GETHSEMANE, Ky. – As pandemic lockdowns closed businesses around the nation last year, craft distilleries braced for the worst. Their business, after all, was built on the intimacy of sampling spirits in person.
Yet despite financial pain that put several distilleries out of business, the industry expanded in 2020, thanks to a combination of federal aid, consumer demand, changes in state regulations and a reduction in federal liquor taxes.
The number of craft distilleries climbed to 2,265 last year, a nearly 11% increase, according to a report from the American Craft Spirits Association, a trade group. Annual national sales reached $6.1 billion in 2019 and are expected to have increased in 2020.
As the sector grows, craft distilleries are becoming more creative, expanding their business model by adding entertainment, recreation and lodging in an effort to offer a broader experience for visitors.
“If I’ve been waiting for anything, it’s a family-friendly destination where I can also enjoy bourbon,” Gov. Andy Beshear of Kentucky told a small gathering last month at the opening of the tasting room of the Log Still Distillery, the state’s newest craft distillery.