Can Craft Whiskey Survive The Pandemic?

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Distillers using a hydrometer to measure alcohol content at a distillery in Portland, Maine. Smaller scale distillers are struggling in the Pandemic. (Photo by: VW Pics/Universal Images Group via Getty Images) VW PICS/UNIVERSAL IMAGES GROUP VIA GETTY IMAGES

Ten years ago, as craft distillers pursued their dreams, the market saw new American whiskey styles. Young and inspired distillers were smoking grains, distilling unique malts and conducting barrel finishes unheard of on this side of the pond.

Consumers reaction ranged from “gross” and “meh” to “brilliant” and “wow.” While Kentucky certainly maintained its stronghold on American whiskey, the craft distillers showed the world that their whiskey can be as formidable as anything made in the Bluegrass State.

And in the past couple years, we’ve seen an uptick of 3- to 6-year-old craft distilled whiskeys, many of which are on the verge of out tasting the best of Kentucky. In a blind tasting last year, Woodinville, straight off the shelf, nearly beat Pappy Van Winkle 23-year-old, while Dad’s Hat Pennsylvania Rye is out tasting the Indiana ryes most people are bottling.

I genuinely thought 2020 would be craft’s year in the whiskey space.

Then, like a lot of things, Covid brought a baseball bat and smashed distribution channels, tasting rooms and more. The government restrictions have made it difficult for smaller distillers to survive.

According to data from the American Craft Spirits Association, which defines craft distilleries here, more than 50 percent of distilleries have laid off employees during the Pandemic and more than 70 percent of craft distilleries report declines in orders from their distributors. And nearly 85 percent of craft spirits producers report sales are down.

So, while media wants to paint a rosy picture of us all in our homes, feet propped up and drinking martinis on a zoom call, craft distillers are hemorrhaging and the alcohol industry is not doing as well as people are wrongly claiming.

But make no doubts about it, Brown-Forman, Jim Beam, Sazerac, Heaven Hill and other larger distillers, while certainly feeling the Pandemic, will survive this.

I fear Covid’s hammering nails in craft distiller coffins. If 2020 ends the craft distilling movement, the future of American distilling is in the hands of publicly traded companies who care more about shareholders than true innovation and quality. Craft distillers keep the future of American distillation honest and pure to the yet-to-be-discovered craft. You may not like their four grain bourbon or appreciate chocolate malts, but craft is bringing in new talent and ideas that distilling industry needs. We simply cannot lose them.

Currently, craft distillers are lobbying Congress for a relief package that will help them survive.

In 2017, President Trump signed into law a two year federal excise tax (FET) break for craft distillers, which allowed them to pay only $2.70 on the first 100,000 proof gallons. It was extended in the early Covid relief packages, but is set to expire December 31. If it is not extended, craft distillers will see a 400% tax increase, which, coupled with tariffs and the current business climate, will decimate the industry.

“Our nation’s craft distillers are deeply, profoundly impacted by COVID-19, and our community is facing a potential industry-wide collapse without further assistance,” says Margie Lehrman, CEO of the ACSA. “Immediate federal relief through a reduced FET is no longer just an optimistic request but an urgent, critical need, and we are optimistic that we will be able to work collaboratively with Congress this fall as together we build a lifeline for our nation’s 2,000 craft spirits producers.”

There’s another thing that you can do. Buy from craft distillers. Find a craft-made product and support them. You can visit websites like Seelbachs and support Spirits of French Lick, an Indiana distiller that’s giving Kentucky a run for its money. Or go to CraftShack.com and buy a bottle of Brooklyn’s King’s County, which is making some tasty stuff. Or hit up Mash & Grape and pick up a bottle of Texas’ Garrison Brothers.

These distilleries did not exist 20 years ago, and they’ve helped forge the modern industry. If we do not support them today, they will not be here tomorrow.

Forbes

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