Craft Liquor Is Growing at a Crazy Rate

High West Distillery in Park City, Utah.

Courtesy of High West Distillery

By James Oliver Cury Posted February 16, 2016

Whiskey makers lead a rapidly-expanding pack of American craft distillers.

For decades, the best-selling whiskies, gins, vodkas and rums came from name-brand, large-volume producers. Prohibition had annihilated smaller companies, and U.S. laws and taxes favored the big guns. By 2003, there were only 60 craft distilleries in the United States. Now, new numbers reveal that the industry is expanding at a wild rate.

Today there are 760 craft distilleries in the country, according to statistics from the American Distilling Institute (ADI) cited in Market Watch. Hundreds more will arrive by the end of 2016. Market share has doubled in the last two years. And craft distilling shows a steeper growth curve than craft beer demonstrated in the 1980s, according to Pennfield Jenson, executive director of the American Craft Spirits Association (ACSA).

"Small distillers" are defined as those that produce fewer than 100,000 nine-liter cases a year, per the Distilled Spirits Council of the United States (DISCUS). Not surprisingly, large distillers, recognizing the shift in customer preferences, are buying up some of the smaller craft companies. For example: William Grant & Sons bought Hudson whiskey, Proximo Spirits purchased Hangar 1 vodka and Stranahan whiskey, Gruppo Campari bought Forty Creek whisky, and Bacardi purchased Angel's Envy Bourbon.

Huge growth, however, is not the same thing as huge sales. The craft sector still represents only 2 percent of spirits sales. It is estimated that by 2020, that number could rise to 8 percent—which is akin to the market share of craft beer. One type of liquor is driving this growth: Whiskey makes up 37 percent of the craft spirits market. Gin, meanwhile, occupies 13 percent, vodka comes in at 12 percent, and rum registers at 10 percent of the pie.

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