirits volume grew by 10.4% and value by 12.2%. But the 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.
While there is no legal definition of a craft distillery, the data project defines them as licensed U.S. distilled spirits producers that have removed 750,000 proof gallons 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.
Number of Craft Distillers Slows, Production Stays Concentrated
From August 2022 to August 2023, the number of active craft distillers in the U.S. grew by 2.4% to 2,753. That’s a dramatic dip from a 17.4% rise in 2021.
Craft spirits production still remains concentrated: less than 2% of craft spirits producers are responsible for over 54% of the cases produced while 89% of producers are classified as small and are responsible for approximately 11% of cases produced.
Distilleries are moving up in size tiers, with mid-size driving growth for the craft category: the number of medium craft producers has more than doubled, from 106 in 2017 to 249 in 2022.
Home State Sales Critical, Exports Slow
Home states still represent a key sales opportunity for distillers, particularly smaller and medium-sized operations, while large producers placed more emphasis on exports. Craft spirits sales remained almost evenly split between the home state (47.4%) and other states (52.6%) in 2022. Small and medium sized producers do the majority of business within their home states.
Export growth was up 4.3% over 2021, reaching 171,000 9-liter cases but a drastic dip from the 58% growth in 2021. Those exports still surpassed pre-pandemic heights of 155,000 9-liter cases in 2019, but the category is still recovering from the long-term export implications from tariffs and has not reached pre-tariff levels seen in 2017.
Top Five Craftiest States
As of 2022, the American South has the highest concentration of craft distilleries, surpassing western states which typically had higher numbers. California, New York, Texas, Pennsylvania, and Washington lead the pack. Texas has made the most headway, up from number four in 2020, and number five when the data project kicked off seven years ago. Washington fell into the fifth slot, having been third in 2020. The top five states by number of craft distilleries make up 32.4% of the U.S. craft distiller universe.