From illicit bathtub gin brewed during Prohibition to modern-day distillers honing their craft, alcohol has always been in business in America. Today’s distilling industry looks vastly different from it did a hundred years ago, but distillers still need to get their spirits to buyers, making logistics a critical part of the distilling business.
We connected with John Foster, Distillery Partnerships Lead at the American Distilling Institute (ADI), to talk about the value of sound supply chain practices for distilling operations and why partnering with a 3PL can be the key to success amidst changing market conditions.
Logistics from bottle to buyer
As the oldest and largest trade association for craft distilling in the world, ADI provides information and education to American distillers of all sizes. John helps growing distillers access the resources they need to reach their goals. After working closely with distillers and co-founding a distillery of his own, John knows that logistics planning is something that can’t be overlooked.
“They say nothing happens until you sell something. All right, but after you make a sale, someone has to transport your product to the buyer. Hardly anybody has the capacity to consider moving their own product around. There are a lot of landmines in shipping that a good logistics company can help you navigate.”
The supply chain, that critical link between seller and buyer, involves a lot more than just putting crates on a truck. The transportation of alcohol is heavily regulated by the government, and the rules change based on the type and quantity of alcohol a distiller ships. Limits to how much alcohol can be shipped at once vary from state to state, and crossing state lines with alcohol requires state-specific permits. Bulk alcohol is subject to its own set of transportation regulations, and high-proof alcohol requires hazmat certifications to ship.
A determined distiller can take the time to learn the ins and outs of shipping alcohol, but still must find carriers with the correct permits and plan complex routes between suppliers, storage facilities, and distribution centers. All of this comes at the cost of the distiller’s time, which, John warns, isn’t cheap.
“As a distiller, your time is valuable. Instead of dealing with day-to-day logistics details, you’re better off making the mash, getting those flavors right, and honing your marketing. Let somebody else do the heavy lifting when it comes to logistics.”
3PLs, the heavy lifters
Choosing the right logistics partner will make a big difference for distillers that want to focus more on their spirits and worry less about the rest. A quality 3PL can stand in as a fully outsourced shipping and logistics team for a distiller, identifying potential issues and inventing solutions before they become real problems. This includes project management, nailing time sensitive deliveries, and finding the most budget-efficient way to make complex shipments.
One of Shaker’s distillery customers needed to ship several cases of vodka from its distillery in New York to a private party in California. State alcohol laws and truck weight limits prohibit shipping a full truckload of alcohol continuously across state lines. Splitting the cases of vodka across several trucks would be cost-prohibitive and potentially delay the shipment, as each truck and driver would have to obtain specific permits for every state they drive through.
After further strategic planning and research into regulations, Shaker determined that shipping LTL (less-than-truckload) would be the most efficient and cost-effective option for this distiller. Shaker arranged everything with the carriers and monitored the shipment from pickup to delivery. Our customer also had access to real-time tracking information on the shipment through our LTL portal. The vodka arrived in time for the party, and the distiller had another satisfied client.
Solutions-oriented logistics partners can help distillers steer towards success by proactively problem-solving and collaborating with distillers to better understand their supply chain goals. When markets grow uncertain and operations change to keep pace, the support of a 3PL can be indispensable.
The state of the spirit union
The current economic uncertainty caused by international trade negotiations is making it harder for distillers to confidently build their supply chain plans. Suppliers are doing their best to soften the blow of potential trade barriers by shipping ahead of proposed policy deadlines, but this solution creates another challenge. Distillers are stocking up on barrels, bottles, and corks, and need a place to store this excess inventory. A logistics partner can help distillers find a warehouse strategically located near the distillery, as well as provide transportation services between facilities.
Distilling companies aren’t the only ones trying to get ahead of tariffs; virtually every manufacturer in America has been importing additional inventory ahead of the ever-shifting policy deadlines. When this happens, freight volumes spike and truck capacity crunches to meet the rise in demand. Distillers handling their own logistics are at risk of losing some capacity as carriers chase after other freight. Partnering with a 3PL can mitigate this risk, because the distiller gains access to the 3PLs carrier network for a wider pool of coverage during any market conditions.
As distillers stock up to weather a potential tariff storm, John says they’re also keeping their eyes on a “market correction” among consumers.
“People who drank during the pandemic aren’t drinking anymore. Older consumers are starting to slow their alcohol consumption down, and Gen Z is drinking less than other generations did before. On top of this, THC products are more readily accessible and used as an alternative to drinking. Overall, people are buying less alcohol right now.”
Though consumer demand is down, John advises distillers not to be too concerned: “We have a rich history of enjoying a good pour here in America, and I don’t think that’s ever going to go away.”
As with any business, the current market conditions shouldn’t deter distillers from planning for the future. Supply chain planning now leads to success later, especially when a business has a reliable logistics partner to help it.
3 tips for supply chain success
John’s tips to distillers looking for ways to elevate their business
Focus your energy on the spirit, not the shipping bill.
“The quality of your product is what matters most to your brand. Refine your flavors, have a whiskey dinner, just focus on the craft. Everybody is trying to save all the money that they can, but it’s not just a financial equation where the cheapest truck wins. Your customers can’t taste the hours you spend on the phone trying to get a truck for $100 less, so leave that to someone else.”
Special products need specialty logistics.
“The last thing any of us wants to do is work our tails off to make a great spirit, then put it on the back of a truck that doesn’t get to where we promised it would be in a timely manner. Some things just need special handling, and you need someone reliable for that.”
A good 3PL is a partner, not just a contractor.
“Hire somebody you’re willing to trust and build a relationship with them. It’s okay to put all your eggs in one basket if it’s a damn good basket.”
Shaker Logistics has built the team, network, and systems to be the best basket for your alcohol shipping needs. Reach out to Shaker today to partner with a team that knows your business and knows how to handle your spirits with care.