The number of active US ‘craft’ distillers has declined while sales of US craft spirits also shrunk in value and volume terms for the third consecutive year.

As of August, the US had 2,131 active ‘craft’ distilleries, a 6.6% decline compared to the same month last year, findings from the American Craft Spirits Association show (ACSA).

According to the report released jointly by the ACSA and Park Street, sales volumes of 'craft' spirits fell 8% year-on-year to 11.7 million nine-litre in 2025.

Sales value meanwhile dropped 3.7% year-over-year to $7.3bn.

This marked the third time in a row that sales value and volume of craft spirits has decreased since the ACSA began their Craft Spirits Data Project report in 2016.

The downturn reduced ‘craft’ spirits' share of total US spirits to 4.2% in volume share and 7.3% in share of value, according to the report, which compiled its findings using multiple sources including its own research and data from the US Alcohol and Tobacco Tax and Trade Bureau.

The ACSA defines US craft spirits as "licensed producers that have not more than 750,000 proof gallons (or 394,317 nine-litre cases) removed from bond".

They also must position themselves as "craft" and " market themselves as craft, "are not openly controlled by a large supplier, and have no proven violation of the ACSA Code of Ethics".

The sector also saw significant workforce cuts last year, with "full-time domestic employment" declining 25.6% to 21,285 positions, according to the report.

International demand for craft spirits was also down. Exports dropped 13.4% to 123,000 nine-litre cases in 2025.

“Exporting has become drastically harder for craft distillers, and the trade disputes of the past year made it harder still,” the ACSA said in a release.

Out-of-state sales accounted for 51% of craft transactions in 2025. The figure was 54% in 2020.

On-site distillery sales became more important for distillers in the year, rising from 14% of total sales in 2015 to now making up 26% in 2025. This the ACSA said meant "more than one in four craft bottles o the consumer who walked through the door".

"The shift reflects a market that has become harder for small producers to reach," it added.

Sustained market pressures also led producers to cut back significantly on business investment for the second year in a row. Average investment per producer declined to $239,800 in 2025, from $288,900 in 2024.

Total sector investment dropped to $526m, down from $811m a year earlier.