How Inflation Is Impacting The Craft Distilling Industry

The James E Pepper Distillery in Lexington, KentuckyPhoto, courtesy James E Pepper DistilleryOver the last several years, widespread, persistent inflation and significant labor shortages have been a defining feature of the US economy. Recently I sat down with a group of craft distillers to explore how inflation has impacted them. Not surprisingly, all of them had experienced significant increases in operating costs, generally between 15% and 20%, over the last several years. Surprisingly, however, other than for labor costs, the increases they experienced varied dramatically depending on their activity and location.

According to Amir Peay, owner and operator of James E Pepper Distillery in Lexington, Kentucky, labor costs have increased by 30% to 40% over the last several years. Peay notes that “a distillery is a factory whose workforce consists of skilled blue-collar workers,” all of which have been in short supply. In addition, the distillery was undergoin …

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