‘The market is saturated’: Demand for distilleries’ hand sanitizer slows

Distilleries focus on new opportunities

MADISON, Wis. – Local distilleries started hand sanitizer production at the beginning of the pandemic to help with shortages and to stay afloat. Now that the demand has dried up a bit, the businesses are finding new ways to make it through the pandemic.

Old Sugar Distillery near downtown Madison has had to mix it up.

“(It’s) just a relaxed atmosphere with good cocktails,” tasting room manager Bill Heintz said.

Before they could reopen cocktail services at their outdoor patio, Heintz said hand sanitizer production helped them hold on.

“Oh, at first it was gang busters,” he said. “We sold three, four pallets of it. Now that’s just slowed down a little bit. Now it’s going out, but not as fast as in the beginning.”

“We’ve gone all in on that for as long as we can while the rest of our business is disrupted,” said John Mleziva, founder of State Line Distillery, also near downtown Madison. It has not yet reopened to the public.

Mleziva said hand sanitizer has been a good source of income and a way to give back to the community, but now the market is changing.

“It terms of getting new customers, that’s more difficult these days,” he said.

He’s also invested in new equipment to make sure the sanitizer meets FDA criteria.

“Most of it, once it was used for sanitizer, that’s the only use for it,” Mleziva said.

Nels Forde, general manager at Yahara Bay Distillery in Fitchburg, said as hand sanitizer sales drop off, spirits sales have come back up. He said although they’re still figuring out how to best reopen to the public, business is doing well now.

“The sales of hand sanitizer was fast and furious, but it didn’t even make up for the loss in sales because we just sold it and gave it away as much as we could,” Forde said. “It helped keep people employed. It helped keep us busy. It helped us feel proud about what we were doing and contributing, but now the market is saturated.”

Keeping up with the changes is a tall order. Heintz said the Old Sugar Distillery’s patio won’t be open when it gets cold out.

“If it continues just like we are, that’s enough, but what’s going to happen in the winter?” he said. “That is the real tough part of this business now, is just not knowing.”

“There’s so much I love about what I do,” Mleziva said. “In terms of creativity, being able to bring something to fruition from scratch.”

He and other distillery leaders are using that creativity as they look ahead to a muddled future — searching for new opportunities to provide products to their customers safely.

“It’s really managing, how do we navigate that in a way so we can be a viable business on the other side?” Mleziva said.