Spirited Virginia Q2 2022 - 42

250 products out of stock. By the end
of 2021, nearly 185 products were still
out of stock.
Several factors have contributed to
the product shortages.
Global Supply Chain. Widespread
disruptions in the supply chain have
impacted consumer products in retail
stores throughout the world. Distilled
spirits are no exception. Examining
the causes is like watching a long line
of dominos-one falling piece hits another,
which knocks over another and
on down the line.
Workers across the spectrum, including
truck drivers, have been swept
up in pandemic problems. They have
faced quarantine, illness, childcare challenges
and more. Without an adequate
workforce, producers can't keep up with
demand and can't get products to other
producers, who in turn face a shortage
of materials.
Shipment delays and congestion at
major U.S. ports, especially Los Angeles,
Long Beach and New York, have impacted
the supply of imported raw materials
and liquors, including cognac, Scotch
whisky, Irish whiskey, gin and vodka.
Challenges in the trucking industry
impact suppliers, too. There aren't
enough trucks available to carry waiting
freight, but semiconductor shortages
are causing delays in new truck production.
Port slowdowns have hampered
container turnaround times. A shortage
of vehicles and drivers to transport
products impacts distillers from both
sides-in getting supplies and in shipping
their spirits.
In the alcohol industry specifically,
distillers have faced challenges in procuring
raw materials, such as malted
barley from overseas maltsters and
packaging supplies, including bottles.
In January 2022, Chris Richeson of
Chesapeake Bay Distillery in Virginia
Beach told The Virginian-Pilot, " We can't
make any of our flagship products. We
have no bottles. We placed an order in
July and have yet to receive it. Later,
we placed an order for bottles from
a producer here in Virginia and were
supposed to get them in November or
December, but the date was pushed
again, " he explains. " Now, they say another
three months! "
" We heard about the glass situation
FIVE THINGS YOU SHOULD KNOW
About ABC's New Protocol for Limited Availability
 In February 2022, Virginia ABC updated the ability to view online
inventory for limited availability products to coincide with the time
stores are open.
 Previously, this inventory was accessible in the hours prior to stores
opening, which inadvertently allowed product re-sellers with the
means to quickly mobilize an opportunity to purchase these items
before other customers.
 To level the playing field, ABC decided to delay the display of the
limited availability, one per customer products until stores open at
noon.
 The actual inventory of these items in stores has not changed and will
continue to be searchable on ABC's website, the only change is the time
the store inventory is searchable.
 Additionally, external, non-ABC apps designed to automatically display
live ABC inventory will not display these products outside of store
operating hours.
last year and were able to lay in a year's
supply, " Stephen King, owner of Ironclad
Distillery in Newport News, told the
newspaper. " But there is a shortage of
corks now and even of paper that labels
are made out of. "
American whiskey makers are grappling
with supply constraints, trucking
shortages and other logistical issues,
says Market Watch magazine. " We've
taken extensive measures to reinforce
material supply, increase production
capacity and prioritize production of
our top-selling products, " Sue Perram,
Brown-Forman director of investor relations,
told Market Watch.
Consumer Demand. The demand
side of the equation has offered its own
set of challenges.
Consumer taste in alcohol is always
changing, as is the amount of alcohol
that consumers purchase. Producers
and suppliers make decisions based on
best predictions for the future, but the
reality may not match their crystal balls.
Recently, for example, consumer
consumption trends have outpaced forecasted
growth and historical trends.
Since the beginning of the pandemic,
Virginia ABC has seen volatility in sales,
making predictions even more challenging.
Sales grew 13.6% in fiscal year
2021 (at $1.4 billion), up from fiscal
year 2020 ($1.2 billion). The contrast
between 2021 and 2019 is even more
pronounced: sales were 26.6% higher
42 SPIRITED VIRGINIA
Spirited Virginia Q2 2022

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