What's the Issue?
Prohibition ended nearly a century ago, yet there are still laws today that severely restrict a consumer’s ability to purchase distilled spirits (whiskey, rum, gin, etc.) and a distiller’s ability to sell their products.
While 47 states allow the direct shipment of wine straight from winemakers to consumers, only 11 states currently allow distillers to ship their products directly to consumers.
Spirits “direct-to-consumer” (DTC) shipping is defined as shipments using a common carrier from a distillery or importer directly to an adult consumer aged 21 years or older.
Allowing distillers to ship directly to consumers would increase consumer convenience and provide support to spirits producers in the U.S. and abroad.
In the last 15 years, growing consumer interest in diverse spirits products has led to the increase in the number of distilleries in the U.S. from just 70 to more than 2,000. There are now more than 15,000 distilled spirits products in the marketplace. A modern spirits marketplace will allow residents of any state to buy the products they want, in the way they want, while allowing smart regulation to ensure responsible delivery.
Why is direct-to-consumer Shipping needed?
Simply put, consumers expect and want direct-to-consumer shipping of distilled spirits. It’s time for the marketplace to meet what consumers are seeking.
In fact, 80 percent of consumers believe distillers should be allowed to direct ship spirits (Source: IWSR).
The increased demand for consumer convenience and choice, additional support for distillers, and responsibility measures already in place to prevent illegal purchases all highlight the need for states to adopt measures allowing direct-to-consumer shipping.
Who benefits from direct shipments of distilled spirits?
Consumers
Consumers want the ability to choose limited-release products, specialty products not widely distributed nationwide and club offerings, or to ship products home from a distillery visit.
Distillers
DTC shipping provides additional market access channels for distillers to connect with new and returning consumers where they are. During the COVID-19 pandemic, DTC shipping provided a critical lifeline for many struggling distilleries who were suddenly cut off from their customers and will continue to be an avenue for customer interaction and growth where permitted.
Industry
Expanding distillers’ ability to direct ship will introduce consumers to new products that will eventually grow into brands carried by traditional wholesalers, thus strengthening the overall spirits industry and the three-tier system (i.e. producers ⟶ wholesalers ⟶ retailers). In fact, from 2005 to 2020, wholesale jobs have grown by more than 50 percent (from 56,459 to 85,887). Liquor store jobs grew by 17 percent during the same time frame. DTC shipping serves as an onramp for small distillers by allowing tasting experiences and organic brand building – creating a cost-effective way to generate the kind of product attention that is critical for partnering with wholesale distributors.
What are the safety measures?
Wine producers have responsibly shipped wine direct-to-consumers for decades. There are well established and appropriate responsibility measures in place that prevent minors from illegally accessing beverage alcohol. Just as IDs are required for any alcohol purchase, ID checks are required in order for the recipient to accept an alcohol delivery. Additionally, an adult signature is required.
What is the Solution?
It’s time for consumers to be granted the same market access to distilled spirits that they have enjoyed with wine for decades.
DTC legislation for spirits should:
- Treat all distillers equally
- Treat all types of beverage alcohol products equally
- Maintain state tax collections
- Safeguard against underage purchases and ensure product integrity
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