Alcohol shortage impacting Virginia ABC, but to what extent?

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RICHMOND, Va. (WRIC) – ABC stores in Virginia are feeling the effects of an alcohol shortage affecting several other states across the country due to supply chain and delivery issues coinciding with the coronavirus pandemic.

According to spokesperson Taylor Thornberg, as of Oct. 15, 169 of the 5,287 products sold by Virginia ABC were completely out of stock. While this only accounts for about 3% of the agency’s inventory, there are concerns that supply could become even more strained as the holiday season approaches.

“We work from January to September, preparing for October, November, December,” said local distiller David Cuttino. “You do most of your work during those three months.”

Cuttino is the co-founder of Reservoir Distillery in Scott’s Addition. He said that while Reservoir is not yet completely short of anything, there have been some tight calls.

“The reservoir hasn’t reached a point where we’re running out of product. Now some of our local peers here in the state have had difficulty finding and locating bottles of different sizes to put their spirits on, ”Cuttino said. “We managed to keep control and stay ahead. [But that] does not mean that we have not had some circumstances where we received bottles just in time.

Cuttino said the problem is not a literal shortage of alcohol and spirits, but rather a challenge of finding bottles to put the alcohol in, as well as containers in which to ship it.

“It’s different from what it was before,” he said. “It’s a little more tense and it’s a little more just on time, and that’s going to drive the logistics people crazy. “

According to Thornberg, since the pandemic began in March 2020, the highest number of out-of-stock products at Virginia ABC was 250 in January 2021 and the lowest was 55 in April 2020. She said the bottles , raw materials, vehicles to transport the products, and truck drivers are scarce, prompting many ABC suppliers to look for other container options in an attempt to quickly resolve this situation.

Unprecedented consumer consumption is also contributing to Virginia’s alcohol shortage.

This graph shows the number of out-of-stock products at ABC stores across Virginia. (Courtesy: Virginia ABC)

“Consumer consumption trends have exceeded expected growth and historical trends,” Thornberg said. “Many of our suppliers say so. We have personally seen the volatility in sales since the start of the pandemic in March 2020, and so that includes – our sales increased 13.6% in fiscal 2021 compared to fiscal 2020. ”

Additionally, Thornberg said there had been traffic jams at some of the major US ports, causing import safeguards, such as cognac, scotch, gin, vodka and Irish whiskey. She said customers may also see tequila shortages at ABC stores, but this is more due to the difficulty in securing glass containers and plastic cases.

“Our suppliers have indicated that if these current sales trends continue – I mean, they’re trying to keep up, obviously, and trying to anticipate expected sales growth,” Thornberg said. “But they’re probably hoping that maybe that will be fixed or fixed by mid-2022.”

Thornberg said that while the out-of-stock issue is largely the result of external supply chain issues, some of the shortages in stores are due to adjustments made during the transition to the new distribution center of ABC in Hanover County. Throughout September, ABC shipped products to stores from the new Hanover County distribution center and the Richmond warehouse. This caused a delay in shipments to some stores. At the beginning of October, ABC started shipping only from the new, highly automated distribution center in Hanover.

Cuttino, who works closely with Virginia ABC, said the agency is doing everything possible to ensure shelves are stocked, especially before the holiday season.

“Alarm bells start ringing if it gets too tight,” he said. “Going through the holidays this year, yes it’s going to be tight, and I think where you’re really going to see a lot of pain is just in the cost of logistics, especially when everyone wants to get things shipped. Making direct-to-consumer sales has been a big part of the business for every distiller in the state this year because of the pandemic, and now all of a sudden, with all these costs popping up, it’s a little difficult and it will hurt your sales when, to ship a single bottle, it will cost $ 20 to $ 30.

Cuttino said that as US manufacturers resume operations, the problem has shifted from inability to get products to significant delay.

“The demand has remained very strong, and so as long as we continue to sell at the rate we are at, the money that comes in is reinvested in the business,” Cuttino said. “For us that means working with our suppliers and getting ahead, and we will continue to do so until we see some of the pressure ease on the system.”

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