PPP ‘instrumental’ for Montpelier distillery keeping its spirits up

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PPP ‘instrumental’ for Montpelier distillery keeping its spirits up

Sun, 10/25/2020 - 1:34pm -- tim

Minty Conant, Caledonia Spirits Special Projects Manager. You probably know them by their Barr Hill brand of gins and vodkas. Photo by Danny Monahan

by Daniel Monahan When Covid-19 started to become a full-blown pandemic in the United States in mid-March, one of the darkest outlooks was how America’s small business sector would fare.

Main Street staples such as movie theaters, bars, restaurants, bookstores and clothing shops shuddered their doors nearly overnight.

“Our initial reaction first and foremost was the health and safety of our employees,” said Minty Conant, Caledonia Spirits owner and special projects manager. Caledonia Spirits is a distillery and bar in Montpelier. “How do we keep everyone safe? Secondly, do we shut down all of our retail and bar operations. Bars and restaurants around the country were shut down as well– we were concerned for our survival as a business.  The uncertainty was extremely stressful.”

By March 27 the Coronavirus Aid, Relief, and Economic Security Act, a $2.2 trillion economic relief bill, was signed into law and one of its primary provisions was the Paycheck Protection Program. PPP provided small businesses forgivable loans through the Small Business Administration to prevent mass layoffs and allow employees to stay home to stop the spreading of the disease.

Millions of small business throughout the U.S. received billions of dollars in PPP loans. Vermont, the second least populated state in the union, received 13,068 loans worth approximately $1.3 billion. Hundreds of different industries throughout the state received loans.

Yet it goes way beyond statistics. Each digit represents a single small business struggling to make it through a once in hundred-year event. 

“PPP was instrumental in providing us a fast cash relief valve to keep our employees working as we pivoted to sanitizer. We used the funds almost entirely for payroll,” said Conant. “Our goal was to keep as many employees working for as long as possible- the paycheck protection program was aligned with our goal to do this.”

Small businesses received 2.5 times their monthly payroll and initially needed to spend at least 75% of the PPP loan over eight weeks on payroll and no more than 25% on rent, mortgage and utilities to get the loan forgiven. As a result of the PPP Flexibility Act passed in April rules were relaxed  to better accommodate industries such as hospitality, businesses then needed to spend at least 60% of the PPP loan over 24 weeks on payroll and no more than 40% on rent, mortgage and utilities to get the loan forgiven.

During the era of Covid, Caledonia Spirits had to adapt and change business practices. In March when the Food and Drug Administration issued a short-term policy allowing distilleries to produce alcohol-based hand sanitizer to combat the short supply, Caledonia Spirits jumped at the opportunity.

“We were very fortunate to the have the distilling capacity and capability to switch to a new product within days that helped to fight the virus. It gave us a sense of purpose during a very confusing time,” said Ryan Christiansen, Caledonia Spirits owner and cofounder.

As important as disinfecting hands is during this time, people still want to buy a bottle of gin or visit the distillery for a mixed-drink, so Caledonia Spirits started selling cocktails-to-go this summer. From 2 to 8 p.m. customers can visit their patio to purchase a drink and other retails goods such as a bottle of gin or a bottle of honey. Customers are required to wear a mask and adhere to social distancing.

As the weather turns colder other adjustments will most likely need to be made. Caledonia Spirits is one of the 13,068 PPP loan recipients in Vermont trying to make it through this pandemic. The SBA is hoping the other 13,067 Vermont small businesses are nearly as fortunate.

Daniel Monahan is the Public Information Officer at the Vermont District Office of the US Small Business Administration.