Alcohol manufacturer Greenfield Global has begun producing ‘other than standard wine’ (OTSW) in the US for the first time, in a move designed to reduce the impact of import tariffs.
The Toronto, Canada-headquartered company is producing the liquid at a new site in Shelbyville, Kentucky – construction of which began in September last year. The facility houses a 40,000-gallon (16,869 nine-litre cases) tank and utilises a reverse-osmosis water system for purification purposes.
Greenfield Global told Global Drinks Intel that “the new domestic source means reduced tariff exposure and supply-chain complexities”, as well as targeting “rising imported ingredient costs”. The US currently has a 10% tariff in place on non-USMCA (US, Mexico and Canada trade agreement)-compliant goods from Canada, after a US Supreme Court ruling struck down a proposed 35% levy in February.
OTSW is a classification of wine used to make malt-, spirit- and wine-based beverages such as ready-to-drink (RTD) cocktails, aromatised wines and seltzers. The liquid is the only alcohol currently produced at the Shelbyville site.
Greenfield Global would not disclose how much has been spent on the facility.
“This specific site is optimally located in the heart of bourbon country Kentucky, at the epicentre of America’s flavoured spirits industry, and offers direct rail access and flexible shipping options – including tankers and totes – ensuring rapid delivery and reduced freight costs,” a spokesperson said.
Asked about the current demand for OTSW, the spokesperson said: “Consumers are no longer finding one drink they like and sticking with it for 30 years, they want to try new things. Companies are being challenged to create new drink experiences and there has never been a broader portfolio of flavoured products of all classes and types on the market.”
Greenfield Global has operations in Canada, Ireland, Malaysia, the UK and the US. The company describes itself as “a large supplier of high-purity ethanol and high-alcohol flavours for the spirits, beer and wine industry”.
Elsewhere in Canada, Fairfax Financial Holdings agreed last week to acquire wine group Andrew Peller in a deal valuing the business at CAD$579m (US$413.7m).
