How Much Room Should You Allocate for Product Storage?
One of the questions we get a lot about storage and rickhouse space is “How much is “enough”?” Different production processes and sales pipelines have different distilling product storage needs, and inventory for aging is different from inventory for temporary storage. We’re going to cover some of the basics but always ask questions of your local authorities and the TTB about local regulations and requirements. The TTB is normally very helpful and willing to answer your questions so that their reporting goes smoothly and no one has to chase anyone down for missing or improper paperwork. The following Q&A is not a comprehensive guide since every situation is different, but it should help you start thinking about your business and what your needs are.
Where Can You Store Finished Spirits?
When Storing alcohol commercially, finished spirits can be stored onsite at your production facility or in a bonded space off-site from. Spirits are normally stored in holding tanks or barrels for resting before they are bottled and sent out the door. Holding tanks can Please do not use 250-gallon plastic totes as long-term storage, they are rated as temporary storage for transport purposes. They are quick and easy to use but they are not rated for long-term storage of high-proof spirits and, therefore not compliant with regulations.
What Does the TTB Have to Say?
There is a very lengthy FAQ/Tutorial for reporting on the TTB website here. It is highly recommended you bookmark it and get familiar with the relevant parts to your operation. A Statement of Physical Security needs to be on file to show how premises are secured, both production and storage areas, to comply with the law. You will also have monthly, quarterly, and annual reporting. When you are doing your record of inventory the regulation states:
“The regulation governing storage inventories, 27 CFR 19.333, states that you “must take a physical inventory of all spirits and wines held in the storage account in tanks and other containers (except packages) at the close of each calendar quarter.” The DSP must maintain a record of that inventory including all of the information (date, container identification, kind of spirits, losses, and signature) listed in 27 CFR 19.623.”
This record must be signed under penalties of perjury. Production inventories must be completed “at the close of each calendar quarter.” The TTB is very strict on its timing, and it’s best to maintain logs that meet, if not exceed, the TTB requirements for reporting.
How is Inventory for Aging Differently from Inventory Ready to be Shipped?
Storage for aging and storage for immediate sale have some different concerns and needs that set them apart. If you’re storing inventory for sales it is important to rotate your inventory so that that pallet in the back of your warehouse doesn’t get a few years worth of “extra aging.” When you’re storing to age your product intentionally, you have much more to think about than just moving inventory around. Most rickhouses are not perfectly climate controlled, if at all, and will have different conditions during the year. By rotating your barrels around the rickhouse you can get more consistency in your final spirit. You’re probably going to want to sample your barrels as they age, so having them relatively easy to access without rearranging your entire storage facility is probably a good long-term strategy. We could write an entire book on rickhouse and solera style storage, so it is way beyond the scope of this article to go into every detail.
What do you think? Hopefully, you found this helpful, and it got you thinking about what you’re required to do and what will be best for your needs. There are so many different strategies and options that it would be impossible to cover them all, but leave a comment below or give us a call at 561-845-8009 and let us know what you need. And if you have a few tips and tricks you think we should know, we’d be more than happy to learn from you! Cheers.
