Consumer Savvy Drives
Growth of Craft Spirits
Over the past couple of months, we asked subscribers of ACSA’s Monthly Mash for their thoughts on the driving force behind craft spirits’ rise. Overwhelmingly—and predictably—the answer was “a more savvy consumer base.” That is the most important distinguishing factor between a “fad” and a “trend.” Fads are manufactured and short-lived, mainly because they’re foisted on to the public. Trends are consumer-driven and emerge organically and, because of that, their staying-power is long-term and their growth builds on itself.

Respondents offered some further insights, expanding on their responses.
“There are few on the craft side with the resources to match the aggressive marketing that the macro companies engage in, so the responsibility will often fall to the consumers to seek out those spirits that are novel or worthwhile," says Colton Weinstein, head distiller at Corsair Distillery in Nashville.

These days, consumers rarely have to be educated on what a craft beverage is, says Lisa Wicker, president and head distiller at Widow Jane in Brooklyn, New York.

“The craft industry, in all it’s incarnations, is familiar with everyone, easy to translate into craft spirits,” says Wicker. “Just in the last week, the Whiskey Advocate top 20 for 2018 included several craft spirits. The quality of craft spirits increasingly has become solid and dependable, the customer savvy about knowing what to ask.”

There, of course, still is a lot of room for growth.

“I asked a coworker doing regular store and tasting room work,” Wicker adds, “and she still fields the question: ‘how does this compare to, insert mainstream brand.’” 

Ron Gomes at Painted Stave Distilling in Smyrna, Delaware says his distillery increasingly is serving consumers who are interested in knowing “where, how and who makes the products they enjoy. Being more knowledgeable, the consumer is more engaged, connected to and supportive of our small business.”

Kent Rabish, president of Grand Traverse Distillery (Traverse City, Michigan), agrees, noting that consumers especially care where and how their spirits are made. “The growth of true craft distilling is to offer spirits distilled from locally sourced agriculture and do it all under one roof,” Rabish says. “Merchant distillers need not apply.” 
Meanwhile, On Capitol Hill...
The election on November 6, 2018 ushered in significant changes that will certainly impact the Federal Excise Tax (FET) debate in the next Congress.
As has been reported, the Democrats picked up 40 House seats. They needed only 23 to gain a majority, so they will have a comfortable working majority in the House. The GOP picked up a net two Senate seats, so the new balance of power in the Senate will be 53 to 47 in favor of Republicans.  
As for the House, one of those defeated on the GOP side was Rep. Erik Paulsen (R-MN) who was the lead sponsor of H.R. 747, the House bill that would permanently lower our FET from $13.50 to $2.70 for those producing less than 100,000 proof gallons. Rep. Paulsen was from a suburban Minneapolis district and like many Republicans in those swing districts he was not re-elected. Ironically, his opponent, Dean Phillips, has had family in the distilling business. Rep. Kevin Brady (R-TX) will remain on the Ways and Means Committee, but he will not be the Chairman. He will have the title of Ranking Member.
Because the 115 th  Congress will conclude on January 2, 2019, all legislation must be re-introduced in the 116 th  Congress. ACSA and the other beer, wine and spirits groups will be working on new legislation in 2019.
With the House changing hands, there will be new Chairmen of key Committees. The House Ways and Means Committee, which handles all tax bills, will have a new Chairman, Richard Neal of Massachusetts. Rep. Neal was a supporter and co-sponsor of HR. 747. Rep. Neal has served in the Congress for nearly three decades and is a well-liked and respected member. We expect that he will be friendly to our legislation. Rep. Ron Kind of Wisconsin was the lead Democrat on H.R. 747 in the last two Congresses. We expect that he will play an active role in 2019 and possibly lead the effort in the next Congress. As a reminder, we had over 300 co-sponsors in the House last Congress and we will want to repeat that success. 
In the Senate, with the retirement of Senator Orin Hatch (R-UT), Senator Chuck Grassley of Iowa will take over as Chairman of the Senate Finance Committee. Senator Wyden of Oregon will continue as the top Democrat on Senate Finance. Senator Roy Blunt (R-MO) remains in the Senate and moves up in the GOP leadership ladder. 

We are working with Senators Wyden and Blunt to re-introduce Senate legislation in 2019 that would make our FET reduction permanent.
Looking ahead to 2019, our industry will again have to kick into high gear and engage in significant grass roots to get the Senate and House to support an extension of the lower FET. While we feel good about our prospects, 2019 will be a year of working hard to ensure our success.
Top Spirits Trends to Watch
in the New Year
By Jeff Cioletti

With 2018 winding down, it’s time to look into the old crystal ball—well, maybe it’s more of a crystal decanter—and see what we might expect to happen in the world of spirits in 2019, in no particular order.

1.      Instagrammability: As annoying a concept as it is, it’s the sign of the times and not going anywhere. Packaging and cocktails are being crafted for their photogenic appeal on social networks and a product’s Instagrammability is likely to be an even bigger priority in 2019.

2.      Coffee Liqueurs: The espresso martini has become one of the most popular cocktails and it’s creating opportunities for craft producers of coffee liqueurs. Expect to see more collaborations between distilleries and local roasters and a greater focus on ethically sourced beans.

3.      Umami Botanicals: Umami’s become a buzz term in the culinary world and it’s now becoming a larger part of the conversation with regard to gin botanicals. Gin distillers will push the boundaries further with botanicals like sea kelp, shiitake mushrooms, sun-dried tomatoes and other off-beat ingredients.

4.      Neat consumption: Cocktails are still king, but there’s a growing movement to promote the enjoyment of spirits—beyond the obvious whiskeys and brandies—neat and on-the-rocks. Consumers may discover a new spirit in cocktails, but once they do, they’re more keen to explore it in its most unencumbered state.

5.      Genever-style spirits: Dutch genever’s become a favorite of bartenders everywhere—so much so that American distillers increasingly dabbling in the category with their own riffs on the traditional grain-forward botanical spirit.

6.      Aquavit: It’s not just the Netherlands tradition that’s having its moment. Adventurous consumers have an eye on Scandinavia, as well, and have been falling in love with the caraway- and dill-flavored spirit of the Nordic countries. And aquavit offerings from American distillers are already rivaling venerable brands in Sweden, Norway and Denmark.

7.      Cannabis: Weed seems to be here to stay and more distillers will be experimenting with cannabis as a spirit ingredient, just as bartenders have been mixing up a storm (where legal) with the herb. 
Spotlight on a Member of the ACSA Family:
Being Iconic in a Saturated Market

By Erin S. Dutton
President, Big Sky Packaging
Any brand’s challenge, aside from creating great product, is to develop packaging that effectively communicates your brand’s message and ultimately draws consumer interest at the retail level—all while maintaining a COG supported by your retail price positioning. Sounds simple, complex, a bit optimistic, right? With proper brand vision, component engineering, manufacturing processes, material selection and production management it’s an achievable concept for most any brand.
Personalize your brand and create custom components for new product releases, limited editions, events, co-branding or marketing opportunities. All while using the core components and tooling. By engineering the tooling with interchangeable components in mind, you can now add customized elements, in a variety of material options. Add top coins, plaques, logos, or other ornamental aspects to the packaging that are unique to the opportunity, and ultimately separate your brand the competition. (see photos)
Secondary packaging (Unit Boxes) and Holiday Set Boxes engineered and developed by Big Sky Packaging are examples of how to continuously develop your brand and establish shelf presence. With affordable set-up costs, low order minimums and quick turn-around, you can enhance marketing potential and clearly communicate your brand identity and message. With current production in the U.S.A, Europe and Asia, manufacturing components that exceed expectations in pricing, quality and speed-to-market is Big Sky's specialty.

The initial package design and engineering are critical to maximizing the possibilities. They can truly give your brand the flexibility needed in a continuously evolving landscape.

Move beyond traditional. Be iconic.  
Save the Date:
Upcoming Events

February 10, 11 & 12, 2019: Minneapolis, Minnesota
Attendee and exhibitor registration is now open for "Craft on Ice," ACSA's 6th Annual Distillers Convention & Vendor Trade Show at the Hyatt Regency Minneapolis. Join fellow producers and other industry experts for the largest gathering of licensed craft spirits producers in the U.S. The room block expires on January 15, so book your room now to take advantage of the discount room rate. View the conference education schedule here.

Exhibitor Registration -- TOO LATE! The floor is full and now closed BUT call us for sponsorship opportunities to get your brand in front of our crowd.

We also will be hosting two Master Classes just prior to the official start of the Minneapolis convention. Each will require a separate ticket to attend. Both will be held Saturday and Sunday, February 9 and 10 , 8 a.m.-5 p.m.

•  Essentials to Successfully Implementing an Occupational Safety Program in Your Distillery, Presented by  Industrial Safety and Training Services
Join ISTS, the presenters of our “Distillery Safety Management 101” class to learn safety best practices for your DSP—from production to warehousing. ISTS has tailored a program to cover the safety concerns specific to distilleries. What can you expect to learn? OSHA reporting and expectations, common errors in distilleries, how to implement safety culture in a distillery and much, much more!

Sensory Master Class Presented by  Lallemand Biofuels and Distilled Spirits
For over 35 years, Lallemand has been educating fuel ethanol and distilled beverage producers in the multidisciplinary sciences of alcohol production. The course is designed to provide our delegates with detailed information on beverage alcohol unit processes. The program is designed for lab, plan and management personnel and are organized around lectures, laboratory demonstrations, seminars and lab visits. The course is also appropriate for suppliers and government personnel to provide understanding and training. This important resource is becoming more valuable every year as the market growth is making the need for continual education a must.

A new feature at this year's ACSA Convention and Vendor Trade Show is Hockey On Ice, where attendees can face off against one another in the most popular winter sport. The game, scheduled for Sunday, February 9 at 8 p.m., will be coed and everyone is welcome to play. Players are required to bring their own gear including skates, shins, breezers and helmets.

A Very Special Thank You to Our Sponsors!
American Craft Spirits Association