Business Overview

Most people in this business sell the liquor created from their distillery through various vendors. Additionally, some people sell their liquor directly to customers via an attached store or restaurant. Certain distilleries also offer features such as tours or tastings in order to build community engagement and brand awareness.

Who is this business right for?

Obviously, this business is great for those who love alcohol. It is also good for those who are patient, as the process of making liquor can be lengthy. It is also good for those who like to work alone or in small groups, as most small distilleries start with the owner as one of the handful of workers.

What happens during a typical day at a distillery?

There are many daily activities at a distillery. Some time may be spent planning, designing, and testing new spirits that will be sold. A fair amount of time is spent actually distilling spirits (from malting and fermentation all the way to bottling). Time will also be spent researching the liquor industry, researching liquor history, and researching what your competition is doing. Finally, a good amount of time may be spent promoting your products, and in most states, having conversations with the retailers who will sell your liquor.

What is the target market?

Because of the three-tier system (which will be explained later), your most direct customers are actually the liquor distributors who will then distribute to retailers. Your best distributor is usually a small- or mid-range distributor because they are likely to specialize in (or simply take a chance on) liquor created by a smaller distillery.

How does a distillery make money?

On the most basic level, a distillery makes money from the sale of liquors the distiller has created. This process is a little abstract in most states, though, as they follow a three-tier system. In this system, the distiller is the producer who sells their products to distributors who then sell to retailers.

What is the growth potential for a distillery?

The growth potential for this business is very steady. The Bureau of Labor Statistics shows employment among breweries, wineries, and distilleries increasing from a little over 132,000 in May of 2016 to nearly 146,000 in May of 2017.