Almonte distillery secures multimillion-dollar contract to supply hand sanitizer to hospitals

During the pandemic, Dairy Distillery in Almonte doubled its intake of milk permeate to create sanitizer. The dairy by-product, which is normally wasted, is fermented to make the alcohol used in the sanitizer. Photo provided

What started as an effort to stay afloat during the pandemic has opened doors for a local distillery that could see millions of dollars in revenue over the next decade.

Dairy Distillery, an Almonte-based company, has been approved by HealthPRO, a buying group for Canadian hospitals and health-care facilities, as a licensed supplier of hand sanitizer. The contract will allow the distillery to sell sanitizer to more than 1,300 facilities across Canada. 

Dairy Distillery CEO and founder Omid McDonald said he expects the contract will bring in about $5 million per year over the 10-year span.

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HealthPRO renews its contracts with suppliers every decade. Once approved, suppliers can sell to hospitals individually. In Ontario, HealthPRO supplies 180 health-care facilities, including The Ottawa Hospital, CHEO, the Children’s Aid Society and local hospitals such as the Almonte General Hospital, Cornwall Community Hospital and Kemptville District Hospital.

When the COVID-19 pandemic began, the team at Dairy Distillery turned their expertise in making vodka cream liqueurs from milk sugar into manufacturing hand sanitizer to supply Ottawa hospitals within temporary pandemic guidelines. Now that hospitals have returned to their previous suppliers, McDonald said The Ottawa Hospital encouraged him to apply as a supplier through HealthPRO.

Dairy Distillery donated and sold hand sanitizer to The Ottawa Hospital, including this donation of 1,000 litres, during the pandemic. Photo submitted

“I thought, ‘How are we ever going to compete with Purell and these billion-dollar companies?’” McDonald said. “And it was a huge process, but we just kept pushing and a week ago we got the notice that we were selected, which is pretty cool for a small company.”

The temporary licensing from Health Canada that Dairy Distillery had relied on for manufacturing sanitizer during the pandemic had “collapsed,” McDonald said, so the distillery had to be re-licensed permanently.

“There was lots of investment to work to get the qualifications,” McDonald explained. “We had to prove the shelf life of sanitizer and test all that, and then there were hundreds of pages of questionnaires.”

Once applicants pass the initial round of qualifications, select suppliers are invited to submit a detailed proposal and are scored according to “rigorous criteria” established by HealthPRO’s team of professionals, as well as by practising clinicians, business professionals and subject matter experts from across the country, a spokesperson for HealthPRO told OBJ.

“As Canada’s group contracting provider for health care, HealthPRO is committed to the highest standards of professional practice and strictly adheres to all procurement regulations governing our members,” said Kendra Frey, vice-president of materials management for HealthPRO. “Dairy Distillery was awarded the contract after an open, fair and competitive process.”

Dairy Distillery’s Alexandra Amodeo has taken on the new role of director of sanitizer and ethanol sales and formed two partnerships to help with the “100-per-cent, made-in-Ontario solution” that McDonald wanted to offer. 

One partnership is with Ophardt Hygiene Technologies, a German manufacturer that built a dispenser factory in Beamsville, Ont. in response to the pandemic. The other is with The Stevens Company, a Canadian supplier of hospitals, physicians and long-term care facilities for over 145 years, which will help Dairy Distillery distribute sanitizer to its clients.

As for continuing with the distillery’s traditional products, McDonald said it’s a perfect fit. 

“Sanitizer is totally related to alcohol, the same people who produce alcohol will just be making more of it,” he said. “One day we’ll bottle vodka and the next day sanitizer. It’s a good fit and gives us more resiliency.”

McDonald hopes to add four to five new employees to the 12-person team in Almonte to assist with the new contract, he said. 

The contract begins June 1, and McDonald said he’s excited that health facilities will be able to purchase options that are made locally and wants to raise awareness that there are Ontario-made suppliers.

“The timing worked really well. We did all this work during the pandemic and wondered about where it all ends up,” he explained. “Now it will be longer term. And even if there’s another pandemic, the sanitizer will have a local supply.

“A lot of people liked how we helped out during the pandemic and got to know about our spirits and cream liqueurs that way and now maybe it will be the other way around. We stuck at it. We’re a small team, but we’re a persistent one.”

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