Change from distilling alcohol to making hand sanitizer filled a desperate need
When new small business owners are just starting out, they’re typically armed with a plan and a solid sense of how the first couple of years might unfold. But, as Simon Buttet, owner of Alchemist Distiller in Summerland, B.C., discovered, reality is sometimes quite different.
In December 2018, the French-born Buttet opened his distillery in the Okanagan Valley, making spirits such as gin, liqueur and absinthe, all from local apples. After the first year, business was doing well but was a bit more seasonal than Buttet had anticipated.
“In the liquor stores, there’s more competition, and people don’t get to try our products,” he explains. “But in the distillery and at the summer and fall markets, we can offer tastings and once the customers have tried it, it’s a hit.”
Still, he was happy with how things had gone. But early into Alchemist’s second year, Buttet faced an unexpected challenge: COVID-19.
Immediately, he realized he had something that people desperately needed. “People couldn’t find hand sanitizer,” Buttet says. “We said, ‘We can help because we’re alcohol makers and that’s an easy switch for us.’”
Once Buttet got the proper licensing and Health Canada’s approvals – in days, he says, rather than the more typical months – he contacted his insurance broker, CapriCMW Insurance Services Ltd.
“Whenever you change your operations, you have to declare it to your insurer because there can often be new risks involved,” explains Andrew Kemp, president of Burnaby, B.C.-based CapriCMW.
For Alchemist, the pivot from making distillery products to hand sanitizer meant it was now dealing with a higher percentage of alcohol and marketing to a different clientele. In addition, there were property considerations that required altering safety measures to increase protection.
Fortunately for Buttet, with the help of his insurance partners, those changes happened in a record two and a half days.
“When almost everything else was shut down, our team was working with customers like Alchemist to help keep them operating,” says Kemp.
While Buttet understood that he had to inform his broker and insurer about production changes, Kemp says many customers don’t stop to think about the implications of changing their business, and so assumptions – often incorrect ones – are made.
“Spending the time to make sure your new risks are properly covered off is essential,” Kemp explains. “People often assume the best-case scenario and then the worst happens, and your coverage needs to be prepared for that.”
Once his updated coverage was in place, Buttet could start producing. The early sanitizer batches used Alchemist’s newly released apple vodka as its alcohol base. “That was quite a hard decision to make,” says Buttet, laughing. “It was like a new baby for us – but it was the best smelling hand sanitizer ever!”
Before long, though, Buttet was distilling the base from sugar and preserving the coveted vodka for its intended use.
While Alchemist had to pivot during the pandemic, so, too, did its insurer Northbridge.
“Our primary concern is supporting customers during these tough times,” says Petra Hoerrmann, an underwriting director representing Northbridge Insurance who insures Alchemist. “You learn to be flexible rather quickly because there are things like this that nobody expected. With Alchemist, it was how can we work together with them and their broker to help and not be a roadblock through the change?”
While businesses can’t prepare for every possible scenario, Hoerrmann says ongoing risk assessment and open communication between the business, broker and insurer can help when the unexpected happens.
“Some small business owners have no idea what they’re insured for or who they’re insured with, and you don’t want to scramble for that information when time matters,” she says. “If you stay connected with your broker and keep them informed about changes to your business, they can work with you and your insurer to help make sure you stay properly covered.”
In the early weeks of the pandemic, Buttet was shipping hand sanitizer to airports, the RCMP and various associations. That demand has now died down, allowing Buttet to refocus on Alchemist’s regular products.
“In a time like this, you just have to understand where you can help,” says Buttet. “We didn’t save the world. We just did our small part.”
Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.