A craft whiskey distillery based in Portland, Oregon, recently received the largest purchase order in its 14-year history—not from someone in its local or regional market but from the other side of the world, in Australia. It came about, says Tom Mooney, the distillery’s founder and CEO, because of a trip to Sydney that was organized by the Distilled Spirits Council, the trade association responsible for advocating, lobbying, and policymaking on behalf of the entire U.S. spirits industry.
Mooney’s distillery is Westward; it was formerly known as House Spirits, and it joined the Distill Ventures accelerator portfolio following a minority investment by Diageo earlier this year. Mooney himself is also a founding member and former board president of the American Craft Spirits Association (ACSA) and a regional chair on the Distilled Spirits Council’s advisory body. He understands that the expense of joining a trade association can seem daunting for a small craft distiller, but he suggests that it be thought of as an investment.
“By being involved in these organizations,” Mooney says, “you literally get the money back.” When the organization succeeds at its work, members are able to take advantage of new programs and any new laws that result from the organization’s lobbying or policy work. Mooney concedes that if a distillery is in its first few years of production, with only, say, $100,000 in revenue, “it’s a struggle to write a check unless you’re getting some immediate benefit.” But, he says, “at the same time, as one’s [business] grows, the benefit of legislative wins like a lower excise tax rate is not just a nice-to-have but a make-it-or break-it component [that can help] turn the business into a sustainable enterprise.”
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But when membership can add up to hundreds or even thousands of dollars each year, how do you know which organization can most benefit your craft distillery?
Understanding the Different Organizations
There are three national organizations that support craft distilleries: the ACSA, the Distilled Spirits Council, and the American Distilling Institute (ADI). Individual states have their own local guilds as well. The missions of these organizations, while distinct, can often overlap.
Both the ACSA and the Distilled Spirits Council, for example, see federal policymaking as a top priority. The ADI—which, like the ACSA, is aimed specifically at craft distillers—is focused on education and support for distillers at every level of their career. And whether you need advice on running a distillery safely, navigating the Alcohol and Tobacco Tax Bureau (TTB) to set up a business, or staying informed on how the industry is evolving, all these associations have resources to help.
The relationship between these organizations and their members is symbiotic, distillers say. The success of the organizations relies on the strength of their membership. The dues help employ staff and fund resources to effectively lobby Congress, sponsor networking conferences, and create educational materials to help distillers develop their businesses. So the more these organizations succeed, the more their members can too.
Many veteran distillers say that a craft distillery should start by joining a state guild. “It’s a crime not to be a member of your state guild, because so much legislation happens at the state level,” says Mooney, whose business partner at Westward is the president of the Oregon Distillery Guild. “There are very meaningful priorities that state guilds have that only state guilds can [address].”
Jay Erisman, the vice president for strategic development at New Riff Distilling in Newport, Kentucky, has been impressed by the work of the Kentucky Distillers’ Association. “[KDA] is crushing it on the legislative front … [with] victory after victory in the state house,” he says. Kentucky, which he notes once had 80 dry counties and is home to many conservative religious leaders, is now more welcoming to alcohol production after the KDA was able to recast the conversation from one of “‘We want more booze’ to one about tourism”—which, he says, benefits both [distillers’] businesses and the state.
Not all states are as organized as Kentucky, whose rich history of distilled spirits dates to 1880, but Erisman says that shouldn’t stop craft distillers from getting involved in local politics. Strategies on how to do that are where larger organizations like the ACSA and the ADI are crucial. These national organizations can help distillers form their own local guild, for example, or effectively lobby their local and state legislators. Simply getting to know your local fire marshal, Erisman says, can help when you’re trying to get building permits and licensing for a new venture.
Talking to Politicians About Booze Legislation
How craft distillers are tackling federal excise tax reform by talking to their congressmen and lobbying for change
Rhonda Kallman, the founder and CEO of Boston Harbor Distillery, offers a different perspective. She feels that the way the craft distilling trade associations are split up is complicated. “It’s such a dynamic business right now,” she says. “I feel like we should be unified rather than divided.”
Kallman, who had a long history in the craft beer industry as a cofounder of Boston Beer Company (perhaps better known as the producer of Samuel Adams) before incorporating her distillery in 2012, says craft distillers might have better success if there were just a single association—as is the case with craft beer. “The Brewers Association,” she says, “has done a remarkable job of bringing people together. And they’ve defined what craft is … and [they] keep evolving it.” She also thinks that as craft distilling grows, the rules will have to change to some extent. “Defining that and protecting our core values [as craft distillers] is very important, and we should take a page out of what’s going on in craft beer.”
Advocating for the Community
The ACSA, which is only six years old, operates with a board of directors elected by its membership and focuses on craft distilleries. While there is no formal definition of the word craft across the industry, the association defines a craft distillery as a distiller that produces under 75,000 proof gallons per year, is independently owned and operated, and values transparency regarding its ingredients and its distilling process. The organization also collects and reports on economic industry data.
Margie A.S. Lehrman, the ACSA’s executive director, says the organization’s mission is “to elevate and advocate for the community of craft spirit distillers.” She adds that “it’s not only for the craft distillery itself—not only the owners, operators, managers, or the people sweeping the floors—but it’s looking at the greater community, like those planting the grain, designing the enclosures, or creating wonderful glass bottles.”
It’s this connection to the larger community, and the networking among the community, that’s another benefit of joining a trade association. “Although it’s an incredibly competitive environment,” says Lehrman, “it’s also one of the most collegial groups of people I’ve ever seen. The [members] actually pick up the phone and call one another.”
That need for community and support, along with continuing education and certifications—especially within such a nascent industry—is what encouraged Bill Owens to launch the American Distilling Institute 15 years ago. “The driving force of ADI is to share the knowledge,” says Owens. “We’re the voice of the industry.”
The ADI has published 30 books on the industry; it also publishes a magazine and sends out a weekly email newsletter. Additionally, it organizes classes and conferences. Its online forum, which anyone (not just members) can participate in, has become a valued community resource for beginners and skilled distillers alike. ADI’s largest project, says Owens, is its annual directory, which lists every craft distiller in the U.S.—along with vendors who are crucial to the industry, such as those that provide barrels, bottles and glassware, labels, and other materials.
Distillers say that ADI’s conferences create invaluable business opportunities. “What [Owens] has done is rallied enthusiasts and brought together in one place those who have an interest in making a business a go,” says Kallman. “This is where they start.” In fact, she says, “I met my master distiller at ADI.”
New Riff’s Erisman says the conferences hosted by both ADI and ACSA have helped him grow in the industry. “Particularly helpful,” he says, “were contacts that we made that helped us learn how to interface with distributors, contractually speaking.”
Having a Voice in the Larger Community
In 2010 the Distilled Spirits Council recognized the industry growth of small craft distillers and created a Craft Distiller Affiliate Membership program. Currently led by an advisory council of 12 craft distillers, its goal is to help communicate public policy issues. Today, 150 craft distilleries have become affiliate members.
“For small distillers,” says Frank Coleman, the senior vice president of public affairs for the organization, “a Distilled Spirits Council membership provides a collective voice, a wealth of expertise, and access to government regulators and elected officials, to successfully grow their business and the entire sector.”
Some of the benefits of membership include access to legal and regulatory experts, participation in international trade promotion programs, opportunities to showcase products at events sponsored by the Distilled Spirits Council, and access to e-newsletters on taxes and regulations.
For Westward’s Mooney, being an active member of both the ACSA and the Distilled Spirits Council has been key to his success. “ACSA is in my heart, but there are very powerful business reasons for us to be involved with the Distilled Spirits Council,” he says, emphasizing the need to keep perspective on the bigger picture. “Our industry exists as a whole. I think if you’re a small distillery, it’s important to understand the [playing field] and the large [companies]—we don’t exist in isolation from the bigger industry.”
Dispatch
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Alicia Cypress is following her passion for wine after spending more than 20 years as a journalist at National Public Radio and the Washington Post. She’s currently a managing editor at Reviewed.com, a part of the USA Today Network, and she writes a wine blog, itswinebyme.com. She’s received the WSET 2 certification (with distinction) and hopes to continue her studies. Talk about wine with her on Twitter or Instagram.
