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‘That’s what we all deal with all day every day’: Distilleries shift alcohol production from liquor to hand sanitizer

Distilleries had to get certified as over-the-counter drug manufacturers by the Food and Drug Administration first.

Children and teens being treated at the National Institutes of Health are getting hand sanitizer from businesses they wouldn’t be patrons of otherwise: Washington, D.C.’s distilleries. But first, federal regulators had to clarify some rules.

Stephanie Feinberg, the resident services operations manager for the Children’s Inn, a nonprofit on the National Institutes of Health campus in D.C. that provides housing to children and teens undergoing medical treatment as part of clinical trials at NIH, told Zenger News running out of hand sanitizer would be devastating.

“[These kids] have mysterious diseases and are undiagnosed, and many are immunocompromised, so having hand sanitizer in our building is important at all times for us,” she said.

The Cotton & Reed Distillery produces rum in Washington DC on February 7, 2019. (Photo Courtesy: Cotton & Reed Distillery)

A week or two before the coronavirus hit the U.S., Feinberg visited the Cotton & Reed distillery for the first time. After the virus hit, the Children’s Inn couldn’t get it from their usual vendor, Amazon, but Feinberg’s sister recommended she reach out to a local distillery. She called Cotton & Reed first.

“We asked Cotton & Reed, are you by any chance donating hand sanitizer, and they responded right away and said absolutely please send us an email,” Feinberg said. “They’ve been so supportive. We got the donation from them and also in addition to making sure we had enough on hand, we purchased six gallons. They came and delivered it and a staff member who delivered it called himself the ‘Santi-Claus’.”

Cotton & Reed co-founder Jordan Cotton told Zenger News they started making hand sanitizer about a week before D.C. required bars and restaurants to close.

“Probably every distillery around the country had the same idea about the same time,” he said. “There’s a hand sanitizer shortage, and the active ingredient is alcohol and that’s what we all deal with all day every day. We have the inventory, equipment and the knowledge to brew up high-proof alcohol content [for hand sanitizer].”

Cotton & Reed’s core market “disappeared in a puff of smoke,” because of the coronavirus shutdown, Cotton said, so making hand sanitizer seemed like a natural way to help the local community and to keep the distillery afloat.

“We’ve sold to a variety of part to the military, part of NIH, federal agencies, a lot of construction companies that are generally still operating, a lot of apartment buildings for people working the front desk, some delivery drivers that are all still out working, Amazon warehouse because they are still running deliveries, the police department, the city government, fire and EMS, some hospice, the Navy, Army Corps of Engineers, it’s pretty all over the place,” Cotton said. “We donate some as well, and that’s gone to a lot of homeless shelters and soup kitchens.”

At first, regulations surrounding hand sanitizer production confounded Cotton & Reed and other local distilleries, like One Eight Distilling.

The Food and Drug Administration, World Health Organization and the Centers for Disease Control each had different requirements for the alcohol content in hand sanitizer.

At first, WHO said hand sanitizer needed at least 70% alcohol, the CDC said at least 60%, and then the FDA said hand sanitizer needed at least 80% alcohol.

One Eight Distilling co-founder and CEO Sandy Wood poses for a portrait on October 26, 2018. (Photo Courtesy: One Eight Distilling)

“We made an initial batch with our own spirits that met the WHO guidelines and then registered as an FDA-approved company as well, and figured out the FDA guidelines for making hand sanitizer and went through the bureaucratic process,” One Eight Distilling co-founder and CEO Sandy Wood told Zenger News. “It was a process of about three weeks or so.”

Cotton said trying that first week of the D.C. shutdown was “very confusing” as distilleries tried to navigate the regulatory landscape for making hand sanitizer, considered an over-the-counter drug. The FDA announced all distilleries had to get approval and use a specific recipe.

Both Cotton & Reed and One Eight Distilling used their own spirits to make hand sanitizer at first, but demand ticked too highto keep up. Their main customers are the local government, first responders, nonprofits, local businesses with essential workers and health workers.

“We started out by using high proof alcohol that for some reason or another wasn’t suitable for our core products, but as demand ramped up, our customers are local government, local businesses who need it for their employees, healthcare and nonprofit,” Cotton said. “As that went through the roof we realized we were not going to make alcohol fast enough to meet demand. Like a bunch of other distilleries, we started ordering bulk ethanol to turn into hand sanitizer. It’s required us to learn a whole lot of new stuff, we’re working with chemicals we don’t normally use, a whole new set of regulations from the FDA.”

Founding Farmers’ distillery, Founding Spirits, sent 150 gallons from their first batch of hand sanitizer to the D.C. Children’s Hospital because “they really needed it,” said Founding Farmers Director of Catering and Special Events Hillary Miko.

“For our next batch, which will be 5,000 gallons, we’re starting to reach out to first responders and hospital partners just to double check to make sure they have everything they need, and then private businesses,” said Miko. “There are a lot of businesses that have essential workers that need to go out so we want to make sure they have what they need. We have a charitable donation of about 100 gallons that will go to D.C. first responders tomorrow.”

Because all of its restaurants are closed, Founding Farmers turned four of its locations into grocery delivery and pickup locations for D.C. residents. Residents can also buy Founding Farmers’ hand sanitizer at any of those.

“As we roll out each batch of hand sanitizer we allocate some of it to be sold on the market and some to be sold in bulk,” Miko said.

For Cotton & Reed, Founding Farmers and One Eight Distilling, making hand sanitizer is one way to stay in business while hundreds of businesses inside the beltway close their doors.

“Our sales are majorly down,” Wood said. “Our normal retail operations would be the tasting room, and a lot of that is actually cocktail sales, and that business is completely shut down. While we still are getting customers in to buy bottles [of liquor], we went from having 200-300 people come in every weekend to 40-50 people come in during the week to pick up bottles. The tasting room, especially for relatively small distilleries, is often a substantial portion of the revenue. On the wholesale side, liquor going out to restaurants and grocery stores, saw an uptick for for a while but then leveled off. We had to lay off three employees, we have a lot of part-time employees who worked the tasting room who aren’t getting any hours. Basically what’s keeping us afloat is hand sanitizer.”

The Cotton & Reed Distillery produces rum in Washington DC on March 21, 2019. (Photo Courtesy: Cotton & Reed Distillery)

At Cotton & Reed, business “ground to a halt” at first and Cotton said he had to furlough most of his employees, then when they started making hand sanitizer, sales jumped to about 30-40% of a normal week’s tasting room sales. Now, all the full-time employees are working, part-time workers are getting more hours than they used to, and Cotton wants to hire someone new to help with sales.

“We are essentially functioning as a liquor store and over-the-counter drug manufacturer,” Cotton said.

One challenge all the distilleries face is packaging for hand sanitizer.

“The demands on the supply chain have gone crazy, so things like bottles and everything from little 50 ml airplane bottles, whether glass or plastic, all the way up to one gallon or five-gallon jugs, everything has shortages or long lead times,” Wood said. “So we initially had a supply of those little airplane mini bottles and we’re giving those out for free with liquor purchases, but it’s almost impossible to get more in a reasonable time frame. So we managed to get some 4 oz squeeze containers that people use for ketchup in restaurants, and we’re now selling those. It’s really tricky to find where the stuff is and time purchases and make sure you get enough but not too many.”

Despite the challenges and the uncertain business environment, groups like the Children’s Inn see distilleries’ pivot to producing hand sanitizer as a lifesaver.

“It’s definitely one of the most essential things we have in our building,” Feinberg said. “We are really thankful.”

(Editing by Allison Elyse Gualtieri)