As we continue to weather the COVID-19 storm, many liquor manufacturers are pivoting their businesses to answer the worldwide demand for hand sanitizer.
That's why Jason Barrett and his team at Black Button Distilling have revamped their entire production line over the past couple of months, and are now churning out hand sanitizer instead of its signature bourbons, ryes, and gins, for the likes of nursing homes, food manufacturers and distributors, trucking companies, military installations, the U.S. Postal Service, and field hospitals.
And churning is the operative word: Prior to the pandemic, Black Button was growing at a healthy double-digit clip, making about 4,000 bottles of craft spirits a week. Today, the distillery, which employs more than 80 people, is producing a whopping 70,000 (same size) bottles of FDA-standard hand sanitizer a week. For now, Black Button Distilling's entire operation has shifted to this other kind of miracle tonic.
While Black Button is not the only distillery that has made such a move, the production, sales, and distribution network it has built, virtually overnight, is impressive. As you might imagine, nursing homes and trucking companies weren't exactly core markets for a liquor manufacturer pre-COVID-19 and the company had to learn quickly.
We recently caught up with Barrett, to discuss how he made such a bold pivot, what it took to rally his team, and why demand shows no signs of slowing down.
So I take it 2020 has wound up a little different than you expected.
It's totally changed our world. Normally, we would plan our production 90 days out, run that through the plant, stick it in the warehouse. Now, some of the supplies show up once or twice a day and sanitizer is being shipped out a few hours after it's made. It's an ever-changing process, a totally different set of customers and customer-relationship management than we normally deal with. In the first five weeks, we had 800 new accounts. It's truly been a world-class effort by our team, keeping everything moving.
Your team has obviously answered the call in a big way. How are they handling this new normal?
I think the word that sums it up best is determined. Determined that we're going to make it through this as a group, determined that we're going to do better today than we did the day before. We just ask everybody to do their best. Shifts are running about 20 hours a day, six days a week now.
Of course, this team is something you've built over the past eight years, without knowing a pandemic was coming. Did that help you get up and running so quickly?
It's the relationships we've built with our team members over these years. We trust our department heads to be the experts in their fields and we're able to come together to reach these goals. There's no way one single person that could've coordinated this. It's really a testament to Black Button's culture of independent professionals.
In addition to toilet paper, hand sanitizer is probably the most in-demand product in the world right now. As a company, how do you go about pricing something like this, when you're also trying to be part of a broader war effort?
When we did the original cost accounting that first week, we picked our prices as a breakeven, in a desire to help the community. As we've continued to expand the quantities, we've developed some efficiencies. Just to keep everyone on the same page, we kept the original pricing. That pricing we originally picked is very competitive with the market pre-COVID as well as what we're seeing now. Any money we've been making on it, we've been investing in new equipment, overtime, a logistics company.
Speaking of, what about liquor? That is, you know, the business you're actually in.
We had quite a bit of inventory in our warehouse before all this, so that's helped fill demand while we switch to making hand sanitizer. In the next few weeks, we're hoping we'll be able to make liquor on Saturdays.
We want to keep the liquor we sell top of mind. Although liquor sales as a whole are up 40 percent, craft spirits are not sharing that same rise. We're keeping an eye on our regular business, so we have a business to go back to.
Will we eventually have enough hand sanitizer?
We are hearing from customers, and they are being told by regular suppliers that they will not be able to get regular deliveries of hand sanitizer this year. Those distributors are forecasting there will be a shortage through the end of the year, and we actually expect, as communities start to open back up, there will be even more need for sanitizer because people are moving around more and trying to stay clean.
What's your advice to other entrepreneurs during this time?
Entrepreneurs should try to inspire their teams. IWe're 83 people rowing together in the same boat, and if we're all rowing the same way, we can go pretty fast.
You're a craft spirits distiller now packaging hand sanitizer, in plastic bottles intended for coffee creamer, amid a global pandemic. When you stop and think about it, is this all a little surreal?
I think surreal is the right word for it. Mostly, I'm astounded and so proud of what our team has done. I give credit to all the craft distilleries that have pivoted to making hand sanitizer. That's a testament to all the people in the company, our sales reps that bring in the orders; our accounting team that had to keep track of all the incoming and outgoing invoicing, while also keeping the supplies and trucking coordinated; our marketing team getting the word out; our production team, the folks on the ground in the plant actually batching and bottling.
As I now ask all entrepreneurs that I meet these days, forget being a business owner for a minute. How are you doing, just as a person?
Everybody probably has a slightly different take on that. For me personally, being busy helps. It gives me something to do instead of sitting around and fretting. In the eight years I've been running this company, I only lost maybe two nights of sleep prior to this. I'm not sleeping well now. There doesn't seem to be anything bothering me particularly, but I'll wake up and can't fall back asleep. So that gives me time to get a lot of things done.
My wife and I are expecting our first child in August. There's a lot to wonder about when you're bringing your first child into a world that's turning upside down, but we're blessed with a strong family, strong coworkers. We're in a good position, so we're very thankful for where we find ourselves in this. it really is hard to bring it all together when you don't know what the future will hold. Entrepreneurs are people who like to plan.
Image Credit: Courtesy of Black Button Distilling.