2023 Direct-to-Consumer Beer Shipping Report

The third annual Direct-to-Consumer (DtC) Beer Shipping Report, presented by Sovos ShipCompliant and the Brewers Association, finds that consumer interest and enthusiasm for having their favorite brews shipped to their front doors has continued to grow. The report offers an in-depth analysis of a consumer poll and an economist’s review of the DtC beer shipping market.

The Sovos ShipCompliant/Harris Poll consumer survey finds that state laws are not keeping up with consumer demand. Nearly eight out of 10 (81%) regular craft beer drinkers have tried a beer while traveling that they wish they could purchase but it’s not available near their home. Additionally, 88% say there should be greater legal access to DtC beer shipping. However, as of March 2023, just 11 states and Washington, D.C. currently permit DtC beer shipping. (Regular craft beer drinkers are defined as those who drink craft beer at least once per month.)

Read the 2023 Direct-to-Consumer Beer Shipping Report now:

Missed revenue for states and craft brewers

The potential market scope for DtC beer has yet to reach its peak, but the numbers show that consumers are willing to spend the money for craft beer to be shipped directly to their residence. In fact, 72% of regular craft beer drinkers report they would spend $50 or more per month if they could, while 51% say they would spend $100 or more per month.

The survey revealed the following key takeaways:

DtC demand is growing. While regulation in the beer industry continues to hinder DtC growth, consumer intent and desire to make such purchases is on the rise. The want to purchase craft beer DtC has increased among regular craft beer drinkers from 54% in 2022 to 61% in 2023.
Increased interest for out-of-state brews. The majority of regular craft beer drinkers (79%) are likely to purchase craft beer via DtC shipping in the future, an increase from the 75% who said they would do so in 2022.
DtC shipping can lead to increased sales. Hear it straight from the source: 85% of regular craft beer drinkers say they would be likely to try a brewery’s latest beer if there were a DtC shipping option, with 82% saying they would be more likely to purchase more frequently from that brewery.

The Direct-to-Consumer Beer Shipping Report also profiles DtC craft beer drinker demographics. Download your complimentary copy of the report today for an in-depth look at the consumer and producer sides of this emerging market.

*THIS SURVEY WAS CONDUCTED ONLINE WITHIN THE UNITED STATES BY THE HARRIS POLL ON BEHALF OF SOVOS SHIPCOMPLIANT FROM JANUARY 3-5, 2023 AMONG 756 U.S. ADULTS AGES 21 AND OLDER, AMONG WHOM 568 DRINK CRAFT BEER AT LEAST ONCE PER MONTH. THE SAMPLING PRECISION OF HARRIS ONLINE POLLS IS MEASURED BY USING A BAYESIAN CREDIBLE INTERVAL. FOR THIS STUDY, THE SAMPLE DATA IS ACCURATE TO WITHING +/- 4.2 PERCENTAGE POINTS USING A 95% CONFIDENCE LEVEL. FOR COMPLETE SURVEY METHODOLOGY, INCLUDING WEIGHTING VARIABLES AND SUBGROUP SAMPLE SIZES, PLEASE CONTACT SOVOS SHIPCOMPLIANT AT HELLOSHIP@SOVOS.COM.

Keep Pace with Changing Requirements in the Beer Industry with Sovos ShipCompliant

Introduction

Breweries of all sizes are aware of the rapidly changing regulatory requirements for both three-tier and direct-to-consumer (DtC) shipping channels. Expanding product lines, moving distribution into new territories and accounting for all federal and state laws can put extra pressure on the organization. What does it take to maintain compliance without compromising other aspects of your brewery’s business?

Here are real-world examples of how Sovos ShipCompliant can help those in the brewing industry get a handle on compliance.

“Despite the patchwork and difficult landscape of malt beverage compliance, our team at Sovos ShipCompliant has gone above and beyond to ensure a smooth, functional, effective solution for managing filings, registrations, and compliance. We’re grateful for the time savings associated with managing disparate state laws and policies, as well as the peace of mind it offers.”

Hill Farmstead Brewery

Use case #1: Brewery Automates Manual Processes & Centralizes Compliance

Colorado-based Left Hand Brewing Co. struggled with scaling issues as it entered into new states, with employees manually completing all paperwork. The tedious and time-consuming process raised the risk of missing deadlines and overwhelmed the staff. Additionally, Left Hand had limited visibility into specific state compliance requirements, pushing employees to guess on numerous issues.

The Sovos ShipCompliant Market Ready solution helped remove guesswork from Left Hand’s compliance efforts, while also automating the manual processes necessitated by mountains of paperwork. Compliance was centralized into a single platform, ensuring accuracy and providing peace of mind. The brewery can now expand into new regions faster than before and ensure that its product is on shelves when expected.

“We’ve grown too much to let guesswork lead us to the next step. [ShipCompliant] helped us in that regard [with] a centralized point where everything lives. It’s as easy as the push of a button to get all of our paperwork done.” -Director of Accounting & Administration at Left Hand Brewing

Director of Accounting & Administration

Left Hand Brewing

Use case #2: Improved Registration Process Helps Brewery Focus on Biz Development

Uinta Brewing had manual processes in place for maintaining compliance and conducting state product registrations. This inefficiency put extra pressure on employees and prevented them from being able to properly focus on other business priorities.

With Sovos ShipCompliant 3-Tier Reporting and Market Ready solutions, Uinta has one platform where it can get answers on state requirements, register a product and keep track of licenses and documents. This helps the brewery save time and reduce the risk of errors.

Uinta Brewing now has a “one-stop shop for regulatory compliance,” according to its director of regulatory compliance. Employees reduced their time spent on compliance from weeks to days and eliminated the risk of getting stuck on small regulatory issues. The brewery can get products to the market and in the hands of their customers faster.

“It comes down to confidence—knowing that we can go to one place and get answers on state details and state requirements, and then in that same platform be able to actually register a product and keep track of licenses and other documentation. It's the Swiss Army knife of regulatory compliance.”

Director of Regulatory Compliance

Uinta Brewing

What Sovos ShipCompliant can do for you

Direct

Real-time compliance checks against more than 1,000 state rules and regulations
Rooftop-level, alcohol-specific tax determination
Streamlined reporting
Integrations with all major DtC e-commerce, point-of-sale and fulfillment systems

Market Ready

Streamlined state product and brand label registrations
Integrated directly with 10+ government systems, including the TTB
Increased visibility with insight into ETAs for federal and state registration approvals
A central repository for all brand compliance data, state requirements and forms, and license renewal deadlines

Want to learn more? Contact our team to find out how Sovos ShipCompliant can help.

Maintain Compliance in the Ever-Evolving Wine Market with Sovos ShipCompliant

Introduction

Whether you’re a large-scale winery looking to start a wine club or subscription service, or you’re a small vineyard that needs to improve its approach to wholesale compliance, regulations and requirements can quickly change. How can you maintain compliance without losing sight of other key business initiatives?

Here are real-world examples of how Sovos ShipCompliant can help those in the wine space get a handle on compliance.

Use case #1: Online Wine Club Saves Money on Reporting, License Management

Vegan Wines is a subscription-based club and online wine club that ships to 38 states. The startup did not have the staff to dedicate ample time to track and manage compliance for every order. The team spent large amounts of time processing online and wine club orders through the system, used spreadsheets and manual data entry to check compliance and then individually forwarded the information on to their fulfillment partner.

Sovos ShipCompliant Direct helps manage shipping compliance, taxes and licenses through one solution. Direct assists with streamlining the reporting process, reduces the risk of errors and incorrect reporting, and keeps all licensing information in one place.

Vegan Wines saves about $10,000 per year, or about 10 minutes per order, by using Direct.

“We decided to go with ShipCompliant thanks to the integrations it has with our fulfillment partner, allowing us to automatically pass orders from our website through ShipCompliant, to our warehouse, which then fulfills and ships the orders. We could also receive the tracking information back through ShipCompliant, making the process much easier for all parties and bringing a level of automation we did not have previously.”

Operations Manager

Vegan Wines

Use case #2: Winery Eliminates Manual Reporting & Improves Customer Experience

Family-owned and operated winery Moshin Vineyards produces approximately 10,000 cases annually with 50/50 direct-to-consumer and three-tier distribution. It was replicating state reporting forms in spreadsheets, manually transferring data from hard copies and then submitting forms at the end of each month. Employees had to know each state’s individual rules, looking up changes as they occurred.

ShipCompliant Direct offers a comprehensive resource for state regulatory information. Moshin receives automatic notifications on state reporting due dates, license expirations and custom customer shipping email notices, ensuring customers get their packages.

Moshin saves over 50 hours a month on checking compliance and knows that its team will be quickly informed of any compliance issues, eliminating shipping problems.

“We absolutely fell in love with the idea of how [ShipCompliant] managed the DtC compliance process. Then we found software that would work with it, not the other way around. We were up and running within a month and humming along just perfectly normal within a quarter. ShipCompliant makes it possible to do our job and we can trust that [their] information is accurate. You just can’t put a price on customer satisfaction and peace of mind.”

Director of Hospitality

Moshin Vineyards

Use case #3: Importer & Wholesaler Streamlines Compliance

California-based importer and wholesaler Martine’s Wines needed better structure and efficiency for its compliance processes. A lack of a reliable system made it difficult to know when a state license might need a renewal, when to provide notice for when products were registered to state distributors, or when to inform clients on state license and shipping law requirements—which are often in flux.

The Sovos ShipCompliant 3-Tier Reporting and Market Ready solutions helped Martine’s Wines gain greater visibility into the business with regulatory compliance, license management and automated registrations. The products provided a centralized database, shortened the time to market for new products and better empowered employees to bring the focus back to core business priorities.

“Having these compliance-related resources at my fingertips gives us better peace of mind that our business is following the rules because anything can be looked up in a matter of seconds.”

Vice President

Martine’s Wines

What Sovos ShipCompliant can do for you

Direct

Real-time compliance checks against more than 1,000 state rules and regulations
Rooftop-level, alcohol-specific tax determination
Streamlined reporting
Integrations with all major DtC e-commerce, point-of-sale and fulfillment systems

Market Ready

Streamlined state product and brand label registrations
Integrated directly with 10+ government systems, including the TTB
Increased visibility with insight into ETAs for federal and state registration approvals
A central repository for all brand compliance data, state requirements and forms, and license renewal deadlines

Want to learn more? Contact our team to find out how Sovos ShipCompliant can help.

2022 Direct-to-Consumer Spirits Shipping Report

The first annual Direct-to-Consumer (DtC) Spirits Shipping Report, presented by Sovos ShipCompliant and the American Craft Spirits Association (ACSA), finds that consumers want their favorite spirits shipped to their front doors, and would order on a regular basis if it were more widely available. The report offers an in-depth analysis of a consumer poll and ACSA’s take on the opportunities for the direct-to-consumer spirits sales market.

The Sovos ShipCompliant/Harris Poll consumer survey finds that 80% of regular craft spirits drinkers would purchase spirits DtC monthly if permitted in their state—yet spirits DtC interstate shipping is only currently available in eight states and Washington, D.C. The potential of this mostly untapped market is huge. (Regular craft spirits drinkers are defined as those who drink craft spirits at least once per month.)

Get the report now:

Direct-to-Consumer Spirits Shipping in 2022

Craft spirits producers can capitalize on consumer wishes

The survey revealed the following key takeaways:

A limited but (slowly) growing marketplace. Even with broad interest for DtC liquor shipping of spirits, state legislators are hesitant to make changes to enable these types of sales. Some states continue to limit spirits shipping, while others are moving forward. For example, Maine failed to enact legislation to move DtC liquor shipping forward but Vermont liberalized the rules for selling spirits-based ready-to-drink (RTD) beverages.
We want spirits, yes, we do. Nearly half (46%) of regular craft spirits drinkers want craft spirits shipped directly to them via a third-party carrier, which is almost on par with the 49% that would like beer shipped direct to their home or someone else’s.
An opportunity lost. With only nine U.S. locales—eight states and Washington, D.C.—allowing interstate DtC spirits shipping, there is clearly an underserved market for direct-to-consumer alcohol sales. Just under half of regular craft spirits drinkers who are likely to purchase craft spirits DtC say they would spend, on average, $108 a month.

The Direct-to-Consumer Spirits Shipping Report also profiles DtC craft spirits drinker demographics. Download your complimentary copy of the report today for an in-depth look at the consumer and producer sides of this emerging market.

*These surveys were conducted online within the United States by The Harris Poll on behalf of Sovos ShipCompliant between October 20-25, 2022 among 1,958 adults ages 21+, among whom 618 drink craft spirits/liquor at least once per month, and October 27-31, 2022 among 1,942 adults ages 21+, among whom 588 drink craft spirits/liquor at least once per month. For complete survey methodologies, including weighting variables and subgroup sample sizes, please contact helloship@sovos.com.

2022 Sovos ShipCompliant Beverage Alcohol Summit Recordings

The 2022 Sovos ShipCompliant Beverage Alcohol Summit took place virtually, March 16-17, 2022. The event turned the spotlight on challenges and opportunities across both the three-tier and DtC distribution channels for beverage alcohol companies of all types..

Access all recordings from the 2022 Beverage Alcohol Summit here — free! Here’s a look at what’s included:

Growing a Beverage Alcohol Business With Empathy
Alexi Cashen, Elenteny Imports and St Hildie’s

Analysts’ Lens: Beverage Alcohol in Strange Times
Danny Brager, Brager Beverage Alcohol Consulting; Dale Stratton, Independent Consultant; Wine Market Council

Executive Order on Competition: What Might Lie Ahead
Christopher Riano, Holland & Knight LLP; Kaj Rozga, Davis Wright Tremaine LLP; Alex Koral, Sovos ShipCompliant (moderator)

TTB Regulatory Updates
Dave Wulf, TTB; Chris Thiemann, TTB; Alex Koral, Sovos ShipCompliant (moderator)

Regulatory Landscape for BevAlc: Today, Tomorrow, and Post-Pandemic
Adena Santiago, McDermott Will & Emery; Ryan Malkin, Malkin Law; Alex Koral, Sovos ShipCompliant (moderator)

Direct-to-Consumer Spirits Shipping: Why and How Now
Margie Lehrman, American Craft Spirits Association; Bob Budoff, DISCUS

Access all recordings from the 2022 Beverage Alcohol Summit here — free!

Top 3 Things That Can Go Wrong if You’re Non-Compliant

The most essential considerations for compliant direct-to-consumer shipping

The Case for Beer Direct-to-Consumer (DtC) Shipping

Introduction

The wine industry has been shipping direct-to-consumer (DtC) for more than 15 years, and this once-novel market expansion has proven win-win-win for producers (business growth), states (increased tax revenue) and consumers (increased choice) alike. And yet, beer DtC remains a much narrower market. Why?

Beer producers aren’t the only ones asking that question. Sovos ShipCompliant’s 2021 Direct-to-Consumer Beer Shipping report found that 84% of regular craft beer drinkers say they want to be able to legally purchase beer via DtC shipping to their home. Furthermore, the inequity with the current laws seems to displease most, with more than four in five regular craft beer drinkers (84%) saying that current beer shipping laws in the U.S. should be updated to make it legal in more states.

Sovos-ShipCompliant-lessons-from-wine-shipping

Lessons from 15 years of DtC wine shipping

DtC wine shipping is a $4.2 billion market as of 2021. Because DtC shipping and three-tier distribution complement one another, the three-tier system has continued to thrive in its central role in alcohol distribution even as the DtC channel has grown. In fact, while DtC wine shipping has been in place for 15+ years, it makes up 10%-11% of total off-premise wine sales in the U.S. (as estimated by Jon Moramarco, managing partner at bw166).

The success the DtC wine channel has found has gone hand in hand with shippers’ commitment to following state regulations and tax requirements. DtC wine shippers participate in a safe, well-regulated market, complying with varying state regulations that include:

Getting properly licensed by the destination state;
Abiding by regulatory rulings of the destination state;
Conducting age checks and preventing sales to minors; and
Correctly determining, paying and reporting on taxes owed to the states.

Additionally, shippers abide by destination states’ jurisdiction in terms of other producer-enablement rules that include customer volume limits, the registration of brand labels and brand ownership requirements.

Distinct product offerings

Similarly, beer lovers are not necessarily looking to ship products that can be easily found at local retail stores. However, breweries can offer highly allocated and limited run products that consumers would otherwise have difficulty gaining access to.

Thus, there is generally no direct competition between the products available through these different channels — though a producer that grows its fan base via DtC shipping can expect to see increased demand for their products sold through the three-tier system. There is every reason to expect that as more states open to DtC beer shipping, the beer industry will follow wine’s lead in offering distinct products via different channels.

An equitable marketplace?

Across the vast majority of the U.S. — 46 states and the District of Columbia — DtC wine shipping is permitted. The map of where beer producers are legally entitled to ship DtC is much, much narrower.

Sovos-ShipCompliant-equitable-marketplace

* Oregon will only issue licenses for beer shipping to breweries located in states that themselves permit DtC shipping of beer

* Pennsylvania will only issue licenses for beer shipping to brewers that hold specific wholesaler or off-premises retailer licenses; a manufacturing license alone, even one that grants such permissions, is insufficient

Accurate to October 2021

Only 12 locales are open for DtC beer shipping, compared to wine’s 47:

As beer producers have demonstrated through their compliant participation in the three-tier system, they are readily equipped to mimic the compliant behaviors of their winery counterparts in the DtC shipping channel.

Sovos-ShipCompliant-how-states-benefited

How states have benefited from DtC shipping

Naturally, states are eager to maximize the tax revenues they collect, as taxes fund their service to the public, including infrastructure, education and social services.

The compliant behavior of DtC alcohol shippers to date has enriched states’ coffers to the benefit of many. As a leading beverage alcohol compliance solutions provider, Sovos ShipCompliant has facilitated states’ securing hundreds of millions in tax revenue each year. Because the footprint for legal DtC shipping of non-wine beverage alcohol is limited, the vast majority of this tax revenue is driven by DtC wine shipments.

DtC Tax Revenue Paid to States Via Sovos ShipCompliant

Sovos-ShipCompliant-dtc-spirits-tax-revenue

States opening to the DtC shipment of beer would only grow these welcome additional revenues.

In conclusion

The case for beer DtC shipping is clear. The demand is strong from producers and consumers alike, and states stand to benefit greatly. More than 15 years of complaint DtC wine shipping have paved the way for the healthy expansion of DtC beverage alcohol shipping.

Beer producers simply want the same kind of DtC market access that wine shippers enjoy. The data shows that DtC wine shipping is profitable for states and can be done safely. Consumers are ready for more choice and are already utilizing the DtC market. The time for expanded DtC beer shipping permissions is now.

Learn how Sovos ShipCompliant can help you manage your taxes and compliance for DtC shipping.

Talk to an expert

The Case for Spirits Direct-to-Consumer (DtC) Shipping

Introduction

Spirits producers aren’t the only ones asking that question. A Distilled Spirits Council of the United States (DISCUS) survey shows overwhelming consumer demand for DtC shipping of distilled spirits. Eight out of 10 consumers surveyed said distillers should be allowed to directly ship their products to legal-age consumers in any state. Additionally, some 76% said they would consider purchasing spirits online shipped directly from distillers to them from outside or within their state.

Lessons from 15 years of DtC wine shipping

Getting properly licensed by the destination state;
Abiding by regulatory rulings of the destination state;
Conducting age checks and preventing sales to minors; and
Correctly determining, paying and reporting on taxes owed to the states.

Sovos-ShipCompliant-case-for-dtc-spirits

Distinct product offerings

The products that reach consumers through the DtC wine shipping channel are not the same ones they are shopping for at their local retail outlets. Rather, wineries typically offer special allocations or other higher-end, limited offerings via the DtC channel — compared to more inexpensive wines that are widely available at retail or for which a consumer would be hard-pressed to justify the shipping cost. In fact, the average price per bottle of wine shipped DtC hovers around $40, three to four times the average price paid at grocery stores and liquor shops.

From a DtC shipping standpoint, a bottle of wine and a bottle of spirits look a lot alike — and as in wine, spirits producers offer a number of speciality or limited production releases — so there is every reason to expect that as more states open to DtC spirits shipping, the spirits industry will follow wine’s lead in offering distinct products via different channels.

An equitable marketplace?

Across the vast majority of the U.S. — 46 states and the District of Columbia — DtC wine shipping is permitted. The map of where spirits producers are legally entitled to ship DtC is much, much narrower.

* Oregon will only issue licenses for beer shipping to breweries located in states that themselves permit DtC shipping of beer

Accurate to October 2021

As the map demonstrates, the only seven locales open for DtC spirits shipping are Alaska, D.C., Kentucky, Nebraska, Nevada, New Hampshire, North Dakota and (in very limited fashion) Rhode Island, compared to wine’s 47.

As spirits producers have demonstrated through their compliant participation in the three-tier system, they are readily equipped to mimic the compliant behaviors of their winery counterparts in the DtC shipping channel.

What's fair for wine is also fair for spirits

How states have benefited from DtC shipping

Naturally, states are eager to maximize the tax revenues they collect, as taxes fund their service to the public, including infrastructure, education and social services.

DtC Tax Revenue Paid to States Via Sovos ShipCompliant

States opening to the DtC shipment of spirits would only grow these welcome additional revenues.

In conclusion

The case for spirits DtC shipping is clear. The demand is strong from producers and consumers alike, and states stand to benefit greatly. More than 15 years of complaint DtC wine shipping have paved the way for the healthy expansion of DtC beverage alcohol shipping.

Spirit producers simply want the same kind of DtC market access that wine shippers enjoy. The data shows that DtC wine shipping is profitable for states and can be done safely. Consumers are ready for more choice and are already utilizing the DtC market. The time for expanded DtC spirits shipping permissions is now.

Learn how Sovos ShipCompliant can help you manage your taxes and compliance for DtC shipping.

Talk to an expert

DtC Alcohol Shipping Essentials: Getting Started & Staying Compliant

A free ebook for DtC shippers of wine, beer, spirits, cider and sake

Direct-to-Consumer Alcohol Shipping Essentials: Getting Started and Staying Compliant

Direct-to-consumer (DtC) alcohol shipping continues to grow in popularity. The rise of ecommerce along with a global pandemic have fueled consumers’ desire to have products shipped directly to their doors. Producers, retailers and others would-be shippers have started exploring how best to meet this increased demand—and finding that while DtC shipping represents an excellent channel for expansion, there are numerous rules and regulations to consider.

DtC shipping laws vary from state-to-state and can even diverge from one jurisdiction to another within a state. Understanding those nuances, and how to get started in DtC alcohol shipping in the first place, is not a simple task. Laws can and do change, further increasing the difficulty of maintaining compliance.

This free ebook details the basics of what you need to know about getting started, staying compliant and finding success in DtC alcohol shipping.

Topics include:

How to Get a License
Age Verification
Customer Aggregate Volume Limits (CAVL)
Brand Label Registration
Alcohol Not of Own Production (NOOP)
Tax Determination and Reporting

Download your free copy of this in-depth information today.

2023 Direct-to-Consumer Beer Shipping Report