Riding the waves – small business staying afloat during COVID-19
See how small business Noosa Heads Distillery went from producing award-winning spirits to making medical-grade hand sanitiser in less than two weeks.
Losing upwards of $700,000 in revenue can spell doom for a young, small business. But Noosa Heads Distillery Operations Director Tim Crabtree explains how his team navigated the COVID-19 crisis and what he learned in the process.
Noose Heads Distillery, the Sunshine Coast’s first distillery, opened its doors in March 2019. Sharing premises and ownership with Land & Sea Brewery, Noosa Heads Distillery produces spirits in a massive 2000-litre copper pot reflux still. There’s also a tasting room with an extensive cocktail menu.
A commitment to sustainability drives the business. “We do a lot of environmental stuff here, try to stay off the grid, be as self-sufficient as we can,” Tim Crabtree says. Their efforts have resulted in Plastic Free Noosa gold membership and accreditation under Surfrider Foundation Australia’s ‘Ocean Friendly’ program.
Using low-impact methods, the distillery made a big impact in the world of spirits. Just four months after opening, the distillery won three 2019 Royal Australian Spirit Awards medals.
Noosa Heads Distillery made big wholesale gains in early 2020. After tripling account numbers, the distillery increased marketing budget to attract more business. But then COVID-19 hit.
“It was brutal because we’re less than two years old, and we were just getting some traction in the market,” Crabtree says.
Crabtree estimates the distillery and Land & Sea lost $700,000 in revenue in the first two months when his venue and wholesale customers closed.
Crabtree saw US distilleries and breweries shifting to hand sanitiser production. He thought Noosa Heads could do something similar. Around the same time, a vascular surgeon from the Sunshine Coast University Hospital approached him to ask if his team could step into this space.
“I went from, let’s make it and to sell to people who come into our bottle shop to, OK, we can make an impact on people’s health,” Crabtree says.
He says that “opened up a huge can of worms.” To make medical-grade hand sanitiser, the distillery had to get a Therapeutic Goods Association licence and follow a World Health Organization recipe.
Noosa Heads had the equipment – it just needed to re-engineer its production procedures. Instead of 90% ethanol solutions cut down to 40% for consumption, the company had to make high-potency ethanol products that measured 70-80%.
“We had to sort out manufacturing and production protocols and documentation – every batch has to be documented with DMA readings and have the right packaging and stickers,” Crabtree says.
Getting everybody on board
As all the pieces fell into place, Crabtree prepared his team to switch focus. “We had to upskill staff, do a lot of formulation and sums to work out exact ratios,” he says. “Our whole team jumped on it and used their different skill sets. “My brewer is really good at fermentation and using different ingredients. My distiller got the highest possible proof as quickly as possible, because time was against us.”
Over a hectic 10 days, the team produced its first batches of hand sanitiser. The initial sales drive focused on high-risk populations like medical institutions and aged care homes. Phase two shifted to public sales. Now the company is fulfilling larger orders for local pharmacies and TAFE Queensland.
Ready for action
One key to production was the massive 2000-litre copper pot still. The machinery requires a lot of energy to run, especially when working overtime to produce hand sanitiser in a condensed timeframe. About 10 days before production started, AGL installed a new 58.74 kilowatt (kW) solar energy system and repositioned an existing 20 kW solar system, bringing the total rooftop generation capacity of the Land & Sea premises to 78.74 kW.
“That meant we didn’t have the energy consumption worries we would’ve had running off the grid or the smaller solar system we had before,” Crabtree says.
“The installation came at the perfect time. With the new system from AGL, we could run that based on solar power and produce the hand sanitiser energy efficiently.”
The importance of agility
While Crabtree is proud of the work the distillery did producing hand sanitiser, he says the distillery will only continue fulfilling bulk orders. But that’s not all they will take forward into whatever the ‘new normal’ is.
During the pandemic, Crabtree started selling local products in his bottle shop without charging a commission, turning it into a makeshift independent grocer. With a range spanning homemade gnocchi to pre-made cocktails, this drove extra traffic to his store.
“There was a lot of camaraderie with this new way of operating,” Crabtree says. “It was a good way to work with different people and be relevant in the community, make them a bit of money and make a bit ourselves.
“It’s like that adage – one and one make three.”
Crabtree says the biggest thing he’s learned from working through the COVID-19 pandemic is the importance of pivoting quickly.
“I want to always make sure we’re dynamic enough to rise and fall with the tide and adapt to challenges. A lot of businesses were so niche that as soon as that focus gets removed, they’ve got no second play.
“It’s thinking about how you can have the rug pulled out from under you. Next time we can be even more resilient and fast-acting in the way we deal with a crisis.”
Photos from @landandseabrewery via Instagram.