New York State Continues to ‘Belly Up to The Bar’ in Favor of The Craft Farm Distilling Industry | Latest Legislation Brings Even More Revenue Opportunities To Sustain While Aging

This weekend, as we approach the third year anniversary of the passing of a law that has allowed Murray’s Fools Distilling Co. and many others to seize an amazing opportunity in New York State, I thought it appropriate to blog about just how far New York has ‘bellied up to the bar’ to open up sales potential through legislation. These opportunities enable small batch distillers, like Murray’s Fools Distilling Co., to not only build our business but sustain it and keep it revenue producing as our product matures by conducting tastings and making direct sales at farmers’ markets and state and county fairs.

In an industry that, less than a century ago, was severely restricted by government there is great promise and new potential. With fewer regulations, New York, with fifty-one (51) New York State licensed craft farm distilleries currently listed as  producing whiskey, or have plans to produce whiskey in the near future, is proving to be one of the best states in the country to be a craft distiller. (list count as of 9/28/2015 (http://recenteats.blogspot.com/p/the-complete-list-of-american-whiskey.html#NY)

New York State recognized early on that the increase in small-batch farm distilleries (and breweries, cidereries and wineries) creates jobs, fosters tourism and injects money into the state’s agricultural economy!

To give you some numbers to think about, the increase in New York State farm distilleries that have been added during Governor Cuomo’s Administration has been 370% (up to April 2014)!

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Graphic extracted from April 8, 2014 'First Beverage Summit' New York

The very first small batch distillery to open in NYS since prohibition is been said to have officially opened in 2003, and things have sure have changed for the better for those guys as things have progressed! I’ve pulled together a timeline of legislative events to outline the progress NYS has made in this industry over the short period of twelve (12) years.

New York State Law Craft Distilling Permit | 2002

• the establishment must be independently owned
• the spirit must have been run through a still by a certified craft producer
• must produce no more than 100,000 gallons per year

Immediately after 2002, work began on re-defining the law to open up more opportunities for this new sector.

Farm Distillery Act | 2007

• allows distilleries to produce, sell and provide samples on premise of liquor made from New York State food and farm products (needed to find a licensed wholesaler or retailer to sell off premise)
• allowed for tours and the operation of tasting rooms, allowing them to become ‘destinations’
• allowed to make up to 35,000 proof-gallons of liquor per year
• drastically reduced the licensing fee
• required to use 75% of NYS farm ingredients product

After the 2007 act was passed there was HUGE growth within the industry, which prompted the most important opportunity of all;  self-sales off premises.

New York’s Farm Distilling Law –2012/2013 (result of First Beverage Summit)

• could now offer tastings and sell products at Farmers’ Markets and State and County Fairs

By signing this Farm Distillery Bill, Governor Cuomo opened up a very integral part of a small craft distillers revenue, by providing more options for direct sale of farm distilled spirits. This helped start-up spirit makers stay in business long enough to properly age their spirits.

Since early 2011, New York’s farm distillers have grown to 61 from 10, according to the New York State Liquor Authority.

Craft New York Act –2014
Passed in June, and signed into law by Gov.  Andrew Cuomo in November, the legislation was - designed to ease regulations and promote growth for the state’s already emergent craft-beverage industry.

• allows tastings and sell for on and off-premise consumption
• can serve full-size pours of their farm product—not just the quarter-ounce samples previously allowed—without
• having to obtain a separate license. This opened the door to a wider world of cocktails, on-site cafes and private events
• allow each farm distiller to operate one ‘branch office’
• in addition to selling your own NYS products, a farm distillery has the ability to sell other NY beer, cider and wine from its location
• lowers the food requirement that must be met by manufacturers when offering tastings and consumption on premises
• reduces costs for small manufacturers by increasing the production cap to 75,000 and permitting the production of more product without increased fees
  

August 2015 Legislation

• allows the sale of gift items including food, craft products, liquor supplies and accessories and souvenirs.

All of this legislation is designed not only to create more craft spirit producing distilleries, but to also create a new tourism sector in New York!

The administration has been very supportive by modernizing the antiquated laws that made it difficult to do business in the past and helping with promotional opportunities. The changes have helped create new businesses in New York State that are adding jobs, tax revenue, tourism and benefits to local farms; hiring new employees, working with other local businesses.

NYS doesn’t stop there though, the state sees the craft beverage industry as yet another benefit to NYS, and therefore in further support provides grant money to not-for-profit organizations that will promote and market small craft distilleries through grants!  A  Craft Beverage Marketing and Promotion Grant Program, which was created to increase the profile, awareness and sales of New York State produced wine, beer, spirits, and hard cider, provides matching funds for the marketing and promotion of craft beverages. Also available is money for the State’s Craft Beverage Industry Tourism Promotion Grant, which grows tourism across New York State by promoting destinations, attractions, and special events explicitly related to the craft beverage industry.

Graphic extracted from Exane BNP Paribas July 2, 2015 Report 'Spirited Attack'

Currently craft distillers account for only around 2% of total US distilled spirits by volume but this metric has steadily increased on a monthly basis and is predicted to reach 8% in five years! This rise in craft distillery creation has mirrored the craft brewing movement and we now find ourselves at a very similar point as they were in the late 80’s/early 90s.

This means the BEST IS YET TO COME!