Many local distilleries are giving away hand sanitizer, but it’s not free

When David Johnston tried to buy several bottles of hydrogen peroxide the other week, the clerk at his local Walgreens gave him a hard time.

“They were only going to let me buy two bottles, and I’m like, ‘I was contacted last night by someone from Abington Hospital and they say they need sanitizer.’”

Fortunately, Johnston, the owner of Huntingdon Valley’s Mermaid Spirits and a research scientist for the U.S. Department of Agriculture, was wearing a shirt with the distillery’s logo, plus his federal ID badge.

“It didn’t take much convincing,” Johnston said with a laugh. “And the salesperson, she says, ‘If you need more, you come back and see me, sweetie.’”

Johnston is one of hundreds of distillery owners in the United States who have curbed regular production of rum, vodka, whiskey, and other spirits in order to concoct something with less favorable profit margins and, at the moment, exponentially more demand: hand sanitizer.

After hand sanitizer evaporated from store shelves and the internet in early March, distilleries all over the country started brewing makeshift substitutes with various formulas. On March 18, the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a letter to the nation’s distilleries, authorizing them to make it according to World Health Organization’s guidelines, which call for a mix of ethanol, glycerol, and hydrogen peroxide.

Small distilleries have been quick to act since then, cobbling together hydrogen peroxide, diverting their own booze for sanitizer, using whatever vessels they can to bottle it. At least 12 distilleries in the Philadelphia area, including New Jersey, have started making sanitizer. And customers have lined up in droves for free bottles of the stuff.

» READ MORE: These distilleries are making hand sanitizer — and, don't forget, booze

But although the sanitizer is desperately needed, the pivot to it isn’t straightforward. Distilleries’ regular business — events, tasting room sales, and distribution to bars, restaurants, and liquor stores — has been upended. For some, producing sanitizer is a way to stay busy, allowing distilleries to fill the void and keep employees on, or even add more. For others, especially smaller, lesser-known outfits, it’s all they can do to stay afloat during an indefinite stretch of economic uncertainty.

“There’s no war chest that you can create in a start-up company after two or three years to take you through something like this,” said Mark Ganter, co-owner of Atlantic City’s Little Water Distillery, which began making hand sanitizer shortly after the TTB’s letter went out. Ganter is fielding orders for hundreds of gallons’ worth from Amazon and other shipping organizations, and giving free bottles to locals.

In normal times, Little Water makes 48 Blocks Vodka, Liberty Rum, Whitecap American Whiskey, and other brands. New Jersey distilleries can sell bottles to-go from their sites under the state’s stay-at-home order, but current laws prevent them from delivering to consumers. With Little Water’s restaurant and bar clients shut down, regular production is on hold as the distillery blends hand sanitizer.

“Even getting involved in an endeavor like this is an enormous risk to us, because none of this is free,” Ganter said. “Without having any outlet to sell our products, there’s no money coming in the door.”

Pennsylvania distilleries have an advantage in that they’re able to ship directly to in-state customers. But even with pickup and delivery capabilities, the loss of tasting room sales is significant, said Bluebird Distilling founder Jared Adkins.

“All of the distilleries that I know, we all make our money off of the tasting rooms,” Adkins said. “[They’re] 80% or 90% of our business.” Bluebird’s main location is in Phoenixville, and it has two locations in downtown Philadelphia.

With enough inventory on hand for online orders, Bluebird still has shifted to sanitizer. Requests have flowed in from ambulance services, police forces, an energy company, even Lockheed Martin. The company prioritizes orders for hospitals and community centers, but organizations with purchasing power are essential.

“The companies that can … pay for it are happy to donate to the cause,” Adkins said. Bluebird donates sanitizer to organizations that can’t pay.

» FAQ: Your coronavirus questions, answered.

As with materials for DIY hand sanitizer, professional-grade ingredients have become harder to find, and prices have spiked with demand. Adkins’ staff luckily secured glycerin off Amazon while they still could. They scoured pharmacies and grocery stores for hydrogen peroxide. For ethanol, they used a combination of their own high-proof alcohol (which otherwise would have been used to make Bluebird’s regular line of spirits) and some from wholesalers. But even that’s in short supply.

“It’s getting much tougher,” Adkins said. “Even containers — it started out there was an abundance of containers. Now, 2½ gallons [was] the smallest container anywhere online that we could find.”

Johnston, of Mermaid Spirits, was in a similar predicament. He had planned to buy 2-ounce bottles for sanitizer that he could give away to customers, but when he went online, there were none. Instead, he’ll use bottles intended for his Forbidden Drive Vodka. “I can’t get anything else,” he said.

Mermaid Spirits is tiny: It produced 2,700 bottles last year (“Bacardi spills more in the shift than I make in a year,” Johnston likes to joke) and has three part-time employees, plus family help. After the Montgomery County shutdown closed his bar at Huntingdon Valley’s Penn Cinema, Johnston redirected his bartenders and salesperson to help make deliveries and blend sanitizer.

Bucks County’s Theobald & Oppenheimer is on the opposite end of the spectrum: The second-largest distillery in the state, it made $2 million worth of alcohol last year between its two brands, Faber Liquors and Single Prop Rum. Like its smaller peers, Theobald has pivoted to hand sanitizer — also using its own bottles — but it can churn it out by the pallet.

“We bought ethanol at 200 [proof] and we get a tanker in a day,” said T&O chief financial officer Kelly Festa. “We mix it with hydrogen peroxide and glycerin, and then we run it through the bottling lines.”

The Trumbauersville company has increased the number of production shifts and employees. “We’re running three shifts a day, seven days a week, trying to get as much out the door as possible,” Festa said. “We’re getting orders left and right, from hospitals, the U.S. Postal Service, huge supermarket chains, you name it.”

By the end of March, T&O had filled 167,300 one-liter glass bottles with hand sanitizer branded with the Faber Liquors label. (“Do not drink!” it cautions.) It was prioritizing orders for health-care facilities, nursing homes, and first responders — organizations that are buying it by the truckload, Festa said. But the company also sold a small amount (at $8 a bottle) online through Art in the Age’s website; it quickly sold out. Customers who order liquor for pickup at T&O’s Telford outpost can buy sanitizer there, as well — while supplies last.

At the moment, hand sanitizer is all T&O is making. Like Bluebird and Little Water, it has enough existing inventory for online orders.

» READ MORE: What you need to know about buying food (and booze) during the shutdown

“It’s kind of hard for us to make as much money [selling to individuals] to begin with, vs. huge orders that bars place,” Festa said. “So it is in our best interest financially to make the sanitizer as well.”

Theobald & Oppenheimer has no tasting rooms. Though its brands are less familiar than local standouts such as Bluecoat Gin or Dad’s Hat Rye, the company is better positioned to weather the coronavirus-induced quarantine than its craft competitors.

The successful model for building a craft distillery in modern times — “starting small, selling directly out of your tasting room, giving people tours of your distillery,” with only limited retail distribution — will be challenged in this time, said Rob Cassell, master distiller at Kensington’s New Liberty Whiskey Distillery.

“The way things have kind of panned out, if your model was leaning toward that or still in that phase before you’ve gone to the larger three-tier distribution model, you’re definitely in a danger zone right now,” he said.

Cassell, also president of the Pennsylvania Distillers Guild, has been involved in an initiative that might level the playing field and aid smaller distilleries making sanitizer. The guild centralized purchasing power — eliminating markups on ethanol and hydrogen peroxide — and partnered with a plastics supplier in Boyertown to produce 1.3 million bottles. It also secured funding from Pennsylvania’s state government and PIDC to reimburse distilleries for materials and labor.

“That allows us to deliver a product to the state at actually less than what you would buy a bottle of hand sanitizer before the crisis,” Cassell said. “We’re able to deliver a 4-ounce bottle for $1.50.” He estimates a 1-ounce bottle would have cost about $1 precrisis.

The guild initiative also centralized blending at a few larger facilities like Philadelphia Distilling, so it can distribute the liquid to smaller partner distilleries. From there, distillers can use their bottling lines and professional networks to get sanitizer out to organizations in Philadelphia, Pittsburgh, Harrisburg, and beyond. The effort will enable some distilleries to hire contract employees.

Cassell and his colleagues have been on-boarding new distilleries for the last few weeks. He projects having 21 to 24 online by mid-April, with more on the way — enough to produce 450,000 four-ounce bottles daily.

“It’s a good thing when you can organize and pull everybody together for a common good,” Cassell said.

Pennsylvania distilleries’ ability to ship alcohol directly to consumer was also a result of organizing. Until the coronavirus quarantine cut off access to state stores, it was little-utilized by the public at large. But it’s become central to distilleries and customers alike in recent weeks.

“We probably have more people than ever experimenting with stuff from their local distilleries,” Cassell said.

For small distilleries making a suddenly precious commodity — if only temporarily — this may be a moment to bring in new customers: Come for the hand sanitizer, stay for the craft booze.

“When we all get back to work,” Little Water’s Ganter said, "the hope is that there’ll be some kind of public support for what was endured here.”