Glass bottles move along a conveyor belt at the Jack Daniel’s Single Barrel Select Tennessee whiskey filling line at Jack Daniel’s Distillery in Lynchburg, Tennessee, USA, Thursday, January 30, 2014.
Luke Charrett | Bloomberg | Getty Images
From whiskey producers in the humble hills of Kentucky to winemakers on California’s sunny slopes, demand for glass bottles has exceeded supply this year, driven in part by the coronavirus pandemic.
The global supply chain – already long and tangled in the United States – continues to carry the burden of growing consumer demand, labor shortages and production delays overseas, leading to higher transport costs and inflation.
David Ozgo, chief economist at the Distilled Spirits Council, said the glass shortage is felt across the sector, whether it’s tequila, vodka or whiskey.
“Some large distillers, although they have multi-year contracts for millions of bottles, are finding that in some cases they have to choose what size of bottles they are going to get,” Ozgo said. This could ultimately lead to an even more limited supply of smaller bottles, as the emphasis is likely to be on the more popular 750 milliliters and 1.75 liters.
In the short term, some consumers may have to work harder to find their favorite drink.
“From a consumer perspective, if you need a special bottle for the holiday season, you may have to go back to the store several times before you find it,” Ozgo said. “But I’ll say this: there are over 16,000 alcohol-based products sold in any given year. So this could be an opportunity to try a new drink. “
The Castle & Key distillery in Frankfurt, Kentucky is among the many distilleries that have changed glass suppliers in the face of supply chain problems.
“The factory we worked with in the UK had a coronavirus outbreak and had to shut down completely, so our production was at least several months behind schedule,” said Jessica Peterson, the plant’s operating director.
Peterson said that when operations in the UK resumed, the distillery was forced to address supply chain issues and was therefore forced to temporarily switch to air travel due to delays associated with sea freight.
“Sea freight is generally the preferred method,” Peterson said, adding that shipping costs have tripled during the pandemic. The distillery has since been taken over by a supplier in Guadalajara, Mexico, who delivered orders by rail.
“After the transition, we had a steady supply of glass,” Peterson said.
“I have heard from other people that the demand for shipping containers has become so high that they are paying between $ 6,000 and $ 20,000 for a container alone. And it’s just crazy, ”she said.
Shipping containers are stacked in Port Miami after being unloaded from a boat on November 4, 2021 in Miami, Florida.
Joe Radl | Getty Images
To avoid future supply chain congestion, the distillery is no longer ordering six months in advance, but at least two years ahead of schedule, Peterson said. Nevertheless, according to her, due to disruptions in production, the distillery increased its cost.
“Currently, we have not missed a price increase for consumers. But it can definitely happen, ”she said.
New York-based supplier Waterloo Containers has raised imported glass prices for its customers. Most of Waterloo’s stock of glass bottles for wine and spirits comes from the United States, with about a tenth from outside the country. According to President and owner Bill Lutz, the price of locally produced glass rose to a lesser extent, mainly due to higher transportation and energy costs.
Waterloo’s import problems began about six months ago, Lutz said. However, with such a small share of imported glass, Waterloo’s orders have doubled this year as supply chain problems arose and wineries and distilleries began looking for new suppliers.
Waterloo is also a supplier of inventory, rather than a just-in-time model, so it always has additional inventory on hand.
“We have shipped more bottles here on the West Coast this year than in the last 20 years,” Lutz said.
Most of the glass bottles used in the United States come from outside the country. Several years ago, glassmakers moved production to countries where glass could be produced at a lower cost – mainly in Asia.
Mauricio Perez, regional director of Panamanian glass supplier BPS Glass in North America, estimated that 60% to 70% of glass bottles used in the U.S. came from China, at least prior to the Trump administration’s trade war. Import tariffs on glass from China have convinced some manufacturers to import glass from factories in Europe or Latin America to meet demand.
The pandemic then erupted, with waves of new cases followed by new blockages, causing problems in supply chains around the world.
For winemakers outside the United States, the problem is more serious. According to Perez, wine and spirits producers in Latin America are facing more severe shortages as some companies switched to glass from countries like Chile rather than China during the trade war.
This is a situation that is not easy to resolve. It can take a year or two to build glass furnaces or create new production lines.
“Glass shipments cannot return to the United States because the manufacturers no longer have glass capacity,” Lutz said.