The Monthly Mash: April 2020

The Monthly Mash

Volume 5.4

 
Member-Owned, Industry-Driven
 
 
 
ACSA Mission:
To elevate and advocate for the community of craft spirits producers.
 
 

From the Desk of Margie A.S. Lehrman,

Chief Executive Officer

Dear Friends in the Craft Spirits Industry:

Be prepared. Always, be prepared.

I learned that motto from my brother, the Eagle Scout. Whether we were kayaking through the Erie Canal or hiking the high peaks of the Adirondacks, I was continuously reminded (older brother equals lots of advice) that planning was key. Sometimes, however, despite our best efforts to think through obstacles in advance of our adventures, things happened. For instance, when climbing Mount Marcy just south of Lake Placid, an unanticipated weather band moved through the region. We were caught on the mountain without the appropriate rain gear: All forecasts called for ‘hot and sunny’ that summer day. With sudden heavy thunder and lightning, and massive amounts of rain that flooded the rockface, shelter was needed. Fast. The trail map showed a ranger tower which took us off course. It didn’t matter. We ended up sleeping in the smallest of spaces. But, we were dry. We were safe. And, we had refuge. All the bug repellant, bear bells and sunscreen remained in our backpack. The one item that got us through was that map and the quick thinking to quickly change direction.

Why share this story now?

I have been thinking about how our ability to move forward is a lot like hiking. You plan; you start a course; a challenge gets tossed your way; you evaluate and change direction; and then you make your next plan and act on it to forge ahead. You remain steady, knowing that mental toughness is a key ingredient in the mix.

From the start of the pandemic, ACSA has continued to climb. While we’ve needed to change course (postponement of our convention, virtually announcing our spirits medalists and delaying national elections for our board of directors), we’ve also trekked through new territory (assessing what the federal government stimulus packages mean for our small businesses, becoming educated and educating others on hand sanitizers, and continuing to engage with new features such as Craft Spirits Live). We focused on items important to you, so if you missed our joint program with TTB, exploring the Final Rule on Modernization of Labeling and Advertising, which goes into effect on May 4, read on.

No one can predict with any certainty how the pandemic will change our industry (see the Q&A below with our sponsor Whiskey Systems). ACSA will continue to BE PREPARED as best as we can despite the tough days ahead. Together, we can and will stay strong. And, although we may change trails, we will never veer from our mission: To elevate and advocate for the community of craft spirits producers. And, with your continued membership and support, we will continue to do so.

Wishing you health, safety, and peace,

Margie

 

ACSA Election Postponed Until Summer

 
As it is critical to keep a unified leadership during the pandemic, ACSA’s national election for its Board of Directors (originally scheduled to begin this month) is postponed. The ballot is expected early summer with current board terms extended until that time.

 

New Round of Federal Funding Provides Loans for Small Businesses

 
Last week, President Trump signed into law a new round of funding to help small businesses meet their payroll challenges while they have diminished or no business at all given state orders during the pandemic. The new legislation replenishes the Paycheck Protection Program (PPP) by $300 billion. The first tranche of funding for $349 billion was very rapidly committed. The PPP loans are forgivable for 2.5 times payroll for an eight-week period. If any portion has to be paid back it is a 1% interest loan over two years.

The legislation also funds the Emergency Economic Injury Disaster (EIDL) grants from $10 billion to $20 billion. While these loans have to be paid back, they allow a very quick $1,000 per employee advance (which does not have to be paid back). They are funded directly by SBA.

To insure this program is getting to very small businesses and made by small banks and credit unions, $60 billion is set aside for community financial institutions, defined as small insured community banks, credit unions, minority depository institutions, certified development companies and microloan intermediaries. 

This is actually in two brackets. $30 billion is available for institutions with assets between $10 billion and $50 billion and the $30 billion is for institutions with assets less than $10 billion. We hope this means they are more widely available to small businesses like distillers across the U.S.

We encourage all of our distillers to determine if they are eligible for these loans and to contact institutions in their area, or even nationally, to receive this assistance. Loans under the funding round were available as of Monday, April 27. More information is available via the SBA at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options.

As always, ACSA is here to help and answer questions you may have to help our craft distilling community. For questions, please contact legislation@americancraftspirits.org.

 

TTB’s Final Rule on Modernization of Labeling and Advertising

In early April, the Alcohol and Tobacco Tax and Trade Bureau (TTB) amended its regulations governing how craft spirits producers, among others, label and advertise the liquid inside our bottles. The final rule addresses certain proposals included in Notice 176, Modernization of the Labeling and Advertising Regulation, which will go into effect on May 4.

In late April, ACSA hosted an interactive town hall meeting, where Susan Evans and Christopher Thiemann (TTB), Mark Shilling (former ACSA president and ACSA Government Affairs Committee Chair) and Nicole Austin (former ACSA Board of Directors founding member) discussed the new guidance and its impact.

Shilling and Austin led the charge last year to solicit your direct feedback about the proposed rules. Also in 2019, ACSA held a town hall, webinar and individual meetings where discussion was entertained, and continuously reached out to remind members and the guilds that their feedback was essential to this process. We also held a series of conference calls to engage members from all categories to examine and contribute to the TTB proposal. Ultimately, the ACSA Board of Directors both analyzed and signed off on the ACSA response, which presents our industry’s diverse input as a single, unified voice. 

 

Follow us on Instagram for Craft Spirits Live


Last week we kicked off Craft Spirits Live on Instagram Live. Each week, we’ll connect with a leading craft spirits producer for distillery tours and engaging conversation. In the first episode, ACSA Board Member Amber Pollock of Backwards Distilling Co. joined editor in chief Jeff Cioletti to discuss how Backwards is working through the pandemic. In Episode 2, which went live at 2 p.m. on Wednesday, April, 29, Brandon O’Daniel, master distiller at Copper & Kings American Brandy Co., joined the conversation.

Future episodes will feature Courtney McKee of Headframe Spirits, Maggie Campbell of Privateer Rum, Becky Harris of Catoctin Creek, Jake Holshue of Old Trestle, Molly Troupe of Freeland Spirits and more!
 
To watch, click here and make sure you’re following @craftspiritsus on Instagram. When we start a live video, our profile picture will appear at the top of the feed with a colorful ring around it and the word Live. Tap or click our profile picture to view our live video. You can watch the live videos on the Instagram app or on Instagram.com. And you can also watch a replay in our Instagram Stories for up to 24 hours after the interview.

ACSA Launches Hand Sanitizer Marketplace

 
If you have too much sanitizer and are looking for places to distribute, check out who needs sanitizer by scrolling down to the marketplace on our COVID-19 page. If you’ve run out of materials, see what supplier might be able to assist. Simply fill out the form that applies to you to get your information listed. Let us help connect you:
 
  • Distillers: Please fill out this form.
  • Suppliers: Please fill out this form.
  • Need Hand Sanitizer? This form is for those that are seeking hand sanitizer supply.

Importance of Registering Sanitizer

 
As hundreds of distilleries continue making hand sanitizer and sanitizing solutions to help during the COVID-19 pandemic, ACSA continues to work closely with regulatory groups, industry leaders and partners to assemble trusted information and guidance for craft distilleries. You can find many valuable resources here.


Last week, ACSA leadership met with the FDA and the biggest takeaways were the importance of following current FDA guidelines and the necessity to register if you are producing hand sanitizer, packaging or labeling for distribution (either for sale or donation). You must also register with the FDA if you are manufacturing ethanol for use by others in making sanitizer.

If you are concerned about improper production or labeling of hand sanitizers, we owe it to our industry to help that DSP who may be out of compliance. ACSA has developed a complaint process to allow you to anonymously file a complaint. ACSA will evaluate the claim and communicate with the distillery manufacturing the hand sanitizer, in an effort to determine the nature of the violation and help lend guidance to bring the product into full compliance. As we push for modernization and seek further regulatory relief, it is critical that we adhere to government regulation in all aspects of our business operations. Please use this form to lodge a complaint.  

On behalf of ACSA, thank you to each distillery that is manufacturing hand sanitizer as you are now an integral part of the process to stop the spread of this virus. 

 

ACSA Donates Sanitizer to

Oregon Convention Center

 
In March, we postponed ACSA’s 7th Annual Distillers’ Convention and Vendor Trade Show in Portland, Oregon, until August, due to the COVID-19 pandemic. To help with the ongoing crisis, the Oregon Convention Center (OCC), the host site of ACSA’s convention, became a temporary shelter for the homeless.

In an effort to help, ACSA recently donated hand sanitizer and antibacterial wipes that were planned for use at the convention. Multnomah County officials (pictured above) accepted the delivery to help protect the 140 individuals sheltered at the OCC.

Craft Spirits Awards: Best of Show

 
ChainBridge Distillery’s Bela Nahori accepts the Best of Show and Best of Brandy awards in the 2020 ACSA Judging of Craft Spirits.
ChainBridge Distillery, Best of Show in 2020 ACSA Judging of Craft Spirits

Bar Convent Brooklyn Postponed

 
Earlier this month, Bar Convent Brooklyn (BCB) announced its 2020 trade show will be postponed to August 11-12 at the Brooklyn Expo Center. In a press release, BCB officials said the health, safety, and well being of the hospitality community is BCB’s first and ultimate priority. BCB will be offering complimentary tickets for all members of the hospitality community to attend and it will provide education and support by offering online resources leading up to the show and information during BCB that addresses the direct and essential needs of the industry.

ACSA is hosting a craft spirits pavilion at the convention, and the following member distilleries will be pouring spirits. 
 

 

Join Our Complimentary COVID-19 Webinars

 
In case you missed them, all of our COVID-19 webinars are complimentary and available to download at the following links. Please note that some of the webinars may have some suggestions that are outdated as the guidance around hand sanitizer has rapidly changed. Please review the newest FDA and TTB guidance to ensure you are following the prescribed protocol.

Sponsor Spotlight: Q&A with Randall Buxbaum of Whiskey Systems

 
Whiskey Systems Distillery Management software is a complete production tracking, cost accounting, inventory management and audit-ready compliance reporting system that’s tailored to the unique needs of distillers. Making, blending or bottling, Whiskey Systems handles any process and any spirit type. We recently checked in with Randall Buxbaum, the national sales manager for Whiskey Systems, about how the company is working through the pandemic. Buxbaum has more than 25 years of experience as a senior manager in the supply chain and operations arena. In his role at Whiskey Systems, he works to help distillers understand the features and benefits of the craft distillery management system.

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.

 

From Craft Spirits Magazine

 

Pivoting in a Pandemic

 
Last week we published the latest issue of Craft Spirits magazine. We never would have imagined that we’d be publishing it for a completely different industry—and a completely different world—than the one for which we published the last edition. The COVID-19 pandemic has fundamentally changed the craft spirits business as we know it for the foreseeable future. We explore this new normal—if there even is such as a thing as “normal” anymore—in this special report on how the coronavirus has significantly impacted our industry and how producers are tossing out the conventional playbook to continue to operate in this dramatically altered landscape. 

Repatriating Rye

 
A research project involving a Pennsylvania distillery and a local university that started with only 5 grams of rye seeds about 5 years ago already has resulted in a (very) small batch of whiskey—which could be a harbinger for greater things to come in the realm of heirloom rye cultivation.

Click on the Cover Image to

Read the Latest Issue…


Craft Spirits TV

Craft Spirits TV: Montanya Distillers Confronts a Pandemic and Some Words From ACSA Awards Medalists
 
In this episode, Karen Hoskin of Colorado’s Montanya Distillers describes how COVID-19 has hit home. Plus, ChainBridge Distillery, Boot Hill and Wigle accept their medals from this year’s ACSA Judging of Craft Spirits.

Share Your Story With Craft Spirits Magazine

 
Do you have exciting stories to share about your distillery? We’re on the lookout for news for future issues of Craft Spirits magazine.
 
Keep us posted on new products, events, trends, tips and more by sending us a note at news@americancraftspirits.org.

Poll: Immediate Impact

If ACSA could impact only ONE action right now, what would you want us to accomplish?
Suspend FET payments throughout 2020
Enact permanent FET relief
Provide a tax credit for those making hand sanitizer
Advocate and help state guilds on direct-to-consumer shipping
Encourage allowance of additional formulas for hand sanitizers
Opportunities to virtually interface with members of Congress
Host regular virtual gatherings to connect with other distillers
Expand ACSA educational offerings
Find additional sources for low or no interest loans and grants
Create a fund for hospitality/travel (tasting rooms)
 

March Poll Results

 
In our March newsletter, we asked about challenges to your business during the pandemic. Here are the results:

Despite challenges to your business, have you been able to provide support to your community?
Yes: 62%
No: 38%

What type of support have you provided?
Donated to local food bank: 23%
Supported programs that assist bar and restaurant staff: 23%
Support for Meals on Wheels or other elder care initiatives: 20%
Support for healthcare workers and/or first responders: 17%
Other: 17%

Have you recently increased the amount you tip for takeout/delivery orders?
Yes: 43%
No: 57%
 

Welcome Newest Voting, Affiliate and Candidate Members!
 
ACSA extends a warm welcome to a few of our newest members:
 

©2020 American Craft Spirits Association; All Rights Reserved. Member Owned, Industry Driven.

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