What's up with American Craft Distilling?

[Mash]

So some major players from ADI have started the above association. What happened? Distilleries that I really look up to are on the board of directors...... Is this competition for ADI or .....?

[pressure9pa]

Check out the comment sections from Chuck's blog. I am fearful of a weakening division.

http://chuckcowdery.blogspot.com/2013/04/new-group-american-craft-distillers.html

[TetonDistillery]

I read those comments in the Chuck Cowdery blog.

It appears that there is a difference of opinion as to what the main focus should be of any trade group that claims to represent craft distillers.

It appears that the new group wants to focus more on the actual issues of DSP operating craft distillers.

From the criticisms I read, there is some issue with ADI and Bill Owens not addressing the issues that many distilleries want to organize around.

There seems to be more of a legislative and activist focus for American Craft Distilling Association.

ADI seems a bit more focused on distilling classes, conventions, etc.

Someone correct me if my analysis is incorrect.

[Newbie in CA]

It seems that your analysis of the situation is correct there - ACDA looks to be focussed on legislation and ADI seems to be more about providing an industry forum.

As some of the commenters in that same blog stated though, there are growing divisions between different factions of craft distilleries and they are beginning to show. Particularly between distilleries that buy alcohol and those that make it themselves.

There are also big divisions between the different definitions of what a craft distillery even is, and how those definitions are used by the marketing world.

There will be a shakedown at some point and when it happens, I hope that the surviving distilleries have an appropriate association to represent them. It feels to me that in some ways, that is what this is about.

[Artisan Still Design]

the article linked to sounds very condemning of ADI, but as far as I can tell it appears that the two organizations are more parallel then competitors.

ACDA and ADI seem to have different mandates and could or should be able to operate in tandem, co-operaing where they overlap.

ADI does a fantastic job of educating and supporting potential distillery start ups, while ACDA seems more focused on lobbying for DSP's that are up and running. its hard for 1 organization to do both properly.

or perhaps I'm just an eternal optimist?

[TetonDistillery]

ADI does a fantastic job of educating and supporting potential distillery start ups, while ACDA seems more focused on lobbying for DSP's that are up and running. its hard for 1 organization to do both properly.

I sort of disagree. The membership dues of the craft distilling industry likely cannot support two different trade groups long term.

The organization that is more focused on the needs of it's members will most likely survive.

Also the ownership of ADI and ACDA appear to be quite different.

According to that blog, ADI is owned by Bill Owens.

I think ACDA is owned by the distilleries that are the founders. Hopefully it becomes a trade group that is owned by the members.

I don't really know the structure of either group.

[Roger]

I've had the opportunity to interact to some degree with Ralph at Tuthilltown in the development of my Distillery in NY. He has been very helpful and knowledgeable about the process as well as instrumental in the legislative process in NY, which has led it to the virtual forefront of relaxed state laws for our craft. He will no doubt continue to bring good things to the industry with his association with ACDA.

Now if we could just get him to work on Direct Internet Sales....

[bluestar]

Actually, it would be good if the two can run in parallel but have different missions, although there is an issue of membership cost. ADI would be best doing things like running the forum, holding the convention, promoting courses, etc. The ACDA should be focussed on legal and economic issues for anyone operating under a craft distiller's license in the US. And acting as an umbrella organization for all of the state associations or guilds. The ACDA is a 501©6 corp that can not economically benefit its directors, as it should be. It is a representative organization. The ADI strictly speaking is not. It is owned by someone, and it could generate revenue. However, the current ACDA goals also talk about duplicating some of the ADI activities, including running tastings, etc. I actually don't think it is helpful for a representative organization to run activities that have potential conflict of interest issues with its membership. Or better if perhaps it can do some of these things WITH the ADI. At least that is how it seems to me, but I have no knowledge of the back room issues that might be in play.

RIght now, we have chosen to be a member of both.

[Michaelangelo]

I have had some experience in organizations where the growth of the industry has had similar outcomes. At some point we reach a divergence of thought and function where the needs of the revenue producing members must be met. It seems we are at that point. At the recent ADI Conference in Denver one of my partners said "what this industry needs is a professional management company to put some structure in place, and address legislation". This will be necessary to make sure that we have a voice that will actually be heard.

I think that there is a place for both ACDA and ADI, but it should have been looked at as a metamorphosis, not competition. I agree with Steven that they each have a place and should do what they do best, or are capable of. In my opinion ADI should become the Educational Foundation of ACDA and ACDA should concentrate on how we will all stay in business. Through lobbying efforts and by providing a unified front in Washington and at the State level we will be taken seriously rather than be looked upon like a small group of "moonshiners". This is no longer a small group, and the Craft Distillers in this country are stimulating local economies and generating real revenues and paying real taxes.

[cbenoit]

I think the far more interesting question here is not what this means for ADI, but what the relationship between ACDA and DISCUS will be, given ACDA's stated purpose. The ACDA distilleries are also DISCUS affiliate members (haven't confirmed one by one, someone please chime in if there's not straight overlap). Will ACDA and DISCUS work lockstep, or will we see the same divergence as we see between the Beer Institute and the Brewers Association, currently butting heads over the the BEER Act and SmallBREW Act.

Distillers will in short order have very clear signposts to evaluate ACDA. Presumably, for example, they support the "Distillery Excise Tax Reform Act of 2013" (HR 1806) that was introduced a few weeks ago. It cuts the excise tax for small distilleries to $2.70 a gallon for the first 60,000 gallons, and even gives strong direction to the IRS to promulgate regulations to ensure that no group that produces more than 60,000 gallons benefits.

Mark Gorman of DISCUS has said, however, that his organization doesn't support an excise cut at this time. Rep. Tom Reed's office has worked with DISCUS on a draft spirits excise tax cut bill that, unlike last year's HR 777 and HR 1806, would apply to any producer's first 65,000 gallons, and also struck out the corporate control test for producer. I.e., a tax cut for all. If this bill did get introduced, we'd actually have a complete parallel to the competing beer bills.

Could be that I missed it, but I'd love to hear each organization's view of HR 1806.

Also will be interesting to see whether ACDA takes over other DISCUS functions, like being the intermediary for USDA's Market Access Program.

Finally, my two cents. ADI will continue to be the focal point for the industry because it excels at bringing lots of people together, no matter where they're at. No barriers to entry. There is a need for some more organization around lobbying, but ACDA would need to broaden its base a lot. Until you have high overhead full time office space in DC and are in a position to hire in-house former committee staffers and put other advocacy shops on a payroll, you need to go the other route - hard core grass routes (think of the internet community and SOPA). Asking $500 a year from DSPs will amount to nothing unless you have an army of letter writers behind you.

[TetonDistillery]

I have never met Bill Owens, the founder of ADI. So I cannot confirm anything about the comments on the Chuck Cowdery blog.

http://chuckcowdery....distillers.html

All ADI really does is an annual convention, organize a few distilling classes a few times per year and the occasional survey.

That is very easy for ACDA to replicate.

The tough part is the type of work ACDA seems to want to tackle. If ACDA can organize dozens (or hundreds) of craft distilleries around a legislative agenda, then our focus will shift to ACDA. It is easy to do an annual convention, put a forum on your website, do a survey of members, etc.

As our craft distilleries grow and become larger businesses, those that survive will be interested in legislative issues that govern taxes, distribution, what can be sold directly from our distillery tasting rooms, etc. If ADI is not interested in being the trade group to help those distilleries organize on those issues, then I don't see much of a future for ADI.

[Max Action]

I think ADI was in the best position to become a non-profit trade association, but continuing as a for-profit business owned by an individual makes something the ACDA necessary. Craft distillers need an organization, not DISCUS, to represent and promote their interests. I've posted previously on this site inquiring what the benefits of ADI membership included, but never receieved a satisfactory answer, and never saw any benefits (other than an email newsletter/advertisement) during the time that I was a member myself.

[John D]

I think ADI was in the best position to become a non-profit trade association, but continuing as a for-profit business owned by an individual makes something the ACDA necessary. Craft distillers need an organization, not DISCUS, to represent and promote their interests. I've posted previously on this site inquiring what the benefits of ADI membership included, but never receieved a satisfactory answer, and never saw any benefits (other than an email newsletter/advertisement) during the time that I was a member myself.

Not a paying member for those reasons.

[TetonDistillery]

After chatting with Rory at ACDA and after discussing it with the owners of our distillery, Grand Teton Distillery is going to become a member of ACDA.

[Mash]

So far in my second year as an ADI member, my opinion is ADI is more of a social club that puts on a big party once a year. It is not as sharp as an organization as it should be. I'm regretting the full membership price I paid as our distillery is not getting what it paid for, i.e. spread sheets, training, etc. Yes I've requested this access, more than once.

Also, not trying to be overly judgmental , ADI is a good entry level place to start, but I need a more professional organization that affects the craft distiller. "Distiller" is the operative word. GNS is fine and and re-bottlers..... well re-bottle spirits that they don't make. I'm not in that business and don't want to be, so I'd rather be with the people that are.

I think being a DSP should be a requirement.

Guess I've got to spend more $.