StateWays - March/April 2017

StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions

Issue link:

Contents of this Issue


Page 36 of 51

StateWays | | March/April 2017 37 own glitter, but someone else buys Ronzoni and twine and Elmer's glue - is hers any less than an arts-and- crafts project than mine," she asks rhetorically. "No, because in the end we both crafted that necklace." Paul Hletko, founder of FEW Spirits and president of the American Craft Spirits Association, helped cre- ate the standards member-distillers must meet, and even he doesn't insist that the word means something specifi c. "'Craft' is something very challenging to de- fi ne, because at the end of the day the consumer is the one who defi nes what craft is, and has the right to defi ne it," he says. "They are also entitled to accurate information about what they buy," he adds. That refers to what whiskey writer Chuck Cowdery tagged "Potemkin distillers," or companies that sell contract spirits under their own name, obscuring facts about origin. It's a thorny issue within the craft industry, although consumers seem unperturbed by the practice. SCOPE OF THE ISSUE It's diffi cult to pinpoint the size of the industry. But according to the Craft Spirits Data Project (led by the ASCA, Interna- tional Wine and Spirits Research, and Park Street), craft spirits represent about 3.8 million of the nearly 211 million cases of spirits sold annually in the U.S., with the average craft distiller selling about 3,200 cases per year. The study follows ACSA guidelines, including only distillers whose volume is below 400,000 9-liter cases, independently owned and operated, with no more than 25% capital and operating control coming from a non-craft producer, now estimated at 1,400-plus businesses. Goldman Sachs predicted that consumer trends like authentic- ity, quality and premiumization mean craft spirits could more than double volume to 11 percent by 2020. For the most part, whiskey has been the major driver of in- terest in craft spirits - whether bourbon, single malts or new recipe whiskeys. Citrusy, low juniper gins are also gaining trac- tion, and recently more amaros, vermouths and cordials seem to be fi nding a market. In any case, defi ning what is and isn't craft has been tricky. "Being a new industry within an indus- try, our board spent lots of time discussing this issue of craft," says Margie A. S. Lehr- man, executive director of the ACSA. "And the board decided if we're asking the consumer to defi ne craft, it's only fair to make sure the consumer has the transparency from us needed to do so." "The interesting thing is I don't see a lot of fi ghting about this from producers," Hletko says. "The disagreement comes in because people are trying to force the defi nition. Distributors and retailers are happy with the title, but I think it's a challenge to defi ne craft because that's what's being used to defi ne us." In addition to generous volume limits and ownership re- strictions (the ACSA wants to avoid the gyrations the craft brewers have gone through to keep booming businesses under their craft umbrella), the organization established an ethics code - and some former members have been shown the door, Lehrman says. "Our ethics committee regularly looks at questions raised about members' labels. They can lose their membership if they don't revise the label, their marketing or what's in the product after a determination by the ethics committee." VOLUME OR QUALITY? The growth of craft spirits is often compared to craft beer, but Hletko points out a major distinction. The gap in fl a- vor, style and even quality between mass market beers and what has been popularized by craft brewers was fairly clear from the start. With spirits, though, it's reasonable to pose the question: Is a whiskey produced the same way for 100 years considered craft, as opposed to some neutral grain spirit bought from a large distillery, then redistilled or bottled by an entre- preneur? "It's important to make distinctions, and the burden is on industry to be truthful and accurate and leave it to the consumer," he says. Nowhere in the ACSA bylaws does the group attempt to defi ne a craft spirit beyond the volume, ownership and trans- parency limitations, and the relevant federal agencies have provided little guidance. Quality, always subjective, is rarely addressed. Although Dave Pickerell, a consulting distiller for brands such as Whistle Pig and Hillrock, is happy to oblige. "I'm a pariah in the craft industry in some ways because from the beginning when some distillers started using the term 'craft,' I fought them tooth and nail and asked them to consider calling themselves small and independent rather than craft. 'Craft' implies a certain level of artistry and mastery and there are certainly large-scale spirits that are well made and small scale spirits that are not. Trying to defi ne the term craft is diffi - cult, and sooner or later the little guys are going to pick a fi ght with the big guys over 'craft' and they're going to lose." Rather than the craft designation, he prefers the people he works with aim higher and develop a product that can compete without any qualifying moniker, to prevent being attached to trends. "At the end of the day it's the buying power of the Mil- lennials that's moving this along - they will pay good money be- WHAT MAKES A

Articles in this issue

Links on this page

Archives of this issue

view archives of Stateways - StateWays - March/April 2017