As old sanitizer products collect dust, Reno-Sparks distilleries hope for revenue rebound

Ferino Distillery, which specializes in making its Cannella Cinnamon Cordial (seen far left), is stuck with thousands of excess bottles of sanitizer leftover from the pandemic’s early stages last year.

Ferino Distillery, which specializes in making its Cannella Cinnamon Cordial (seen far left), is stuck with thousands of excess bottles of sanitizer leftover from the pandemic’s early stages last year. Courtesy Photo

By Kaleb Roedel

Tuesday, June 29, 2021


Ferino Distillery has an area inside its facility where thousands of bottles of a particular product have been collecting dust for months.

It’s a product the Reno business made at a rapid click last spring before, months later, demand dried up. It’s 300 gallons worth of hand sanitizer, and Ferino Distillery owner Joe Cannella is trying to get it off his hands.

“We’ve got about 5,000 bottles,” said Cannella, whose inventory includes a mix of 4-ounce squeeze bottles, 40-ounce spray bottles and 60-ounce refill jugs. “My only option at this point would be to basically sell it at a loss — I could get it out the door, but I’d have to sell it for pennies compared to what we made it for. And that’s something I’m interested in doing probably in the near future just to get something.”

Like many regional distilleries, Cannella’s company — which specializes in an Italian-inspired cinnamon cordial, a sweet and spicy liqueur made with brandy — stopped making spirits and started pumping out much-needed hand sanitizer for the first wave of the coronavirus outbreak.

Launched on Reno’s Fourth Street in November 2019, Ferino had been operating for only a few months before it stepped up to make the product.

Ferino’s sanitizer production, Cannella said, was a longer and pricier process compared to other distilleries that pivoted to making disinfectant liquid.

“Whereas some distilleries were sitting on a bunch of ethanol that they could make into sanitizer right away, we didn’t have a ready supply of 190-proof ethanol,” Cannella said. “Ours was a little bit more of a laborious process, and a much more costly endeavor in terms of procuring the base materials. But we went for it.”

A CRUEL IRONY

Ferino had to purchase about 7,000 pounds of dextrose — pure sugar — from The Reno Homebrewer located next door to its facility. The staff fermented the dextrose into alcohol before eventually turning it into sanitizer that met World Health Organization standards.

“Instead of being able to make hand sanitizer over a matter of one to two weeks, it took us about four to five weeks,” Cannella said. “The toughest part of all was that we had no opportunity to supply the demand at the very beginning. We were telling a lot of people ‘we’re trying, we’re trying … maybe next week, maybe next week.’”

Eventually, Ferino began bottling and labeling sanitizer, selling it to local businesses and residents while holding off on producing spirits amid COVID restrictions.

“This presented as both a responsibility to help serve the community and also a way for us to pay our bills,” Cannella said. “We had no idea how anyone would respond in terms of our ability to pay debts and be responsible as a business, so it was a very challenging time to be a distillery.”

By mid-summer, Ferino stopped making sanitizer as demand plummeted and big brands like Purrell returned to stores.

The distillery has barely sold any since, and Cannella says many regional distillery owners are in the same boat.

“But you knew that was part of the deal going in,” Cannella said. “People wanted it and people needed it, but you knew there was always a chance you were going to be sitting on a mountain of inventory. I think, in the scheme of things, there are other folks that are doing even worse than that.”

It was a cruel irony for spirit-makers: Between March and mid-July 2020, booze sales boomed online, according to Nielsen data. Yet, craft distilleries couldn’t fully benefit from that spike in demand at the peak of COVID due to being unable to make their spirits and having their hands full making sanitizer.

In this April 2020 photo, boxes of hand sanitizer are wrapped up and ready to be shipped from Seven Troughs Distilling Co. in Sparks.

 

‘A TOUGH BALANCE’

Last spring, Sparks-based Seven Troughs Distilling teamed up with The Depot and Forsaken River to make “several thousand gallons” of sanitation-grade ethanol, said Tom Adams, owner of Seven Troughs.

The ethanol, he said, was provided to Sparks-based Damon Industries — primarily a producer of juice and beverage products — which turned it into hand sanitizer. Damon and each distiller involved then sold the disinfectant from their facilities early in the pandemic.

Adams said the ethanol it produced was also used by local hospitals and the Nevada National Guard to disinfect surfaces at hospitals and COVID testing sites.

“We wanted to do what we could,” Adams said. “It certainly illuminated a supply chain hole we have nationally and locally.”

From late March to August last year, Seven Troughs worked long days and nights manufacturing ethanol, without making a drop of its own spirits, Adams said. He added that the first “few rounds” of ethanol were donations to the community before Washoe County Emergency Management began buying its disinfecting liquid.

“There were two things going on,” Adams said. “It’s a different product than we would normally make, and then also we had an instantaneous loss of cash flow. So, it was a tough balance through the summertime to make sure that we could keep our staff paid and at the same time continue to manufacture product.”

Once Seven Troughs returned to making spirits last September, it could only make so much of its bourbon, gin, whiskey and rum. The distillery’s cash reserves were sparse, and the supply chain was snarled, said Adams, noting glass bottles and toppers were hard to come by.

“We’re still trying to come back from that and produce like we were in February of 2020,” said Adams, noting Seven Troughs’ production and revenue are both down about 50% from pre-pandemic levels. “With most bars and restaurants closed for a long time, they’re finally coming back to getting comfortable ordering our products back in.”

To that end, Seven Troughs is seeing business from its speakeasy bar in The Basement in Downtown Reno come back to life, said Adams, adding: “There’s obviously a lot of pent-up demand and people wanting to get out and enjoy what Reno has to offer.”

GROWING PAINS

The same can’t be said for foot traffic coming into Seven Troughs for its tasting room and distillery tours, which Adams said is driven by visitors to greater Reno-Sparks.

“It’s just absolutely dead — tourism isn’t back yet,” Adams said. “We’re still kind of figuring out how to recover correctly and properly. We’ve got to get our fingers firmly around the idea of how we can best expend limited funds as we grow back and recover from the pandemic.

“How we can try to fund a little bit of growth and continue to responsibly manage our day-to-day business … that’s a challenge right now.”

Ferino’s growth plans were also shaken by the pandemic. The distillery has a large cocktail bar it expected to be a moneymaker in 2020 to fund its production and distribution expansion. Those plans were shelved last year.

Only in recent weeks, with bars at full capacity, is Ferino seeing more customers — not only to drink at the bar, but also do tours and tastings, Cannella said. The distillery has also begun to book its space for parties and events.

On the production side, Cannella said they are crafting new products, including a single-origin coffee liqueur called “Corretto” that it created in partnership with local business Coffeebar.

“We have a lot of plans for launching new products this year, and it seems like people are really excited to have a good reason to go out,” he said. “Things are looking up.”

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