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hen Melissa Katrincic, co-owner, president, and CEO of Durham Distillery in Durham, North Carolina, placed a purchase order for the only bottle her distillery uses in early 2021, she had no idea she was embarking on a months-long quest. Her distributor informed her that, not only was the handsome, square-shouldered Liberty bottle currently unavailable from the manufacturer Piramal, but Piramal was actually shutting
A few weeks later, a shortage in another SKU, Durham Distillery’s Navy Strength Gin, led to another exhaustive search. Finally, Katrincic turned up 15 pallets of Liberty bottles from a broker, complete with a $2,500 surcharge. “I don’t know where she got them,” said Katrincic. “I didn’t even ask her.” Not long afterwards, she got word that Piramal’s new factory in India was online, but it wasn’t planning to do another run of Liberty bottles until 2022 – and prices would be up 20%. And it wasn’t just bottles. Corks, corrugate, gin botanicals, even the Grand Marnier Durham Distillery relies on for its signature nitro draft corpse reviver cocktail were either harder to get, more expensive, or both. “It feels like the perfect storm,” said Katrincic. Durham Distillery’s story isn’t entirely unique. The same dynamics are playing out
BROKEN down their U.S. plant and transferring manufacturing to India. So Katrincic called every glass broker in the country, eventually scrounging up seven pallets of Liberty bottles in June. “We didn’t even care about the price at that point,” she said. The bottles were whisked off to the screen printer, quickly filled, and Katrincic breathed a sigh of relief – even though the hiccup meant she’d been completely out of stock of her flagship Conniption Gin for three weeks. As she tells the story, she laughs ruefully. “We had no idea at that time what we were headed for.”
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in all retail and manufacturing sectors: buckling supply chains leading to scarcity and increased prices at the same time as consumer demand has skyrocketed. Glass bottles seem particularly heavy-hit, disrupting the entire beverage sector. Distilled spirits producers, however, have the fewest options for shifting into other packaging materials, leaving many feeling trapped in a collective logistics nightmare. At a fundamental level, the disruptions are a result of a classic mismatch between supply and demand. In 2020, many beverage producers either held off on purchasing glass entirely, or bought less glass in anticipation of reduced demand. As COVID-19 restrictions began to lift in 2021, a huge burst of new glass orders began to roll in to manufacturers and distributors.
“March [2021] is when we really started to see an influx,” explained Jyll Vidal, director of sales for the West Coast and Canada at Saverglass. Right around the same time, shipping costs began to skyrocket, particularly for freight being moved between Asia and North America, which was already subject to new tariffs imposed by the Trump administration and retained by the Biden administration. “Distributors bringing in glass from Asia saw these incredible prices, so they just stopped shipping,” she added. The result? Delays on critical supply shipments. In response, beverage producers began hunting for other options with an increasing sense of urgency. “Worldwide, people are calling every manufacturer,” said Vidal. “It snowballs.” Concurrent with booming demand, unfortunately, are chronic disruptions at virtually every stage of the global supply chain. Factories around the world are understaffed. Shipping containers, thrown off course by un-
Supply Chain Challenges Leave Distillers Scrambling Written by Margarett Waterbury
usual spikes in medical and PPE shipments, are scarce. Shipping costs have increased, in some cases, more than 500 percent from preCOVID rates. Once ships arrive in U.S. ports, staffing shortages have slowed the unloading process to a crawl. “It can be eight weeks,” said Vidal. “We’d just see the boats sitting out there in the Port of Oakland, and they’re not unloading them.” And once those containers finally do get unloaded, a profound dearth of truck drivers adds yet another bottleneck. Layered atop this buckling supply chain are increasing raw materials costs, higher fuel costs, and the basic operational challenges posed by similar disruptions in upstream supply chains that provide the equipment everything needs to work, from glass molds to the computer chips that power trucks. “There is a backup in every single part of the supply chain,” said Vidal. “Pallets. Dividers. Plastic wrap. Every industry has a backup, which slows things down.” W W W . ARTISANSPIRITMAG . C O M