ACSA: Describe the services that Whiskey Systems typically offers.
Randall Buxbaum: Our primary offering is our distillery software that manages inventories, tracks operations and generates records and TTB reports required for compliance.
Additionally, it is a great tool that gives you operational visibility of current and past activity, sales data, cost accounting and a variety of other KPIs. An added feature is our support team who help clients on a variety of distilling related questions.
In addition, we provide consulting services to distilleries, helping producers who have gaps in reporting, or perhaps are under scrutiny from the TTB for excise tax or report filing issues. We also help distillers with business modeling and profit margin analysis.
How has Whiskey Systems had to pivot during the pandemic?
Clearly any activities where travel is involved have been halted. We participate in several trade shows and multiple distiller guild meetings this time of year. On-site training and consulting visits are on hold, as well. Where practical, we are connecting via video conferencing. Otherwise, trips are postponed until we get the “all clear.”
I work from a home office, so that piece hasn’t changed, though I feel like I’m competing with my neighbors for internet bandwidth.
What have been some of the most common questions from distillers during this time?
Questions surrounding the production and reporting of hand sanitizer have dominated the conversations for the past month. Our clients count on us to stay abreast of changes in regulations, and there has certainly been a lot of that recently.
In addition to keeping up with bulletins issued by TTB and FDA, I have been on nearly every webinar offered by ACSA. The quality of presenters and the information provided on ACSA webinars and the website has been top notch and incredibly helpful.
We have also added functionality to Whiskey Systems, so our clients can easily document any proof gallons removed tax-free for medical or government use. Removals for denaturing has been supported on Whiskey Systems for a couple of years.
How do you see COVID-19 fundamentally changing the distilling business?
It’s hard to imagine that there won’t be negative economic fallout, and distilling is not immune to that reality. We won’t know the extent until social norms and purchasing patterns return to “normal.”
That said, it has been inspiring to see the resiliency and resourcefulness of the distilling community. In a matter of days and weeks, they have stepped out of their comfort zones and embarked on new endeavors, despite the uncertainty, to help those on the front lines of the pandemic. We have seen changes in delivery and distribution methods, new relationships with unlikely partners, and the manufacture of products for improbable consumers.
It’s been said that the story of the pandemic is less about what we have lived through so far, and more about what happens next. While no one welcomes COVID-19, there are valuable lessons being learned. Distillers have discovered that they are more agile and innovative than they ever imagined.
What are your thoughts on growth of the industry going forward?
One positive note is that off-premise and e-commerce sales of alcohol have had strong increases, so the consumer has not abandoned the product. Unfortunately, these gains are not distributed equally amongst all producers.
Over the next 12 to 24 months, there may be a bit of a pause in overall growth, and some producers will do better than others.
When the distilling community returns its focus to making high quality spirits, innovative cocktails and memorable customer experiences, they will lean on the lessons learned during the pandemic.
New DSP permit approvals have been strong, which indicates that recently people were still getting into the business or expanding current operations.
What words of encouragement do you give to the distilling community during this time?
Recovery is going to take some time. Opening the economy back up will be a process of fits and starts until a vaccine, or medical remedy is developed. It’s probably not happening in June.
So, in the meantime, continue to support your local communities with sanitizer, continue to lay down spirits for aging and replenish your inventories if possible.
Stay informed. Things change quickly so find the information sources that give current, concise, fact-based information.
Leverage every resource you can. This includes industry associations, vendors, government relief, etc. This is not a time to be passive and wait to see what happens.
Take care of each other. I’ve been around the block, and I’ve never seen an industry with the level of cooperation and collegiality as the craft beverage business. This is an incredible asset that will serve the community well.
We have a long history of enduring periods of difficult circumstances.
We also have a history of emerging from these times with a stronger economy, improved infrastructure and with better societal attitudes.
Through passion and hard work, the industry and its community members have enjoyed remarkable achievements so far. Stay the course. Better times are ahead.