Facing The Covid-19 Crisis With Action

Posted: Apr 07, 2020



How US Distillers Are Managing the Pivot to Sanitizer Production

It’s been an unusually busy few weeks during an unprecedented historical period for US craft distillers. Here is a roundup of how some state guilds and distillers have taken action.

California
The leadership of California Artisanal Distillers Guild (CADG, https://www.cadistillers.org) are working distillers transitioning their businesses to hand sanitizer production with “nearly every member making hand sanitizers getting these products to public health officials, first responders, health care workers, and vital industrial partners,” according to a media release. Regardless of size or membership status in the CADG it’s issued four targeted email campaigns since the TTB’s first guidance on COVID-19 and hand sanitizer production on March 18. CADG has also worked with the state’s Department of Alcoholic Beverage Control to include provisions in its notice to temporarily remove restrictions on a number of activities surrounding the sale and movement of alcoholic beverages, most notably to permit the delivery of spirits directly to consumers. “This relief for distillers was crucial to our survival as a growing industry,” with frequent updates issued informing distillers of critical regulatory and legal changes.

Maryland
As of March 26, 2020, the Maryland Distillers Guild (MDG, https://marylandspirits.org) received urgent requests for over 5,300 gallons of sanitizer with 10,699 gallons projected for the foreseeable future. “Most distilleries are trying to meet the demand of the urgent needs closest to them, and handling logistics themselves,” with demand forcing the MDG to triage requests. “The 17 Maryland distillers who are now or are transitioning to making hand sanitizer face obstacles of legal compliance, ingredient access, volume projections, shortage of available supplies, delivery staff and schedules, and prioritization of consumers,” confirmed Grow & Fortify (https://growandfortify.com), the marketing firm representing MDG.

MDG’s treasurer and co-owner of its Baltimore Distilling, Max Lentz, iterated that “the format of our guild is based upon entertainment and on-site consumption, both of which have been shut to us although the governor has allowed our viability to remain open as bottle shops.

Frederick’s McClintock Distillery transitioned production to accommodate WHO-compliant hand sanitizer production of over 8,000 gallons distributed mostly gratis to local emergency responders, nursing homes, food banks, shelters, mental health facilities, and USPS staff.

Minnesota
Far North’s Mike Swanson is partnering with neighboring distilleries Tattersall, Du Nord, Brother Justice and Vikre working through All Hands (https://www.allhandsmn.org), a collective centralizing the sourcing of raw materials for production of denatured alcohol to be bottled in Minneapolis for distribution locally by each distillery to care facilities, EMS workers, hospitals and the like.

New York
“It took us 18 months to generate a business plan for creating a distillery and only 48 hours to turn it into a hand sanitizer facility,” exhorted Jason Barrett, President/Head Distiller of Black Button. “Within a week we’ve gone from bottling 1,000 bottles of spirits to over 30,000 bottles of hand-sanitizer.” Possessing several bottling lines Barrett’s just purchased two more to keep up with demand, is running a full complement of full- and part-time staff in order to service major health care organizations, and has established A Go-Fund-Me page for others to benefit from the new work Black Button’s initiated. “Two years of nationwide expansion plans have ground to a halt with distribution partners either delaying or scuttling launches. At least $600k worth of planning and preparing and salary has already been wasted,” he said.

Further east Brian A. McKenzie of Finger Lakes Distilling has slogged through regulations to try to help his community with some hand sanitizer with an initial batch of 300 gallons with the intention of “having everything in place to manufacture about 10 times that over the next week or so. Our goal is to first help the most essential organizations — local hospitals, health care providers, law enforcement, etc. We’re donating product in bulk for now,” though he plans to soon sell some to the community in 6 oz containers.

Pennsylvania
“Mine may be the only hand sanitizer produced from heritage bloody butcher corn,” said Washington’s Jim Hough of Mingo Creek Craft Distillers. Hough had ordered 190 proof GNS with the expectation of producing hand sanitizer only to be notified a day later that his Liberty Pole distillery would face at least a two-week delay necessitating it produce its own alcohol rather than wait. “As a whiskey distiller we don’t typically produce ethanol over 135 proof, so we modified our mash bill adding more grain, triple distilling to produce in the 175–180 proof range; without a column still that’s as high a proof as we can achieve.” The Hough family donated the bulk to its local hospital and other health care providers as well as first responders. “If we’ve any remaining we’ll offer it to the public at or below our cost,” echoing Finger Lakes’ McKenzie.

Nearby in Pittsburgh, Wigle Whisky Distillery has also found it difficult to procure the required chemicals, figuring out regulatory/labeling requirements, and even making the alcohol for hand sanitizers. “Our pot stills are not really designed to distill to the required proof for hand sanitizer so it is taking a lot longer than our normal distillations,” said marketing director Michael Foglia, though since they have been able to blend the materials and deliver the product. Online sales were previously a minor part of the business, but the company now finds itself shipping four pallets of packages daily while selling many bottles and kits via an improvised curbside delivery system. That said, demand for its core products has been high, “so we are also emptying and bottling significantly more whiskey than is typical for this time of year.”

Herman C. Mihalich of Dad’s Hat Rye has been supporting Robert Cassell of New Liberty and the Pennsylvania Distillers Guild (https://padistillersguild.com) to organize the supply of ingredients and packaging, as well as funding, back-office paperwork to secure and disperse funds; “not very glamorous, but I hope it’s helping.” Mihalich is reviewing his ability to supply ethanol at the high proof levels required for hand sanitizer as he reconsiders firing up his still.

At Lebanon’s, soon to be Hershey’s, Hidden Still Spirits owner David Stein has converted all vodka production to produce and provide hand-sanitizing product to area nursing homes at no cost. So as to “relieve the pain of others while hopefully avoiding sales loss” he’s considering the creation of a $19 straight whiskey to compete with Jack Daniels and other entry-level brands. “It’s not the right time to actively promote my core products of bourbon and rye.”

Andrew Martin of Lancaster’s Thistle Finch Distilling began providing a 70% ABV solution to critical industries for use as a surface disinfectant spray having since commenced hand sanitizer production though as of this writing was unsure as to what scale he’d produce this.

The Pennsylvania Distillers Guild is collectively producing over the next 4 weeks 1.3 million 4 oz sanitizer bottles, produced and procured with the help of government loans and working capital lines of credit acquired with neither interest nor closing costs. “Participating guild companies are doing this at their own cost, on a not-for-profit basis,” according to its president Rob Cassell. “This also allows us to hire currently unemployed restaurant & bar staff as contractors at a small hourly wage to help them get by during this difficult time,” with the first batches shipping last Friday, April 3.

Texas
“We will not know the full effects of this public health emergency on Texas’ distilling industry until the mixed beverage sales and excise tax reports are submitted April 20th,” said Joanna Salinas co-founder/general counsel of Still Austin Whiskey, Board Member of the Texas Distilled Spirits Association (https://texasdistilledspirits.org) and Texas Whiskey Association (https://texaswhiskey.org). Both organizations sent letters to Gov. Greg Abbott asking third-party carriers be allowed to acquire bottles from distilleries delivering them to consumers, to allow distilleries to make direct deliveries to consumers and to expand the two-bottle restriction on direct retail sales while social distancing and shelter-in-place orders are in effect. Both organizations have persuaded its Department of Emergency Management to secure supplies and financial aid from the state for distilleries producing hand sanitizer, providing a means for the state to purchase hand sanitizers from its distilleries.

Virginia
Gareth H. Moore, CEO of Virginia Distillery Co. and president of Virginia Distillers Association (VDA, https://www.virginiaspirits.org) said that, “ad hoc efforts by all Virginia distilleries have transitioned from consumption to [making] hand-sanitizing alcohol. If I’d have been asked a month ago what we’d do to help a global pandemic I’d have suggested our great drinks.” Perplexed at why industrial grain producers haven’t ramped up so quickly, he coordinates teams to go to local pharmacies to acquire the maximum allowable of glycerin and hydrogen peroxide noting that “the bottleneck has been salable containers since we can’t efficiently use glass bottles, though many of our members are offering self-serve from a bulk container. We ordered in January 2,800 200-ml plastic bottles labeled ‘Hand Rub,’ an ‘alcohol antiseptic topical solution,’ depleting them all as of last Tuesday. We’re now coordinating with Dept. of Emergency Services to deliver bulk quantities of ours to their Richmond distribution center.” Moore added that the VDA is coordinating closely with the state’s ABC, and the TTB and FDA for guidance.

Reservoir Distillery’s co-founder Dave Cuttino feels very much on the frontline “as my brother is an ER doctor for the Commonwealth,” lamenting that, “it’s shocked me that our country is so unprepared for this situation; PPE and sanitizers haven’t been kept up,” explaining that he produced a WHO-based formula requiring hydrogen peroxide, an ingredient that isn’t necessary for the minimum 60% international alcohol standard. “We’ve a serious problem needing action — it’s a matter of life or death that those of us with a chemistry background are able to meet.” Reservoir provides 8–10 gallons of sanitizer daily at no cost to the public in 10 oz portions, and with donations going 100% to the Holli Fund supporting local restaurant and bar workers in crisis. Cuttino has been approached by and is supplying institutions with far larger quantities as “the need is so great” adding to “please buy local!” Reservoir’s typical craft distillery insurance coverage doesn’t cover these new responsibilities so he had to acquire pre-COVID pricing coverage to cover its liabilities emphasizing, “we’re doing it because it’s the right thing to do.”

Fellow Virginian Copper Fox has also found it difficult to source all of the supplies needed to meet demand. “We plan to have 2,000 12-oz personal size bottles, and 576 half-gallon refill bottles and bulk sanitizer available the week of April 6th,” said Cheryl Targos.

Nationally
The Distilled Spirits Council of the US (DISCUS) has been lobbying Congress to waive federal alcohol excise tax of un-denatured alcohol for use in hand sanitizer. Denatured alcohol, used to make products not meant for consumption, is already exempt. Daily updates on DISCUS’s communications may be found at https://www.distilledspirits.org/news/discus-monitoring-covid-19-industry-news/ – Resources.

The TTB announced last week that any permitted distillery could switch over to manufacturing hand sanitizer or ethanol for use in sanitizer production without any additional approval.

And as of March 31 all of TTB’s COVID-19-related news and guidance may be found at this link. In submitting TTB Form 5620.8 Claim – Alcohol, Tobacco and Firearms Taxes it strongly encourages that this electronic submission be used to process, send your claim form and any supporting documentation.

By David Furer 
April 6, 2020

Source: Distilling.com



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