Glass bottle shortages pressure wine and spirits companies
On Thursday, January 30, 2014, glass bottles are moved down the conveyor belt at Jack Daniel’s Single Barrel Select Tennessee Whiskey Bottling Line in Lynchburg.
Luke Sharrett | Bloomberg | Getty Images
Winemakers from California’s sunny hills and Kentucky have been able to meet the growing demand for glass containers.
The world’s supply chain — already lengthy and tangled in the United States — is continuing to bear the brunt of surging consumer demand, labor shortages and overseas manufacturing delays, which has led to higher transportation costs and inflation.
David Ozgo is the chief economist of the Distilled Spirits Council. He said that glass shortages can be felt in all sectors, including tequila, vodka, and whiskey.
Ozgo explained that large distillers have multiple-year contracts to buy millions of bottles. However, this means they are having to make choices about which sizes they will get. As the focus will be on the most popular sizes (the 750ml and 1.75l), this could lead to fewer smaller volume bottles in the future.
Some consumers might have to work harder in the short-term to locate their preferred booze.
Ozgo explained that the special bottles you’re looking for during the holidays might require you to return to the shop several times to locate it. But I can tell you this: there are more than 16,000 spirit-based products being marketed each year. You might consider trying a new beverage.
Castle & Key distillery in Frankfort, Kentucky, is among the many distillers that have pivoted glass suppliers in the face of supply chain woes.
Jessica Peterson was the director of operations for the distillery. She stated, “The coronavirus infection in the U.K. factory we worked with had caused our production to be halted completely. It also meant that our product had to go back a couple months.”
Peterson stated that, when the U.K. operations reopened they were forced to resolve supply chain problems and had to temporarily switch to air freight due to the delays faced by sea cargo.
Peterson explained that “the preferred method usually would be sea freight,” adding that shipping costs have tripled since the pandemic.
Peterson explained that “Since our transition, it’s been possible to have a constant supply of glass.”
According to other sources, shipping container demand has increased to the point that people are willing to pay up to $6,000 for a single container. She said that it was just crazy.
PortMiami is where shipping containers go after they have been offloaded from a vessel on November 4, 2021.
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Peterson explained that in order to reduce future supply chain problems, the distillery orders no more six months ahead than it does at least two year’s notice. She said that the production costs have increased due to the interruptions.
At the moment, consumers are not subject to a price rise. However, that is possible,” she stated.
Waterloo Containers, a New York supplier of imported glass has increased its prices to its customers. Waterloo has a large inventory of American-made glass wines and spirits, while about 10% comes from other countries. According to Bill Lutz (its president and owner), domestically made glass has experienced lower price rises due to increased freight and energy cost.
Lutz explained that Waterloo began having problems with its imports around six months back. Waterloo orders increased by a third this year, despite having only a fraction of imported glass. Supply chain issues and the search for new suppliers have led to Waterloo seeing its imports increase.
Waterloo has a stocking model and is not based on the “just-in time” method. It therefore always keeps extra inventory.
Lutz explained that they have shipped “more bottles to the West Coast this year” than any time in 20 years.
The majority of glass bottles in America are made outside of the United States. Years ago, glass manufacturers shifted production to countries where glass could be made more cheaply — mostly in Asia.
Mauricio Peruez, North American Regional Director for Panamanian Glass Supplier BPS Glass estimates that 60 to 70% of all glass bottles consumed in the U.S. originated from China. That was before Trump’s trade war. Some glass manufacturers opted to buy glass in Europe and Latin America from European or Latin American factories because of the tariffs that China imposed on imports.
After the initial pandemic, there were waves of new cases and more lockdowns. This created supply chain problems around the world.
Winemakers from outside the U.S. face a more serious problem. Perez reports that wine- and spirits producers in Latin America face more challenges because of the switch by certain companies in the trade war to glass made in China rather than Chile.
This is a difficult situation to solve. Building glass furnaces and establishing new production lines can take up to a year.
Lutz explained that glass supply is limited and cannot be brought back to the United States.