Founded by Bill Lark in 1992, Lark Distillery is Tasmania’s oldest single malt whisky distiller. Before COVID-19 its core business was producing whiskey, as well as its gin brand, Forty Spotted Gin.

However, within a short 6-week period, Lark Distillery added a new offering to its business model, the supply of much needed sanitiser to Tasmania’s hospitals, aged care centres and State Emergency Service.

In this blog we interviewed, Dan Knight, Head of Hospitality at Lark Distilling, about what the process entailed and the hurdles they needed to overcome to pivot the business to sanitiser production.

The initial impact of Covid-19

When restrictions were first put in place in March this year, how did it affect business for Lark Distilling?

For my part of the business, which is hospitality it had a huge impact. We have four hospitality operations and I went from having a large team to suddenly shutting everything down except for our cellar door, which operates as a bottle shop. The rest of the business managed to get by, as we sell liquor, which we all know is in high demand in Australia.

The transition to producing sanitiser was a great outcome for my team, as we were able to redeploy the entire hospitality workforce into the production, bottling and dispatch of sanitiser.

What made you decide to move towards the production of sanitiser?

Before we saw major shutdowns and restrictions due to COVID, I was trying to track down sanitiser for my hospitality operations. We could isolate the distillation, office and administrative parts of the business, and keep those employees safe, however my team was face to face and the threat of COVID was there in the community.

I drove all over the city to find sanitiser and I couldn’t find it anywhere and it became a very common theme. Our Head of Distillery was in contact with the global distilling industry and was being informed that companies in the United Kingdom and United States were pivoting to sanitiser production.

We called various hospitals, schools and the State Emergency Service in Tasmania and they were all saying, we can’t track down enough sanitiser, as all our suppliers have dried up. So we decided to give it a go to and help front line services in Tasmania, which were facing the issue of sanitiser shortages.

Hurdles along the way

The transition to creating sanitiser must have come with its challenges. What obstacles did you face and how did you overcome them?

We started off quite naively, as we were sitting on a reasonably large amount of neutral cane spirit, which is basically a high ethanol alcohol. It’s at a high enough ethanol level that you can turn it into sanitiser with the addition of glycerin and hydrogen peroxide.

We took all of our spirit and turned it into sanitiser and gave it to the hospitals and the police and the State Emergency Service, and numerous doctors and pharmacies. We thought we would be able to buy more spirit to keep producing our gin. That was it, our first batch was gone and we got on the phone to our neutral cane spirit supplier and they said that they would give us 5000 litres, which is not very much in the scale of the gin we produce, and that would be it for the rest of the year.

We were reacting to situations, it was never a commercial decision, we were trying to have an impact within the community. While we acted quickly to get sanitiser to people and organisations that needed it, suddenly we didn’t have enough spirit and thought “what are we going to do now?”. There’s a need in the community for sanitiser, which is not going away but we also have our own gin production to take care of.

So we made a gut decision, as we knew the need for sanitiser wouldn’t go away quickly, and decided to invest $750,000 in the production of a different type of still that would allow us to produce neutral spirit ourselves. We also contacted a lot of fortified wine producers and struck some deals and managed to get hold of another 10,000 litres of neutral cane spirit, on top of the 5000 litres from our usual supplier.

What was the process of creating a new still for sanitiser production?

We found a partner in the north of the state who could make the still. They would normally turn a project like this around in about 12 months, however they did it for us in 6 weeks. So in that 6 week period we had to really commit ourselves to this new business model.

While the still was being produced we:

  • searched the globe to find the bottles to put the product in, enough hydrogen peroxide and glycerol to create the sanitiser;
  • got labels designed and dealt with all the therapeutic goods administration and restrictions around labelling;
  • changed the geography of our distillery, so we had room for the new still and dealt with the different power need that it required; and
  • developed and road-tested formulas until we came up with our own cosmetic gel formulation to bring to market.

There was not a lot of sleep that was had in the first 6 weeks.

The Tasmanian Premier, Peter Gutwein attended the opening of the still and he was impressed by the ingenuity we had shown. We wanted to make sure that if this crisis was to continue that Lark Distillery would be able to produce as much sanitiser that the state needed, for the length of time needed. I think the Premier was impressed by that commitment.

 Lark Distilling Co. hand sanitiser gel. 

The slowdown in demand for sanitiser

In most stores these days there is plenty of sanitiser available. Are you finding this is the case in Tasmania and has the demand reduced due to the increased supply?

Using a hospitality analogy, I felt like I went from running the coolest nightclub in town, to the place no one would be seen dead in. There was a time where we couldn’t produce anywhere near enough sanitiser, or with the speed that the community needed.

We were selling sanitiser through our cellar door and we would have a queue that would stretch 400 metres down the street every day. We had to put bottle limits on sanitiser purchases, so one person couldn’t come in and buy the entire shop out. We had somewhere between 120-150 email enquiries a day and a massive wait list. We constantly ranked and re-ranked that list based on the community need. A hospital or aged care centre would call and they would be jumped to the high part of the list, whereas an individual consumer would be down towards the bottom.

We had to try to do the best we could. Suddenly everyone got into sanitiser production, and that’s a great thing. There is always a delay between something happening and the business response. We’ve been able to show agility in our business. There is not the demand that was once there, however we’ve developed a good base of core businesses that purchase their sanitiser from Lark Distillery.
With the slowdown in demand, do you see Lark Distillery continuing with the selling of sanitiser?

The sanitiser that we produced follows the World Health Organization formula, which is not very pleasant. What we’ve created in terms of the gel formula, is something we are proud of with native Tasmanian botanicals. We will continue to make that, and we will make it to the level of the demand.

We wanted to make sure that we have the capabilities to scale up that production if we find ourselves in a crisis again. It would be terrible to ditch all the bottles and everything we have invested in and have a six-week lag again.

However, our core business was, is and will remain the production of whiskey and gin. In terms of the hospitality side, we are waiting for borders to reopen. Tasmanian borders will remain closed until at least 1 December 2020.

The Lark Cellar Door, our main hospitality operation is open and will remain open and has its loyal regulars and is a lovely place to come. All of the other operations will remain closed until the tourism commences again.

All of my hospitality team are fully ensconced in operations in the distillery. While the demand for sanitiser may have died off, the demand for our whiskey and gin has increased. That’s the main thing for me, is the continued livelihood of my team, until we can get back to doing what we know and love. The goal was to weather this crisis as a team.