BevNet Spirits Newsletter 10/03/24
Where Creativity Meets the Glass.
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In This Issue
Welcome to BevNET’s spirits newsletter! This week we’ll be digging into how the port strike could impact spirits suppliers.
What insiders are reading: Check out how RTDs are doing on-premise and my colleague Lukas Southard’s look into how NA retailers keep customers coming back.
Thanks for reading.
-BevNET spirits editor, Ferron Salniker
What The Port Strike Means For Spirits
As thousands of dockworkers at East and Gulf Coast ports strike, major
trade gateways for goods coming in and out of the U.S. are cut off – and
that includes spirits.
Last year, 77% of U.S. distilled spirits exports and 43% of distilled
spirits imports passed through the ports that are impacted by the strike,
according to the Distilled Spirits Council of the U.S. (DISCUS). So what
does that mean for the industry? Possibly bottlenecked supply chains,
delayed product deliveries, product shortages, and bumped up shipping
costs.
For now, it’s a wait and see game. In terms of delays, it will take
approximately one week for beverage alcohol importers to recover from
a one-day strike, or four to six weeks to recover from a one-week strike,
and get operations “back to normal,” according to Serena Campbell,
operations director for USA Wine West, a company of bev-alc importer
and distributor MHW.
possibly more, as steamship lines may adjust the surcharge amounts
as the situation evolves,”
Serena Campbell, Operations Director for USA Wine West,
While steamship lines start to make bigger decisions around routing and diversions, expect congestion on the West Coast to ramp up quickly, and it’s unclear how much time can be gained by taking this route compared to just waiting out the strike on the other side of the country. Once ports reopen, companies should expect delays retrieving containers. As for financial strain, in the next several weeks, on top of peak-season surcharges already in place, emergency strike surcharges will be implemented.
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Bringing merchandise into the U.S. through the West Coast brings additional costs with uncertain results, and air cargo rates are
prohibitively expensive, she added. The potential delay of shipping out precious cargo could also be a blow to spirits exports just as they continue to rebuild after plummeting from the retaliatory tariffs on American Whiskey imposed from 2018 to 2021 by the EU and U.K. as part of the steel-aluminum trade dispute. U.S. spirits producers have been recapturing lost market share in their largest export markets, but DISCUS warned that the delays could be harmful for holiday sales. Some distillers may have already gotten
shipments under the wire. Sonat Birnecker Hart, president and founder of Koval Distillery in Chicago said they luckily shipped
everything for the holidays already.