It’s an equity issue, Ryan Friesen, head distiller, Blinking Owl Distillery, Santa Ana, Calif., says. Wineries and breweries can ship direct to consumers in most states, but distilleries can’t.
“We’re 10 minutes south of Disneyland,” he says, “and we get a lot of visitors from there who don’t understand why a California winery can ship wine direct to their home, but we can’t.”
Right now, California distilleries are able to ship spirits to consumers who visit their tasting rooms under an emergency order signed by Gov. Gavin Newsom (D). That order expires Jan. 1, 2022. It’s been a lifeline during the Covid pandemic, Friesen says. “We estimate it has had a $65,000 impact, which is equal to the cost of a worker on the payroll.”
That, as much as anything, explains why Distilled Spirits Council of the U.S. (DISCUS), American Craft Spirits Association (ACSA) and American Distilling Institute (ADI) are banding together to make passing spirits direct-to-consumer laws a top priority for their organization.
“In states where craft distillers have been permitted to ship their spirits products direct-to-consumer, they report it has been a saving grace and a much-need source of revenue during the hardships of the pandemic,” said ADI President Erik Owens pointing to an ADI survey from earlier in the year. “Let’s face it. The pandemic has completely changed the way consumers shop, and there is no going back. It’s time to do away with antiquated DTC shipping bans so distillers can meet consumer expectations and compete in the rapidly changing marketplace.”
“There is overwhelming consumer demand for direct-to-consumer shipping of distilled spirits, similar to wine,” according to a national survey released yesterday during a media briefing by DISCUS.
The survey of more than 2,000 spirits consumers, conducted for DISCUS in March 2021 by IWSR Drinks Market Analysis, was released this morning during a media briefing hosted by DISCUS.
According to the key findings presented by DISCUS Chief Economist David Ozgo:
- Eighty percent of consumers surveyed believe distillers should be allowed to directly ship their products to legal-age consumers in any state.
- At least 76% of consumers would consider purchasing spirits online shipped directly from distillers to them from outside or within their state.
- Seventy-five percent of consumers agree wine and spirits should be subject to the same laws pertaining to DTC across states.
- Close to one in two (45%) have purchased alcohol online direct from a brewery, winery or distillery.
- Thirty-eight percent of respondents report having purchased alcohol online from a producer that was shipped from outside of their state.
- The pandemic accelerated the ability and expectation to shop online. Seventy-three percent of all households surveyed shopped online for groceries, and 47 percent report they are shopping online more frequently than in the past year.
- Sixty-two percent of consumers have purchased beverage alcohol online (either through DTC or other e-commerce platforms) and consumers are equally likely to have purchased spirits (32 percent), wine (33%) or beer (31%).
“The goal of this survey was to get a better understanding of the buying behavior of spirits consumers and determine if current state laws restricting direct shipping of spirits are hampering distillers’ ability to meet the needs and expectations of their customers,” said Ozgo.
“These findings underscore that there is a very high level of interest among spirits consumers in purchasing products directly from a distiller located within or outside of their state, and having it shipped to them.”
During the briefing, DISCUS Chief of Public Policy Christine LoCascio noted that 46 states plus D.C. allow direct shipments of wine, but only 9 states plus D.C. permit DTC shipping of distilled spirits.
LoCascio added that, as a result of the pandemic, an additional seven states temporarily allowed distillers to ship to in-state consumers. The temporary measures in New York and Montana recently ended, and there are bills in some states, including California, to make the measure permanent.
“We fully support the three-tier system and view direct-to-consumer shipping as an enhancement to the evolving and modern marketplace,” said LoCascio. “Consumers agree that distillers should be able to ship their products directly to them in a safe and responsible way, just as wine has done for decades.”