A distillery is a place where alcohol is made through distillation. Craft distilleries offer a wide range of flavors and styles. From the smoky notes of some bourbons to the botanical complexities of a craft gin, each spirit tells a story and reflects the expertise of the distiller. These small-batch productions allow for experimentation.
Washington State Craft Distillery License
In 2008, the State of Washington began promoting new opportunities for craft distillers. A license allows you to produce 60,000 gallons or less per year when half the raw materials are from Washington.
- Offer free tastings on site, limited to 2 oz per person daily.
- Sales for off-site consumption are allowed, limited to 2 liters per customer per day.
American Craft Spirits Association Definition
The American Craft Spirits Association defines a craft distillery as follows:
- A distillery that produces fewer than 750,000 gallons annually.
- A distillery that directly or indirectly holds an ownership interest of 51% or more of the DSP.
However, the definition of "craft distillery" is actually not very well defined at all.
Without a clear definition, the craft distiller becomes subject to whimsical, arbitrary, and occasionally malicious legislative decisions regarding permits, taxation, and regulation.
Successful Business Models and Factors Affecting Profitability
Having a brewery and a distillery under the same roof may be a lucrative business model moving forward. Small operations that are transparent about processes and ingredients used are the principles of craft.
Factors that can affect profitability include:
- Cost of production
- Target price points
- Cost of distribution
- Overhead
- The cost of acquiring, packaging, and labeling spirits
They lean into that and a lot of their branding comes back to the Oregon Trail and the history of Oregon. A company in Scotland are fourth generation potato farmers who know how to process potatoes, so they’ve got essentially free raw materials.