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Whiskey Producers Are Making Hand Sanitizer. Here's How They Organized.

With loosened laws and a lot of experimentation, the industry has stepped up to fill a critical need.

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The world needs hand sanitizer — far more than the existing hand sanitizer industry can produce. So the American whiskey industry, along with other alcohol industries like craft breweries, have begun stepping up. They're hitting pause on making beverages, and have begun making the alcohol-based sanitizers that save lives.

Lexington Brewing & Distilling Co.

It's an important example of how entrepreneurs can pivot and contribute to the fight against Covid-19. And it contains important lessons for other entrepreneurs on how to do the same.

Lift regulations.

In a way, the American whiskey industry was already primed for this work. Back in 1941, after the attack on Pearl Harbor, the American government assumed control of the distilling industry and converted many of the stills to produce high-proof ethanol. This ethanol was used for antifreeze, munitions, octane boosters, lacquer, synthetic rubber and more.

Today, no government mandate was required — but government help was. When the COVID-19 crisis first hit, some of the smaller distilleries began trying to share their alcohol; any whiskey manufacturer will have parts of the distillate that can't be used in beverages but could become a general-purpose cleaner. However, laws stood in their way. Strict regulations control what can and can't happen in a distillery, and these businesses are heavily taxed. With these laws in place, the distilleries couldn't be helpful.

The industry started raising its voice, and policy-makers responded. Local, state and even federal laws were lifted or altered. On March 18, the Alcohol and Tobacco Tax and Trade Bureau, which oversees the industry, also cleared a path: It waived parts of a law, including requirements that distilleries obtain permits or bonds to produce hand sanitizer.

Now distilleries could finally get to work.

Create many different solutions.

Each distillery has taken a somewhat different path. Some distilleries chose to make sanitizing products, and then provide them for free to first responders and critical facilities and businesses. Others have chosen to sell their sanitizing products to the public, as a way to keep their staffs paid.

In Kentucky, the response from the bourbon industry has been swift and decisive. Brown-Forman, one of the largest American-owned spirits manufacturers, started delivering free sanitizer to first responders in Woodford County, the location of its Woodford Reserve distillery. (Its Old Forester Distillery in Louisville, Kentucky will follow suit.) The Neeley Family Distillery is making small batches of hand sanitizer and allowing people to bring their own bottles to fill up for a donation to cover the costs. Lexington Brewing & Distilling, Rabbit Hole Distillery and Wilderness Trail Distillery have all announced efforts to produce hand sanitizer as well.

Outside of Kentucky, many small distilleries are doing the same — including Smooth Ambler in West Virginia, Koval Distillery in Chicago, Corsair Distillery in Tennessee, American Craft Whiskey Distillery in California and Whisky Acres Distilling in Illinois.

Share information among competitors.

But there's a problem: Just because a distiller can make whiskey, that doesn't mean they know how to make alcohol for hand sanitizer. To make it work, the industry has come together to share information — producing webinars, online guides, and more. Distilleries are modifying their equipment and learning on the fly.

At Catoctin Creek Distillery in Virginia, Distiller Becky Harris says she's working closely with the American Craft Spirits Association (ASCA), with daily meetings to devise the best possible course of action for distillers wanting to produce hand sanitizer. At one point, her husband and business partner, Scott Harris, was receiving 50 emails every hour from people asking about hand sanitizer. She says the media attention on this topic has been helpful, because it has shown regulatory bodies there is a huge surge in demand for these products, which in turn enabled the ASCA to streamline and expedite the process of building guidelines and finding supply in the supply chain.

As the situation evolves, distilleries are also having to change their plans. In Michigan, for example, the Traverse City Whiskey Company originally wanted to sell hand sanitizer to the public — but then its inventory of 10,000 units sold out overnight. "The response and demand has been shocking," says Chris Fredrickson, the company's co-founder. "Because of this, we've evolved our strategy from retail to include medical and first responders, as that has been the greatest need."

What will come next? Nobody knows, of course — but more distilleries join the effort to produce hand sanitizer, and owners say they'll look for even more ways to band together and support people in the industry. "I would say that whiskey drinkers are the most generous people on the planet," says Bill Thomas, owner of the Jack Rose Dining Saloon in Washington D.C., who I spoke with recently for American Whiskey Magazine. "And this is absolutely proof that the whiskey drinker is the best kind of human being on the planet."

It's also a lesson for other industries during this difficult time: With loosening regulations, you can collaborate with your peers on new innovations ... and start solving any problem you can.

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