DtC Spirits Shipping Continues to be Beverage Alcohol Industry Priority

Sovos ShipCompliant attended the recent American Craft Spirits Association (ACSA) Convention. Celebrating its 10th year, ACSA once again brought together “distillers and suppliers to harness the energy of the industry.” Direct-to-consumer (DtC) alcohol shipping was a recurring theme at the convention, with multiple panels discussing what changes must take place to increase DtC spirits shipping across the country.

That theme was no surprise, as the first annual Direct-to-Consumer Spirits Shipping Report, published by Sovos ShipCompliant and the American Craft Spirits Association in December 2022, found that the interest is decidedly there for DtC spirits shipping. Specifically, 46% of regular craft spirits drinkers want craft spirits shipped directly to them via a third-party carrier.

The report also showed that 80% of regular craft spirits drinkers would purchase spirits DtC monthly if permitted in their state. However, only eight states and Washington, D.C. allow for spirits DtC interstate shipping.

Given all of that, it’s welcome news to see recently proposed bills that would expand spirits DtC. New York senators introduced a bill in early 2023 that would amend the state’s current DtC shipping law, expanding it to allow for liquor to be shipped directly to consumers’ homes. Specifically, the bill would allow licensed liquor, cider and mead manufacturers to obtain an out-of-state direct shipper’s license and sell up to 36 cases of their product to New York state residents who are of legal age.

Additionally, a recent Texas bill would allow for DtC spirits and DtC beer shipping. Texas-based licensed beer and spirits producers could conduct in-state DtC shipping using licensed third-party carriers and consumer delivery services.

DtC spirits shipping is also a legislative priority for the Distilled Spirits Council of the United States (DISCUS), alongside other marketplace modernization efforts, as highlighted by DISCUS President and CEO Chris Swonger during his 2023 economic briefing.

This focus comes amid the context of spirits’ increasing market share. DISCUS reported that spirits supplier sales in the U.S. were up 5.1% in 2022, reaching $37.6 billion. Additionally, volumes increased 4.8% to 305 million 9-liter cases. This is the first time spirits supplier revenues surpassed beer, which has a 41.9% market share. DISCUS found that spirits gained market share by value of the total U.S. beverage alcohol market for the 13th straight year, as supplier sales hit 42.1%.

These findings align with Sovos ShipCompliant Product Registration Online (PRO) data, which recently found that from 2021 to 2022, tequila new product registrations were up 39%. Whiskey accounted for 34% of the total new product registrations in 2022 and had a 104% spike in Q4 year-over-year growth. Overall, spirits new product registrations increased 90% over Q4 2022.

So, what’s ahead for spirits? “Direct-to-consumer shipping is poised to be a major imperative step in the evolution of the spirits marketplace, especially for craft distilleries,” Margie A.S. Lehrman, CEO of the American Craft Spirits Association, said in a statement. “The current DtC market is small but is expected to grow and mature, particularly for smaller premium brands that consumers are demanding in different markets across the country.”