New Restrictions Could Hurt Hand Sanitizer Supply Even More

At the beginning of March, worries around coronavirus, at least as far as Americans were concerned, centered on the supply chain interruptions as China dealt with manufacturing holdups and its own battle against the virus. Things obviously changed quickly, as the virus spread to Europe and eventually the U.S.

Experts' instructions during that time, when we were all still able to go to work and stores were still open, was that we should be diligently washing our hands with soap and water, and when we were out in public, use hand sanitizer. The ensuing panic purchasing of hand sanitizer inundated suppliers, who were fielding calls and emails at such a rate that some even had automatic responses telling distributors not to even bother, they’re out of stock, they won’t be in stock for a while.

In April, things started leveling off a little. We stayed at home, flattening the curve as much as we could (thanks everybody), but the hand sanitizer problem wasn’t solved. At this point, the problem actually became sourcing the plastic pieces for the containers, proving that supply wasn’t quite ready to meet demand.

Now we arrive at May’s monkey wrench.

This one comes in the form of the Trump Administration’s decision to tighten regulations on some hand sanitizer ingredients. This could potentially gum up the supply process at a crucial time, as health care professionals are still working double time to treat patients, and some states have made hasty decisions to potentially reopen before the threat fully subsides.

“As events continue to cancel and reschedule for this fall, I expect we will only see greater demand for hand sanitizer and other PPE products during that time, and a continued increased demand for the foreseeable future as PPE becomes more a part of our day-to-day lives,” said Lindsey Davis, director of promotional sales for Raining Rose Inc.

So, some suppliers are going to have to pivot, which they (and just about every other business in existence right now) have already had to do over the last two months. This could mean adjusting ingredients in their hand sanitizers to meet new regulations.

According to Reuters, the FDA notified fuel ethanol companies that their products don’t meet some safety standards. In some cases, the products were found to have potentially harmful levels of acetaldehyde, a carcinogen, in ethanol supplied for hand sanitizer use.

These notices have caused companies to halt production, which has in turn affected hand sanitizer supply.

A plan to ease the hand sanitizer shortage could go bust https://t.co/0iVLueg4l6 "One concern with impurities data submitted by some fuel ethanol companies is the unacceptable levels of known carcinogens, such as benzene, as well as formulas containing gasoline," the FDA said. pic.twitter.com/7yQSxvyqyw

— Kelly Dobos, Cosmetic Chemist (@kellydobos) May 2, 2020

“Finding USP grade ethanol is starting to get more difficult and the price is going up due to the demand,” said Rosanne Webster, chief information officer for SnugZ USA. “This is the main factor that is driving our pricing at the moment. The FDA is also cracking down on companies not denaturing their alcohol (an additional process to make the formulation unpalatable) for use in hand sanitizers, and have stated that calls to poison control have increased dramatically—more calls in the past two months than the entire prior year.”

“We already have procedures in place at Raining Rose to ensure that the ingredients we receive meet our quality expectations including documentation, color, scent, consistency, and so on,” Davis said. “As such, we were quick to notice a change in the Ethanol samples we were receiving from our suppliers when restrictions opened up allowing more manufacturers into the space. We have chosen not to order any ethanol that does not meet our long-standing quality standards. This does mean we have limited supply to work with. In talking with our director of purchasing about this, he mentioned that the availability is changing rapidly, but that is the case for more than just ethanol.”

Another pivot point is potentially getting creative with hand sanitizer bottles and packaging, which can still prove elusive.

“I can’t speak on behalf of the entire industry, but at SnugZ USA, our problem was not with the supply of the hand sanitizer itself,” Webster added. “Our problem in March was securing enough containers to meet the demand. We had prepped for an increase in demand but nowhere near the demand we actually received in just a few days’ time.”

Demand might have plateaued a bit since this all started, but it’s not going to die down any time soon, it seems. A silver lining here is that some companies are starting new production efforts to ease the weight of demand on existing suppliers. Reuters reported that Archer Daniels Midland, a producer of biofuels, announced last week that it would provide industrial ethyl alcohol to Sazerac Company to boost hand sanitizer production.

There’s also been help from some unlikely names like Tito’s Vodka, but all of this might not be enough to fully solve the issue.

It’s almost like a game of Whack-a-Mole. When one problem seems to subside, another supply chain issue arises.

Editor's Note 5/11: This article has been revised to clarify the restrictions on compliant ethanol products. The previous version could be misconstrued as a restriction on ethanol in hand sanitizer completely.