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Demand for direct-to-consumer spirits shipping ‘overwhelming’

Three major spirits trade groups have called on the US government to pass direct-to-consumer (DTC) shipping laws, citing massive demand from consumers.

American whiskey WSR
US trade groups are campaigning for DTC shipping laws across the country

The Distilled Spirits Council of the United States (Discus), American Craft Spirits Association (ACSA) and American Distilling Institute (ADI) have agreed a strategic partnership to campaign for direct-to-consumer shipping legislation.

Currently, 46 states and Washington, DC, permit the direct shipment of wine, but just nine states plus DC allow the direct shipping of distilled spirits – though seven more states temporarily allowed distillers to ship directly to consumers due to the Covid-19 pandemic.

These short-term measures recently ended in Montana and New York, and some states, including California, have introduced bills to permanently allow DTC shipping.

“In states where craft distillers have been permitted to ship their spirits products direct-to-consumer, they report it has been a saving grace and a much-needed source of revenue during the hardships of the pandemic,” said Erik Owens, ADI president.

Christine LoCascio, Discus chief of public policy, added: “We fully support the three-tier system and view direct-to-consumer shipping as an enhancement to the evolving and modern marketplace.”

DTC demand by numbers

To support the campaign, Discus released the results of a survey of more than 2,000 consumers regarding their sentiments towards DTC shipping, conducted by IWSR Drinks Market Analysis in March 2021.

“The goal of this survey was to get a better understanding of the buying behaviour of spirits consumers and determine if current state laws restricting direct shipping of spirits are hampering distillers’ ability to meet the needs and expectations of their customers,” said David Ozgo, Discus chief economist.

According to the research, 80% of consumers think distillers should be allowed to directly ship their products to customers of legal drinking age in any state.

Seventy-six percent would consider buying spirits online through DTC channels, and 75% believe that wine and spirits should adhere to the same DTC laws.

The study also highlighted that DTC is gaining traction in the states in which it is permitted. Nearly half (45%) of those surveyed had bought alcohol online directly from a brewery, winery or distillery, and 38% had purchased alcohol online from a producer in a different state.

“We seek to enhance and build member businesses by meeting customers’ desires for similar shopping experiences for beer, wine and spirits,” said Margie AS Lehrman, CEO of ACSA. “These survey results clearly illustrate the importance of this effort, and the need to work collaboratively to help move legislation forward to create these very opportunities.”

During the Covid-19 pandemic, e-commerce continued to gain traction, and the Discus survey pointed to the extent of this growth.

Seventy-three percent of respondents said they shopped online for groceries; 47% noted they are now shopping online more frequently than in the past year; and 62% have purchased beverage alcohol online, whether through DTC or other e-commerce platforms.

ADI’s Owens commented: “Let’s face it. The pandemic has completely changed the way consumers shop, and there is no going back. It’s time to do away with antiquated DTC shipping bans so distillers can meet consumer expectations and compete in the rapidly changing marketplace.”

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