The Covid-19 shutdown has driven people to buy mass-produced spirits instead of good spirits. The good guys are losing:
The coronavirus recession has left no industry unaffected, but the one-two punch of shuttered bars and mass unemployment has hit craft distilling particularly hard. In a survey of its members by the American Craft Spirits Association, more than two-thirds say they may have to close permanently in the next few months.
The crisis isn’t just threatening to decimate the industry; it is also reshaping its future. How can a sector that relies so heavily on bars, tasting rooms and face-to-face sales — not to mention customers willing to pay a premium for its products — move forward in an economy defined by social distancing and thinner wallets?
“There’s going to be a lot of dead distilleries coming out of this,” said Paul Hletko, the founder and distiller of FEW Spirits, in Evanston, Ill. “Even if you survive, the new normal is going to be punishing for small brands.”
“Starting a distillery is really hard. It takes a lot of capital up front — you’re in the hole for a long time,” said Maggie Campbell, the president of Privateer, an eight-year-old rum distillery in Ipswich, Mass. “If we were three years old, this would be a very scary time.”
This blossoming industry was therefore uniquely vulnerable to the ravages of the coronavirus crisis. To make things worse, the market for craft spirits is centered in large cities and among millennial and younger consumers — all of which have been especially hurt by the sudden economic downturn.
“We were poised for this awesome surge,” said Nicholas Jessett, a founder of MKT Distillery in Katy, Texas. “And now we can’t go anywhere. We’re stuck.” His distillery sold most of its products through its tasting room, and Mr. Jessett was in negotiations with a distributor to get MKT’s whiskey and gin into nearby Houston and other parts of Texas. But after the state shut down nonessential businesses, the distributor pulled out.
I have at least two open bottles of FEW spirits in my house at any point, and I'm also trying to pick up other local products, like CH and 28 Mile, when I can. But this could easily turn into the dystopian 1990s when the only spirits for sale came from giant companies and had no character.