COVID-19 has now reached most major cities and many countries around the world. With more than 722,000 people known to be infected and more than 33,900 deaths recorded globally, the coronavirus is continuing to wreak havoc on global health and the economy. Small businesses and global enterprises alike are suffering the effects, and those in the spirits industry are no exception.
In recent years the global distilled spirits sector has predicted an upward trajectory for market growth, but as fear continues to spread and countries around the world announce increasingly more stringent restrictions for both individuals and organisations, the long-term effects of the pandemic on spirit production and consumption are daunting, to say the least.
Numerous spirit producers are now being forced to revise their 2020 revenue forecasts as a result of the changing economic climate. Most recently, Diageo announced a potential £200 million loss of profit, attributing much of the shortfall to lower consumption levels in key Asian markets.
With China the largest spirit market in the world, it is clear that travel bans and the need for the general public to be quarantined in their homes has had a significant impact on the consumption and proliferation of distilled spirts – the consequences of these influences rippling across the entire supply chain.
Of course, the knock-on effects of the protective and preventative measures enforced to slow – if not stop – the spread of COVID-19, are not limited to China, as countries around the world step up their efforts to limit the damage caused by the virus. Without a clear end in sight, this leaves the full extent of the future consequences of the coronavirus outbreak on spirit producers unclear.
A Community Effort
However, despite the uncertain times, distilleries and spirit producers are actively involved in a number of international initiatives to prevent the further spread of the virus and to continue contributing to their communities in whatever ways they can.
Preventing the Spread
Unfortunately for many, this involved cancelling or postponing some of the most highly anticipated whisky events, tours, and festivals of 2020. Including, WhiskyFest Chicago, Big Smoke Meets WhiskyFest, Fèis Ìle, and Spirit of Speyside. In addition to this, distillery tours and visitor centres around the world have closed, most notably in the UK and Japan, while those that can remain open are taking all necessary precautions to protect both guests and staff.
Providing Essential Resources to Those on the Front Lines
In addition to suspending tours and events, numerous distilleries have sprung into action to support the efforts to restock the dwindling supplies of hand-sanitiser; an essential requirement for all frontline services.
Bacardi, Pernod-Ricard, and LVMH have all announced that they will be diverting production across multiple distilleries and/or production sites to produce Grain Neutral Spirit (GNS) to be used in the manufacturing of hand sanitizer.
Within the UK the Scotch Whisky Association (SWA) is supporting distilleries to refocus their production efforts to produce GNS by launching an online portal which will serve as a conduit between Scotch Whisky distillers, related industry suppliers and distribution partners and organisations seeking hand sanitiser. This portal is enabling the SWA to act as a clearinghouse for companies seeking the necessary guidance to begin production at scale or in the local community.
Similarly, the Alcohol and Tobacco Tax and Trade Bureau (TTB) waived the need for distilled spirits permit holders to obtain the authorisation to produce hand sanitizer or ethanol for its use in hand sanitiser. By lifting some of these restrictions American distilleries have been able to respond more quickly to the growing need for hand sanitiser within local communities and frontline services.
In addition to committing 267,000 gallons of hand sanitizer, Bacardi has pledged USD 3 million in financial aid to those within the industry directly affected by the suffering hospitality sector.
Working with other charitable and community foundations such as Another Round, Another Rally; the James Beard Foundation; Restaurant Workers’ Community Foundation; and Tales of the Cocktail Foundation, Bacardi Limited recently launched the #RaiseYourSpirits imitative to support bars and restaurants debilitated by the COVID-19 shutdown.
Similarly, Beam Suntory and Southern Glazer’s Wine & Spirits will donate USD 1 million to the United States Bartenders’ Guild (USBG) Foundation Emergency Assistance Program and the Restaurant Workers Community Foundation. These organisations are currently providing support to the bar and restaurant community and are providing financial aid and other resources for workers who are most impacted by COVID-19 as a result of restaurant and bar closures.
It is undeniable that the first few months of 2020 have been bleak, however, the quick reactions of distilleries around the globe are a positive light in these dark times. While the future remains uncertain, it is clear that those within the industry will do what they can to protect those who need it most and to ensure the future recovery of the market sector.
DRAMS is privileged to work with many prominent industry figures and is inspired by the positivity and community effort displayed by all our customers. During these difficult times, we’d like to reassure our customers that our customer care team are working tirelessly to ensure that all our services continue as normal and that everyone has the support they need to adjust to any new ways of working.
If you have any questions about DRAMS or our support services over the next few weeks, please don’t hesitate to reach out.