I had a great time attending last week's American Distilling Institute(ADI) Conference in Baltimore. The conference was easy to get to, well attended, and very well run by ADI. The Beverage Federation has recently been spending time with the craft brewing and hemp beverage industries, so the ADI conference was an opportunity to learn more about the distilling/spirits market right from the experts. We met great people who educated us on the similarities to craft brewing, the differences, and what is expected to happen in 2025 for the distilling industry.
#1 Co-Packing and Contract Distilling is a Few Steps Ahead of Craft Brewing Right Now.
Part of this realization came from the fact that we walked in the door with an incorrect perception of what was going on with the distilling industry. We had assumed that based on the trends there was a similar set of growth that the craft brewing industry saw in 2010 - 2019. Based on that and other trends (i.e. co-packing and contract distilling) the distilling industry was just getting started…This was not the case.
As we discussed with many ADI eventgoers, co-packing has been a part of the industry for a long time, even before it was formalized with ‘contracts’ and agreements. Having another organization produce, bottle, and label your product has been a part of distilling in some cases going back to its start. Even the source of the product has been a point of discussion in the industry, so much so that there was in many cases an understanding that your ‘brand’ may not be produced in your facility.
So when we say ‘ahead’ of craft beer, we mean that the discussions at the conference were more transparent about details like who was co-packing, who was providing it, and where benefits for both parties could be set up. There were even several booths at the ADI Conference occupied by well-known distilleries looking for co-packing/contracting opportunities. We had discussions around capacity and partnerships that were more ‘out in the open’ and with less of a stigma than the topic is sometimes discussed in the craft beer industry.
We think both industries are trending to more open conversations around what is the best go-to-market and use of equipment/resources, but we experienced several discussions that showcase the distilling community is trying to figure this out and is perhaps providing examples for the craft brewing community in the coming years.
What does the data say:
#2 More OPEN discussion around ‘what kind’ of beverage business you are building
Speaking of open & transparent, we also had several conversations with supply partners and distilleries that quickly went into what kind of beverage company they were building. We had not experienced this at previous craft beer conferences, (at least not until an owner had drunk a few too many beers).
But people would ask;
We’re not going to dive into the challenging discussion or ‘internal struggle’ most craft owners face when trying to build something from scratch and describe where they are going with it. Many small business owners, not just craft, struggle with what they want their company to be in 3,5,10 years - most people are just trying to make sure they are in business in 6 months.
We’re all trying to do something new and it was refreshing, if not a little strange, to hear people be very honest about what they were trying to do and not worry about being judged by the response or called a ‘sell-out’ by their peers.
#3 More People ‘Coming Over’ From Craft Brewing To Distilling Than Vice Versa.
It was not uncommon among many eventgoers we met in the distilling community to have them start off their background with ‘I used to be at a brewery, but then…’ I heard this background time and time again and for a variety of reasons they found themselves in distilling. We heard about this career transition significantly more than we heard about the opposite at craft brewery events. Rarely do we hear of someone coming from distilling transition to brewing.
#4 A ‘Brew-illery’ Is A Thing
Similar to #3, but we also met those who were not moving entirely over from brewing to distilling, but rather looking to add distilling to their brewery. Probably no better example of this potential trend than the presence of a booth at ADI that was for the Brewer Association. We stopped by and said hi to our friends who contribute to the great Craft Brewers Conference every year and talked about industry trends. Examples: Cold Lake Brewing & Distilling
#5 Despite More Growth in Distilling Right Now, Both Industries are Facing Similar Headwinds
Yes, distilling is going through a growth period, at least more so than craft brewing.
But, what many of the speakers and attendees at ADI were touching on were the similarities in challenges/opportunities that the two industries have in common. The discussion also led to how best to tackle these issues in 2025. Bump Williams, with Bump Williams Consulting, provided a great keynote where he touched on some of the similar headwinds:
Overall, it was a great conference and we look forward to engaging the distilling industry; distilleries, spirit producers, supply partners, and co-packers. If you would like to talk more about ADI or distilling - feel free to reach out and we’ll grab some time: dan@beveragefederation.com
Dan Klasen is the Founder and CEO of the Beverage Federation, a Group Purchasing Organization that creates volume contracts for its brewery and distillery members; the Federation leverages its expanded purchasing power to help members operate a leaner business in a growing complicated beverage environment. The Beverage Federation is the ‘Costco’ of the beverage industry, you become a member and you save money - period.