Craft Distillers To Lose $700 Million As On-Site Sales Plummet
The Distilled Spirits Council of the United States forecasts that the nation’s craft distillers will lose 41% of anticipated sales this year, totaling about $700 million. Nearly a third of the industry’s workers have been furloughed during pandemic, and shuttered restaurants, bars, and tasting rooms have decimated sales. A study by the Council surveyed 300 distillers in 50 states, finding that on-site sales fell 25% or more since the start of the pandemic and over 15% of tasting rooms had closed entirely. Last year, tasting rooms brought in the majority of sales for 40% of U.S. craft distillers. Wholesale revenue to retailers and distributors also decreased by 25% or more for at least 40% of the distillers surveyed, and 11% of them said sales had completely stopped. .
Italy Becomes World Leader In Organic Wine Production
Nomisma Wine Monitor, using data from industry sources Sinab, Eurostat and Fibl, found that Italy now leads the world in total acreage used for growing organic wine grapes. As of 2018, 16.6% of Italy’s vineyards were organically cultivated, making up 26% of the world’s organically farmed vineyards. According a recent report from Nomisma’s, the country’s organic vineyard area grew 57% from 2013 through 2018. Europe’s green organic wine logo requires certified wineries to follow regulations, including bans on GMOs and on synthetic chemicals in vineyards. In the U.S., wines with under 10 parts per million (ppm) of sulfites naturally developed through fermentation can be considered organic; however, according to European standards, there may be up to 100 ppm for reds and 150 ppm for whites added as a preservative. Many Italian wineries assert that they have low carbon and water footprints, although no international industry guidelines exist to determine and regulate sustainability. Michele Minelli, co-owner of Salcheto in Tuscany, says, “Equalitas is working tirelessly with international institutions to create standards to officially define and regulate sustainability in the industry.” Salcheto was one of the first nine wineries to get a sustainable certification in 2018 by the trade organization Equalitas.
Bipartisan Senator Group Urges U.S. To Remove Tariffs On E.U. Food And Wine
A group of 13 U.S. senators from both sides of the aisle have asked that the U.S. Trade Representative’s Office (USTR) remove the 25% tariffs made last year on E.U. food, wine and spirits, according to a letter seen by Reuters. In the letter to USTR last Friday, seven Republican and six Democratic senators said American “restaurants, retailers, grocers, importers and distributors” are experiencing “severe economic hardship due to the increased cost of goods.” Senators also said “demand for these goods has declined, leaving importers and distributors with months’ worth of product, much of it perishable, in storage and in transit with no clear end date for the COVID-19 pandemic.” The tariffs came as retaliation for E.U. subsidies on large aircraft, and they have hampered the market for French wine, Italian cheese, single-malt Scotch whisky, E.U.-produced cured sausages, and more.
Last year, the United States was granted authority by the World Trade Organization to impose tariffs on E.U. goods by up to $7.5 billion. But at this point, the U.S. Distilled Spirits Council has weighed in, urging the E.U. and U.S. to drop beverage tariffs, saying both sides “have suffered enough.” The council pointed out that Scotch Whisky imports by the United States decreased nearly 33% from October 2019 to May 2020, marking a $378 million decline over the same period a year earlier. U.S. whiskey exports to the E.U. have also fallen by 33% or $300 million according to the group, as a separate dispute caused the E.U. to impose 25% tariffs on all U.S. whiskey imports back in June 2018.
$2 Billion In Lost Champagne Sales Deflates Grape Market
As the pandemic persists, demand for celebratory bottles of bubbly have taken a nosedive, crippling France’s Champagne region. Producers have millions of excess bottles in inventory, according to a recent Associated Press report. “We are experiencing a crisis that we evaluate to be even worse than the Great Depression” said Thibaut Le Mailloux of the Champagne Committee, known as CIVC, which represents around 16,000 winemakers. The committee estimates losses of $2 billion for this year with 100 million bottles of champagne throughout the region that will go unsold by 2020’s end. On August 18, CIVC will hold a meeting to look at strategies that minimize the economic fallout. The most likely option will be a substantial cap on future wine grape production to prevent the price of Champagne from plummeting in the wake of high supply and low demand. Subsequently, unprecedented amounts of grapes and alcohol will reportedly need to be destroyed or sold to distilleries at low prices. .
Why “Clean” Wine Is Not So Transparent
Social media and wine enthusiasts erupted last month when actress Cameron Diaz and fashion entrepreneur Katherine Power launched their new wine company, Avaline. The pair have marketed their wine as a transparently labeled product with no additives, using the term “clean wine.” It’s true that winemakers are not required to list ingredients on wine labels and additives such as sulfites are sometimes used. “No transparency, no labelling,” says Power. In the video posted to Instagram explaining their wine, Diaz and Power mention making their wine “clean.” The problem is, there is no definition of that term, just as there is no official definition of “natural” wine. “Most wine is, essentially, just fermented grapes,” says Dave McIntyre, The Washington Post’s weekly wine writer. “And, really? In Los Angeles, they couldn’t find sustainable, organic, biodynamic or natural wines?” Some experts say this isn’t the first time they’ve heard of “clean” wines. “I’ve been in the industry for close to 30 years and this comes up periodically, just under different names… [like] ‘minimal intervention,'” says Dr. Creina Stockley, former Manager of Health and Regulatory Information at The Australian Wine Research Institute. “It’s a marketing exercise,” she adds.
Airlines Crack Down On Passengers Drinking Their Own Alcohol Onboard
To maintain social distancing between staff and passengers during the pandemic, airlines have minimized food and drink service and suspended the sale of alcohol on flights. Yet federal rules allow each passenger to bring a quart-size, zip-top bag full of 3.4 ounce containers of booze. Drinking that alcohol on board, however, is prohibited, and airlines have begun to crack down on passengers who do so. Southwest Airlines has seen such an increase in passengers drinking their own booze on board, it prompted the company to add a new line at the end of its in-flight safety announcements: “It is also prohibited to consume alcohol that you’ve brought.” American Airlines has experienced the same difficulties, according to Ross Feinstein, director of AA operations communications.
There is a loophole, however. Flight attendants are allowed to serve alcohol that passengers have carried on board, similar to wait staff uncorking and pouring a bottle of wine you have brought to a BYOB restaurant. While airlines are not required to serve you your own alcohol, standard in-flight practice varies among airlines. JetBlue allows BYOB, and American Airlines does not. Get the full story here at USA Today, or here at Business Insider.
Craft Distilleries Pivot Back To Booze After Making Hand Sanitizer
In the early stages of the coronavirus pandemic, hand sanitizer was flying off the shelves as hospitals, medical workers and profiteers bought out the supply. In response, the Food and Drug Administration temporarily eased regulations, allowing distillers and other companies to produce and sell the product. For distillers, making hand sanitizer made perfect sense, especially when sales of booze dropped as bars and restaurants closed. The equipment and proper licensing to handle ethanol were already acquired, leaving only the final steps of actually manufacturing and selling the product. To make hand sanitizer, Jonathan Eagan, a co-owner of the Arizona Distilling Company, spent $50,000 on alcohol this past spring. Shortly afterward, he says the company made enough money to cover two months of lost liquor sales. However, as panic-buying of the disinfectant subsided and larger companies stabilized production, “the business just kind of dried up” in the last few weeks, according to Eagan. Now, many distilleries that made the switch are going back to making booze. “It kept the lights on, it kept the guys working and employed when we were shut down for tours and tasting,” Barry Butler, owner of Tarpon Springs Distillery, said of producing sanitizer. But “as a long-term economic solution for a distillery, it’s not a way to make money,” he added.
Russia Considers Built-In Breathalyzers To Curb Drunk Driving
Russia is considering implementing breathalyzers in vehicles and encouraging manufacturers to install them before cars can hit the market. The industry ministry hopes to establish a plan by the end of 2020 to put an end to drunk driving, according to Kommersant newspaper. In the past decade, about 40,000 Russian drivers have died on the road as a result of drunk driving, a number high enough to prompt officials to push for alcohol interlocks. The interlocks require drivers to pass a breathalyzer test in order to start the ignition, but the added cost of installing them could be opposed by car manufacturers as the pandemic strains the industry.
More Than 1 Million Gallons Of Unsold French Wine Turned Into Hand Sanitizer
The Alsace wine industry has suffered considerable losses this year due to restaurant closures, reduced wine consumption, and a 25% tax on French wines imposed in ongoing the U.S.-European Union trade war. For Jérôme Mader, a 38-year-old winemaker who usually sends his top-rated Rieslings and Gewürztraminers to high-end restaurants and shops around the world, sales have dropped by 50% since December. Without space to stock his unsold wine, Mader is sending away 15% of his inventory to be distilled into ethyl alcohol to make hand sanitizer, a product that is selling briskly during the pandemic. The same is true for Marion Borès’s family business, Domaine Borès, which is sending 30% of its production (19,000 liters) away to a distillery to be converted into flavorless alcohol. In the Alsace region alone, over six million liters (1.5 million gallons) of perfectly delicious yet unsold wine will be distilled down to ethyl alcohol. Francis Backert, head of the Independent Winemakers Association of Alsace, reports that wholesale wine traders are seeing losses of 70% across the industry. In response, the French government is subsidizing the transfer of wine to distilleries for roughly 5,000 French winemakers in an aid effort dubbed “Crisis Distillation.” The last time the French government stepped in with a Crisis Distillation response was during the global economic collapse of 2009.
Filtering And Finishing Technology Modernizes The Spirits Industry
Next Century Spirits, a liquor technology start up, has introduced augmentations to traditional distilling techniques with a unique filtering and finishing method. “We use automation and predictive analytics to reduce the chaos, control flavor profiles, and scale precision quality control in the finishing process,” said Nick Scarff, Master Blender and vice president of business development. The company uses sensors, gas chromatography, and materials such as copper to detect chemical profiles, reduce risk, and more precisely determine flavor outcomes. “We can remove impurities or compounds like isopropanol, methanol, butyric acid, and certain sulfur-based chemicals using highly specialized, patented filtering, targeting even microscopic amounts,” said Scarff. “Even just a few parts per million of naturally occurring chemicals will completely change the aroma and flavor of the distillate.” The technology reduces the filtration process of distilling from days to hours, and it can maximize desirable flavor components such as vanillin, syringaldehyde, cinnemaldehyde, and whiskey lactones to create flavors such as vanilla, toasted oak, cinnamon, or coconut in the distilled spirit.
