Beverage Manager Global | Issue 10 | OCT 2014 by Beverage Manager Global

Euro 2.80 ISSUE 10 | OCTOBER | 2014 • www.beveragemanager.net

New JV for Asco Carbon Dioxide

JOINT VENTURE

The German firm BUSE Gastek GmbH & Co. KG, headquartered in Bad Hönningen, is merging its business divisions for CO2 production and recovery plant construction and dry ice technology with the Swiss company Asco Carbon Dioxide Ltd., headquartered in Romanshorn. Employees of BUSE Gastek working in these divisions will be transferred to ASCO, a subsidiary of the German specialist in industrial gases Messer Group. | (p.04)

Top Fastest Growing Consumer Markets in 2014

COUNTRY RISKS

A comparison of all consumer markets in terms of their expected consumer expenditure annual real growth in 2014 reveals some interesting fastgrowing markets that are not among the usual major emerging markets (such as the BRICS and the MINT). | (p.10)

BREWERY Oriental Brewery plans to improve Cass’s bad bouquet

One of the frequent complaints you hear from foreigners in South Korea is that the food is great but the beer is well…just boring and sometimes stinky. Mindful of such a perception, the nation’s top beer maker, Oriental Brewery, said last month it will spend 120 billion won ($116 million) on improving quality control and, most importantly, removing bad odor from its best-selling beer, Cass. | (p.09) (p. 16)

By James R. Hagerty

A mobile craft beer-canning operation makes its local debut

y the time he reached his late 30s, Pete Rickert Jr. was fed up with supervising construction sites. “I got tired of yelling at grown men all day to do their job right,” says Mr. Rickert, who lives in Danville, Pa. Then he read about the trend toward packaging craft beer in cans rather than bottles or jugs. Because most craft brewers can’t easily afford their own canning lines, a new type of company was popping up: mobile canners. These firms haul their equipment to breweries, spend a few hours filling cans, then move on to the next customer. Over the past three years, about two dozen companies have started offering mobile canning across the U.S. | (p.15)

BREWING CHINA

Beer bear term prospects better than spirits

China’s well documented targeting of big ticket spirits as part of a wider crackdown on over-the-top gift giving has had a crippling effect on the sales and share prices of some of the key players in the luxury spirits space. The Chinese premium baiju producer Kweichow Moutai and France’s Remy Cointreau (it is a major player in high-end cognac) have been two of the worst affected alcohol companies as judged by the steep declines in their shares prices over the past eighteen or so months. Over this period, China’s beer industry has attracted more interest from the global majors, with the pace of deal making picking up. We believe there is room for more consolidation and that the beer industry is presently operating below its long-term potential with relatively low profit margins reflective of the more no-frills image of beer in China, compared to other markets globally, where it is has been easier to premiumise the industry. Over the next three to five years, From analysis more consolidation by markets leadto concept ers such as SABMiller. Economic power within the wider industry to fieldforce. structure will gradually shift to become more favourable towards combera-group.com the leading beer companies as their market power grows. (bmg)

Sales Outsourcing in Europe

0827_ANZ_Sales_Outsourcing_Europe_RZ.indd 2 19.08.14 18:16

Latin American beer market holds tremendous appeal

The

SABMiller continues African expansion

SABMILLER

will invest US$110mn MARKETS BREWING into Nigeria, continuing its expansion into the African beer market. Nigeria offers fantastic potential, but competition from multinational breweries within the market is intense, and significant risks remain in the country. The world’s second largest brewer operates in Nigeria through a number of its subsidiaries, including Intafact Beverages, which sells Hero lager, one of the most popular beers in the country. The US$110mn investment will go into tripling the brewery’s annual capacity from 700,000 to 2.1mn hectolitres, and will be operational from the first quarter of 2015. Through its subsidiaries, SABMiller has the third largest share of the Nigerian beer market, behind Dutch company Heineken and the UK’s Diageo. Heineken operates through the country’s largest brewer, Nigerian Breweries, which in FY2012 had revenues of US$1.55bn. Nigerian Breweries holds about 57% of the country’s beer market, marketing Star and Gulder lager, and more recently Heineken, which is considered a high end premium product within the country. Through Guinness Nigeria, Diageo holds about 26% of the country’s beer market. Nigerian consumers are the largest drinkers of Guinness in the world, surpassing Ireland. The consolidation of the Nigerian beer market by multinational brewers is microcosmic of Sub-Saharan Africa (SSA), demonstrating the massive potential that many countries within the continent hold. In SSA, Nigeria is a country that holds arguably the most promise, predominantly down to its large, youthful population. Currently, at less than 10 litres a year, per capita beer consumption is low, even by regional standards. There is massive scope for growth within the country, though competition is already intense among major brewers. (bmg)

Latin American beer sector is generally characterised by high consumption and high growth making it one of the most attractive regional markets for multinational beer producers. The economic slowdown has curtailed demand to some extent, but given the high rate of growth between 2002 and 2007, BMI (Business Monitor International) experts expect this to only be a short-term phenomenon, with consumption once again advancing at a rapid pace once the economic outlook improves. In most countries the sector is highly competitive, although this is often due to the dominance of a single leading player, rather than the existence of a truly competitive market. This makes market entry difficult, but, given the potential rewards on offer, multinational brewers continue to invest to expand their reach and forge partnerships with local operators to get their brands into the hands of consumers that are increasingly keen to experiment with premium and foreign beer varieties.

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OverVie w 04

Vietnam reveals top opportunities in Asia’s alcohol boom Alcoholic drinks spending will grow rapidly in South East Asia over the business monitor forecast period to 2018. Vietnam and Indonesia will offer the strongest expansion opportunities in the region. However, despite strong growth forecasts, Malaysia’s small population and the dominance of domestic players in the Philippines will constrain foreign investment. Business Monitor expect the alcoholic drinks sector to experience rapid growth in South East Asia over our forecast period to 2018. Alcohol market profiles vary greatly in the region. Thailand and Vietnam both have high alcoholic drinks consumption relative to their income level, as they enjoy high tourist inflows and a strong drinking culture. At the other end of the spectrum, Malaysia and Indonesia share relatively low alcohol consumption due to large Muslim populations, but their alcoholic drinks markets will grow rapidly over the next five years. Lastly, alcohol consumption is widespread in the Philippines, but growing from a very low base due to low income per capita and high unemployment. Vietnam, followed by Indonesia, will offer the best prospects for alcoholic drinks producers in South East Asia. Although we forecast rapid growth in alcohol spending over the next five years, investors remain constrained by a small population in Malaysia and the predominance ofSan Miguel Brewery (SMB) in the Philippines.

Thailand is a regional outlier, where we expect weaker growth since the alcoholic drinks market is already relatively mature compared to its regional peers. The Philippines is a high potential market due to its large population (above 100mn) and widespread alcohol consumption. The experts forecast alcoholic drinks sales to grow rapidly over the next few years. Nonetheless, opportunities will be limited for international distillers and brewers. San Miguel Brewery (SMB), a subsidiary of San Miguel Corporation (SMC), controls more than 90% of the local beer market. Backed by large financial resources and brand recognition, it has substantial market power, limiting opportunities for international competitors. (bmg)

Vassilios A. Stergiou

vs@beveragemanager.net

BEVERAGE

Labels help launch new bottled water

Turkish soft drinks maker seeks EBRD loan

Tipsy Water, a British natural spring water brand, has launched an innovative range of natural spring waters with an alcoholic flavor in a decorative shrink-sleeve branding solution.

The EBRD is considering a long-term loan of up to EUR30 million (USD37.88 mln) to Turkey’s Uludag, a leading branded soft drinks producer in the country.

COUNTRY RISKS

SUPPLIER and COMPANIES

Top 5 fastest growing consumer markets in 2014

Ocean Spray ventures into flavoured water

Ocean Spray brand has now set its sights on the water market with PACt cranberry extract water, “the next generation of Ocean Spray’s product portfolio that harnesses the cranberry in a refreshing new way”.

SUPPLIER and COMPANIES

Arcobrewery upgrades The Arcobräu brewery, headquartered in Germany’s Lower Bavarian village of Moos, has brought its bottling operations up to the very latest state of the art. The mid-tier family-owned brewery has installed a new Modufill HES filler with crowner from Krones AG plus a Krones Checkmat bottle inspector and the requisite conveyors.

TECHNOLOGY BRAU BEVIALE

Emerson introduces new System Plast NG Evo chain for dry, high-speed conveying in beverage processing New product is lower-friction, tougher and more elastic than original NG chain. Extensive array of corrosion resistant bearings exhibited as well. Emerson’s Power Transmission Solutions business will introduce its new System Plast NG™ Evo conveyor chain at Brau Beviale 2014 (Hall 7), and will also exhibit a wide variety of bearings engineered for beverage industry applications.

SUPPLIER and COMPANIES

New JV for Asco Carbon Dioxide

Brazilian beer brand launched in lightest Rexam-can in South America

NewAge Bebidas introduces its Germânia 55 beer brand in an aluminum bottle can that is lightweight, shatterproof, and infinitely recyclable. Brazilian beer Germânia 55 has been launched in what is said to be the lightest aluminum bottle in South America, the Fusion bottle can from Rexam. The beer is the first beverage of this type to be launched in the Fusion bottle, according to Rexam.

BEVERAGE

OnLine & Mobile ImPrint Publication-Subscription: EUROPE | Beverage Manager GmbH | Business Media Publishing | Lise-Meitner-Straße 3-5 | D-86156 Augsburg-Germany Phone: ++49 (0)821 59 77 6 93 | Fax: ++49 (0)821 59 96 2 46 www.beveragemanager.net | net@beveragemanager.net USA: Beverage Manager GmbH | Business Media Publishing | Sales Department 100 Church Street | 8th Floor | New York | NY 10007, USA Phone: +1 646 845 - 7342 | Fax: +1 646 845 - 7301 www.beveragemanager.net | net@beveragemanager.net Managing Director & Editor-In-Chief: Vassilios A. Stergiou, (vs@beveragemanager.net) Advertising Director: Carsten Endrass (cendrass@beveragemanager.net)

Ad Sales & Account Coordinator: Maggie Thum | (mthum@beveragemanager.net) Editorial - Europe: (editorial@beveragemanager.net) Roland Leblhuber, Roi Chaikou | Editorial - Asia: Vu Trong Khanh Editorial - Russia: Steffan Scholl Editorial - USA: Jennifer Fottrell, Simon Percival Subscription: Europe 65,00 EUR - All other countries 73,00 EUR ISSN: 1860-7772 | Copyright © 2014 by | Beverage Manager GmbH, Augsburg Printed in Germany | Next Issue of BMG: November 5, 2014 | Pictures: BMG Archive All rights reserved. The copyright, republication or redistribution of BMG content in this BMG-Issue, is expressly prohibited without the prior written consent of Beverage Manager GmbH – Business Media Publishing, Augsburg, Germany.

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Tu r k e y

Turkish soft drinks maker seeks EBRD loan ISSUE 07-08 / JULY-AUGUST 2014

Labels help launch new bottled water

ipsy Water, a British natural spring water brand, has launched an innovative range of natural spring waters with an alcoholic f lavor in a decorative shrink-sleeve branding solution. Developed by Imperial Spring Water, the non-alcoholic Tipsy Water range includes f lavors such as gin and tonic, whiskey and cola, rum and cola, and pastiche. The 750-mL and 330-mL glass bottles are encased in a distinctive seven-color, PET shrink sleeve from Clondalkin Flexible Packaging Bury, formerly Chadwicks.

CRAFT BREWING

The EBRD is considering a long-term loan Peter Lynch, Creative Director for Imperial Spring Water, explained: “There’s a number of non-alcoholic drinks in the market place, but of up to EUR30 million (USD37.88 mln) Tipsy Water is aimed at filling the gap of an alcohol-free drink that has global appeal and availability. We’ve spent three years developto Turkey’s Uludag, a leading branded soft ing the concept, and the branding was particularly important. drinks producer in the country. The funds Clondalkin Flexible Packaging Bury’s shrink sleeve solution offered us the high-end, quality feel that we needed for the range, which would be spent on the company’s 2014-15 13 Whether its one of the Pale Ales or pares their cold-ones we to fresh produce, Forecasting the futurethesuccess mibelieve will appeal to an international audience. They were able to produce sleevesofquickly and had the origination resource and investment programme, including launch a flowery Belgian Saisonal, you can tastethean idea shared by Billy Wagnerto who crobreweries, Donald Burke predicts capability brand the bottles exactly how we wanted.” Tipsy Water has no added sugar and no artificial colouring and is made from new production lines and energy the of care that goes into the concocting of efficiency compares craft beer natural to a soup that “Crew Republic has the lead. More springthat water with natural f lavors. improvements.Uludag produces all beverages, the beers, which may very well be should be served as freshly as possible. and more places are carrying their including itsby flagship Uludag Gazoz poured for you Johannes himself. If and BKK’s beers forgo filtering, pasteurizarange.” He adds that “they are quick to Uludag Limonata. you’re feeling cramped or fall in love tion, and stabilizing in order to maxinotice new flavor trends emerging in with the flavor, which is a likely out- mize the freshness as well as the flavor the beer world.” Despite Crew RepubThe German firm BUSE branded companies are traditional plant builders with over 90 and come, his creations can be brought experience. The brewery offers three lic’s aggressively marketing Gastek strategy GmbH &the Co.brewery KG, 120 years experience respectively in CO2 and dry ice home in generously sized growlers. IPAs: the “Amarsi,” a personal favorite of manages toofstay headquartered in Bad The merger will allow the expertise and product Jan Peter-Wulf ’s which is a caramel bittrue to the ethics of crafttechnology. ing, delivering Hönningen, mergingartisanal its portfolios ofeir both companies to be pooled and significantly ter yet malty-sweet IPA, The “Laguna,” high isquality brews. Th business divisions for CO2 production andplayful recovery plantdares you expanded. which is a fruity-pine, caramel-malt Crew tagline to “Join the Republic – “Join the construction and dry ice technology with Revolution! the Swiss company in particular to the complex field of CO2 American style IPA, and the “Mandari- Revolution” Craft Beer isThis Notapplies a Crime!” Asco Carbon Dioxide Ltd., headquarteredWith in Romanshorn. which requires a constant flow of innovative na” whose smoked malt compliments its so many emergingrecovery, beers joining Employees of BUSE Gastekagree working in these divisions solutions to meet citrus flavor. They also offer one Pale ale. Experts the craft craze,will it’s be important to keep in customers’ economic and environmental in microbrewing that After trying the selections you’ll be like- Crew mind thespecialist true values of craft, idealsjoint venture offers solutions for a wide range Republictohas a very promisingoffutransferred ASCO, a subsidiary the German demands.The ly to agree with Felix vom Endt who tells ture. which deeply Ger- whether natural sources, stack gas, brewing The Munich based brewery startup in industrial gases Messer Group. Based on salesare figures for entrenched of CO2in sources, Thailand presently imposes a 20% tax on MIXOLOGY he’s “sure we will drink a boasts many’s rich beer As other Billy Wagthe widest varieties 2013,one theofmerger will result in aamong competitive company withhistory.and fermentation processes, ammonia, hydrogen or beverages with 10% or more natural ingredient lot of more beers from BrauKunstKeller its an tells MIXOLOGY, “a beer doesn’t peers. Its seven include estimated annualvariations turnover of EUR 32 ner million. ethylene oxide production, or a host of other industrial content, and a 25% tax on carbonated in the next years”. have to be an IPA or a Pale Ale in order both IPAventure and double IPA asunder well as BrauKunstKeller – “Life is Too soft Theanjoint will operate the name Asco Carbon sources. to behis craft ”. In is not their original 11” German drinks mineral water. The government Short toand Drink Bad Beer” Dioxide Ltd,“Foundation with Marco Pellegrino retaining role asthe end craft “Thebeer merger will allow us to combine and expand our core onlydivisions about limited and lo-and pool our strengths,” enthuses ASCO pale ale, a hoppy andBUSE refreshing “Muis considering raising the ‘zero tax’ natural Managing Director. Gastek’s business Tank production competencies calFreezers, distribution butatabove all aboutDirector, the nich summer” beer, an extremely Alexander Himburg’s BrauKunstKeller content to 50%. Ready-to-drink tea beverages Service for Technical Gases and hoppy Cryogenic based Managing Marco Pellegrino. “This is a huge step love and careare thatnot goes for intoboth the parties, brew- and we look forward to working together andthemalty “Roundhouse kick”and imperial has and experts asare Felix vom Endt and from the fruitsuch juices presently exempt sites in Bad Hönningen Steinheim-Bergheim, ing.oflBuse stout, a more laidmerger back “Detox” gastronomy journalist and beverage (bmg) tax. The industry has pointed out that it would affected by the and will session remain part Gastek. and maintaining our status as a global player on the market.” ale,Asco and and an experimental “X 2.0” Barley consultant Jan-Peter Wulfa talking about be impossible to have tea drink with 50% or Buse Gastek share a similar heritage: both (bmg) wine. it’s superior brews. BrauKustKeller more of natural ingredients. com-

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Thailand considers raising soft drinks tax

Th a i l a n d

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should be served as freshly as possible. and more places are carrying their BKK’s beers forgo filtering, pasteurizarange.” He adds that “they are quick to tion, and stabilizing in order to maxinotice new flavor trends emerging in mize the freshness as well as the flavor the beer world.” Despite Crew Repubexperience. The brewery offers three lic’s aggressively branded marketing IPAs: the “Amarsi,” a personal favorite of strategy the brewery manages to stay Jan Peter-Wulf ’s which is a caramel bittrue to the ethics of crafting, delivering ter yet malty-sweet IPA, The “Laguna,” high quality artisanal brews. Their which is a fruity-pine, caramel-malt Crew Republic – “Join the playful tagline dares you to “Join the American style IPA, and the “Mandari- Revolution” Revolution! Craft Beer is Not a Crime!” na” whose smoked malt compliments its With so many emerging beers joining citrus flavor. They also offer one Pale ale. Experts in microbrewing agree that the craft craze, it’s important to keep in er trying the selections you’ll be liketrue values and of craft, ideals hasbottle a verycan promising fu- mind the ewAge BebidasAft introduces its Germânia 55 beer brand Crew in an Republic aluminum that is lightweight, shatterproof, ly to agree with Felix vom Endt who tells ture. The Munich based brewery startup which are deeply entrenched in Gerinfinitely recyclable. MIXOLOGY we will drink a boasts many’s rich beer history.the As FuBilly Wagof the varieties among Brazilian beer Germânia 55 he’s has “sure been launched in what is saidone to be thewidest lightest aluminum bottle in South America, lot of more beersisfrom BrauKunstKeller ner tells MIXOLOGY, “a beer doesn’t its type peers.to Its seven variations includebottle, sion bottle can from Rexam. The beer the first beverage of this be launched in the Fusion according to Rexam. Ocean Spray brand has now set its sights in the next have to be an IPA or a Pale Ale in order an IPA and double IPA as well as NewAge BrauKunstKeller – the “Life is Too “After success of Germânia 55years”. in 24-ounce cans, we believeboth the partnership between Rexam and (Bebidas) will score on the water market with PACt cranberry to be craft ”. Inthat the end craft beer is not theirtooriginal “Foundation 11” German Short to Drinkanother Bad Beer” goal. Fusion has brought another innovation opportunity the Brazilian market with a packaging option is sustainextract water, “the next generation of only about limited production and loale, a hoppy and refreshing able and has a youthful appeal,” explains Tiago Avena, Rexam’spale Commercial Manager in South “MuAmerica. Ocean Spray’s product portfolioAlexander that cal distribution but above all about the nich summer” beer, an extremely hoppy Himburg’s BrauKunstKeller Adds Rexam Marketing Specialist in South America Bruna Resano, “The aluminum bottle showcases the High Definition [printing] harnesses the cranberry in a refreshing love and careCzech that goes into the brewand malty “Roundhouse kick” imperial has experts such as Felix vom Endt and technology, which will further enhance the product’s premium and sophisticated visual identity.” Produced in the Republic new way”. PACt cranberry extract gastronomy water stout, a more laid back “Detox” session ing. l (bmg) journalist and beverage and bottled in Brazil, the Dialogstark, new packaging becameManager, available150 in supermarkets in July 2014. Germânia 55 is bottled and distributed by Beverage xale, 246 CC-en46-AZ215 09/14 contains proanthocyanidins (PACs): andmm, an experimental “X 2.0” Barley consultant Jan-Peter Wulf talking about NewAge Bebidas. powerful elements found inside cranberries wine. it’s superior brews. BrauKustKeller comthat are claimed to help cleanse and purify a body better than water alone. (bmg)

the beers, which may very well be poured for you by Johannes himself. If you’re feeling cramped or fall in love with the flavor, which is a likely outcome, his creations can be brought home in generously sized growlers.

Ocean Spray ventures into flavoured water

Brazil

Brazilian beer brand launched in lightest Rexam-can in South America

Keg and Fitting Service

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Germany

Respecting values in effective dialogue

Arcobrewery upgrades The mid-tier family-owned brewery has installed a new Modufill HES filler The with crowner from Krones AG plus Arcobräu brewery, a Krones Checkmat bottle inspecheadquarteredVolume in tor and the requisite conveyors. Germany’s Lower Brewery Director Holger Fichtel and Brewmaster Günther BreBavarian village of Moos, itenfellner attached particular has brought its bottling importance to the quality of the operations up to the very beer bottling process, based on exceptionally low oxygen pickup latest state of and maximised hygiene. the art. The Modulfill HES filler is an energyefficient, intelligent, probe-controlled filling system, without a vent tube, featuring a tubular ring bowl with 96 filling valves and an 18-head crowner, and prepared for subsequent retrofitting of a capper. With its rated output of 33,000 0.5-litre NRW bottles per hour, it is designed to handle both top- and bottom-fermented beers, and alcohol-free types as well. Thus capacity upsizing was not the aim of this investment. Double pre-evacuation with interpolated CO2 f lushing ensures minimised oxygen values: “With this technology, we can enhance the stability of the beer’s taste,” comments Brewery Director Holger Fichtel. Warm filling at temperatures greater than Keg Maintenance 15 degrees Celsius is also possible without any reduction in output.

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The product-friendly filling system of the Modulfill HES provides enhanced levels of hygiene and filling stability, minimizes fobbing, and ensures accurate fill quantities. The bottles are pressurized and vented via two separate gas paths, which prevents liquid passing from the filled bottle into the pressurisation channel, thus GNKS is powered providing considerable advantages in terms of filling stability and hygiene. During pressurization, no residual liquid can penetrate into the empty bottles. Unwanted fobbing and hygiene risks during filling are thus precluded. Hygiene safety is rounded off by an automatic cold gush-type jetting of all microbiologically relevant machine components. For Brewmaster Günther Breitenfellner, the line is unmatched in meeting the stringent hygiene stipulations involved.

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by: BrauBeviale 2014 Nuremberg, 11 – 13 November Stand 7A-514

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The Checkmat FM-HF installed downstream of the filler inspects the filled bottles for over- and underfills, with filling valve and crowner head assignments, and also incorporates a closure monitoring feature and logo detection for the crown. An entirely new Siemens S7 control system regulates all the bottle conveyors between the unpacker and the packer, including integration of the existing machines and conveyor systems. The empty-bottle inspector and the filler are monobloc-synchronised electronically, which enables the buffering times between the machines to be optimized. In the new bottle conveyors, only efficient, energy-economical drives are used. (bmg) CC-en46-AZ215 09_14.indd 1

15.09.14 13:20

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CRAFT BREWING

13 Whether its one of the Pale Ales or pares their cold-ones to fresh produce, Forecasting the future success of mia flowery Belgian Saisonal, you can taste an idea shared by Billy Wagner who crobreweries, Donald Burke predicts the care that goes into the concocting of compares craft beer to a soup that that “Crew Republic has the lead. More the beers, which may very well be should be served as freshly as possible. and more places are carrying their poured for you by Johannes himself. If BKK’s beers forgo filtering, pasteurizarange.” He adds that “they are quick to you’re feeling cramped or fall in love tion, and stabilizing in order to maxinotice new flavor trends emerging in (ElectroChemical Activated Water) technology is now notCrew only in the beverage industry, but also with the flavor, which is a likely out- The mizeECA the freshness as well as the flavor the represented beer world.” Despite Repubcome, his creations can be brought experience. Th e brewery off ers three lic’s aggressively branded marketing in numerous other sectors. Nevertheless, until today, the technology has not been affordable for every business. home in generously sized growlers. IPAs: the “Amarsi,” a personal favorite of strategy the brewery manages to stay The AGethics hasofdesigned a solution to remedy this situation. Jan Peter-Wulf ’s which is a caramel bit-German-based company aquagroup true to the crafting, delivering ter yet malty-sweet IPA, The “Laguna,” high quality artisanal brews. Their which is a fruity-pine, caramel-malt Crew Republic – “Join the playful tagline dares you to “Join the American style IPA, and the “Mandari- Revolution” Revolution! Craft Beer is Not a Crime!” na” whose smoked malt compliments its With so many emerging beers joining TheinECON is primarily designed for craft the craze, production of ECAtofor citrus Theyitsalso offerdevelopment: one Pale ale. the it’s important keepfiller in Experts microbrewing agree that the In the last quarter of 2014, aquagroup AG willflavor. presents latest spraying. In addition to the proven, patented technology of fixed-pipe Aft er trying the selections you’ll be likemind the true values of craft , ideals Crew Republic has a very promising fuECON system. “With the ECON system we want to give smaller businesses the opporly tosays agree with Felix vom EndtCEO whoof tells whicha mobile are deeply entrenched inInGerture. Th e Munich based startup filler flushing, thebrewery aquagroup AG offers spraying system. this tunity to benefit from our ECA technology,” Markus Zetzlmann, aquahe’s “sure we will drink a boastsrespect, rich beer history. As Billy Wagone of the widest varieties among many’s high levels of production flexibility are achievable via nozzle group AG. Established for over ten years MIXOLOGY in the ECA technology sector, aquagroup lot of more beers from BrauKunstKeller ner tells MIXOLOGY, “a beer doesn’t Its seven variations include supplemented branches that can be repositioned, or removed. AG develops and manufactures its high-quality equipment at its factory in Weiden. its peers. both an IPA and double IPA as well as have to be an IPA or a Pale Ale in order BrauKunstKeller – “Life is Too in the next years”. to be craft In the end craft beer is not their original “Foundation 11” German Short to Drink Bad Beer” The location of the mobile unit is flexible and”.requires limited space. The about limited production and lopale ale, a hoppy refreshing “MuECON is lowand maintenance, easy to only use and inexpensive, thereby ideal for cal distribution above all about the nich summer” beer, an extremely hoppy Alexander Himburg’s BrauKunstKeller smaller breweries and beverage operations, as largerbut investments are often love and carerequirements. that goes into the brewand malty “Roundhouse kick” has experts such as Felix vom Endt and not justifiable due to the imperial low daily consumption “Our goal was to so further develop the robust and stable devices of aquagroup so that stout, a more laid back “Detox” session ing. l (bmg) gastronomy journalist and beverage we can offer our customers a cost effective alternative.” Markus Zetzlmann explained, ale, and anthose experimental consultant Jan-Peter Wulf talking about For who have“X an2.0” evenBarley lower estimated consumption, the aquagroup “We have definitely succeeded withcomthe ECON. Through its simplified control system wine. AG ECA solution can also be purchased as canister goods. (ag) it’s superior brews. BrauKustKeller the ease-of-use is guaranteed.”

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No-fuss wine in a can for everyday consumption Great tasting, affordable wine, without pretension: that’s what winemaker Ryan Harms set out to create when he founded Union Wine Co. in Tualatin, OR, in 2005. Guided by what it calls a “Pinkies Down” philosophy, Union Wine offers three wine series—Kings Ridge, Underwood, and Alchemist—meant for everyday, accessible consumption. Says Union Wine’s website, “At Union we don’t get too caught up in wine scores, the best French oak barrels, or whether our sweater vest clashes with our ascot. We simply make good wines for our friends, and we embrace the challenges and excitement of the coordinates of where we reside.” In the spirit of this Pinkies Down mission, in 2013 Union Wine previewed its Underwood wine in a can at the annual Feast Portland Food & Wine festival. After receiving an overwhelmingly positive response, the company began making plans to bring canned wine to the market. “The craft beer movement took a lot from wine packaging as it came of age and continued to take it to whole new places, and we think we can shift some of our focus back to something that has more fun, rooted in craft but less stuffy,” says Harms. “Union is at the forefront of this ‘beerification’ of wine trend, a movement that aims to break down the pretense and formality often associated with wine drinking.” In June 2014, Union Wine launched two varietals—Underwood Pinot Noir and Underwood Pinot Gris—in a 375-mL recyclable aluminum can, supplied by Ball. The can is lined inside with an epoxy resin that acts as a lining between the wine and the aluminum, preventing any effects on taste from interaction between the wine and can. Harms notes that any trace amounts of BPA in the lining “are far below what the U.S. FDA has deemed safe.” Mobile bottling company Craft Canning performs the can filling operations. In terms of advantages offered by packaging wine in cans, Harms cites several. Among them, he says, canned wine costs approximately 40% less to package compared to the equivalent nine-liter case of wine in glass bottles. Canned wine also opens up the wine-drinking experience to new occasions and venues where bottled wine may be inconvenient, such as outdoor events or when portability is needed. Graphics for the packaging—consisting solely of the brand and varietal name in uppercase letters—replicate those used on the label for the bottled Underwood varietals. Designed by Story Manufacturing Co., they are meant to create a casual and comfortable relationship with the consumer. Harms explains the design approach: “We wanted to convey a sense of the mixture of old playbill posters with a more modernist design sense, reducing the typographic elements so it didn’t get too fussy. We wanted something that would intrigue and capture your eye, and look good in a hip coffee shop or an ultra modernist kitchen, but not be tied too tightly to either trend. This represents the reductive approach that the brand takes. Union reduces arcane processes to deliver something new. The design needed to have the energy of a new manifesto but one that comes from today.”

Coca-Cola renews Capri-Sun distribution contract

ASCO

apri-Sun has extended its partnership with Coca-Cola Enterprises (CCE) to handle the marketing, distribution and sales for the Capri-Sun brand in the UK, France, the Netherlands, Belgium and Luxembourg. The partnership between the two companies has lasted for twenty years. The first contract between Deutsche SiSi-Werke and CCE was signed in 1994 and gave the latter the right to market the brand in Great Britain. Since then, CCE has distributed the brand under the name Capri-Sun. In the ‘Britain’s Biggest Brands’ ranking, it has been placed within the top 100 over many years. CCE has been distributing the beverage in the unmistakable stand-up pouch in France since 2007 and in the Benelux countries since 2009. Deutsche SiSiWerke Betriebs GmbH is CCE’s contract partner in Great Britain, whereas CCE’s contract partner in France and the Benelux countries is Capri Sun AG, which holds the rights for all other European countries and is headquartered in Zug, Switzerland. Growing faster than the market “Our expansion strategy has proven itself effective for decades. In globalising the Capri-Sun brand, we focus on working closely with companies which already have a strong position in the beverage market in the respective region,” said owner Dr Hans-Peter Wild about the positive developments of the Capri-Sun brand in Western Europe. And in regards to the process of extending the contracts with CCE, he made the following statement: “We have established a strong partnership with CCE over many years.”

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Saudi Arabian water bottler to employ “fastest PET line in the world”

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Health Water Bottling Company expects to produce 134,000 bottles/ hr with new PET line to meet rising demand for bottled water in Saudi Arabia’s booming market. To meet the growing demand for bottled water in the Saudi Arabian market, Health Water Bottling Company (HWB), a leading bottled water supplier in Saudi Arabia producing water under the Nova brand name, has recently acquired a complete PET line from Sidel that will boast one of the fastest turnover rates in the world, according to the equipment supplier. With the new line, which embraces the last generation of Sidel Matrix™ equipment, HWB will be producing PET water bottles in 330- and 600-mL formats at a speed of 134,000 bottles/ hr by February 2015. In recent years, demand for bottled water (both still and carbonated) in the Saudi Arabian market has risen dramatically and is forecast to grow even further in future years. Off-trade sales volume of bottled water rose by 52.4% between 2007 and 2012, growing from 1,063 to 1,620 million liters sold, and has come close to surpassing the sales of carbonated beverages. The increase in demand has been attributed to the growing population of Saudi Arabia. The nation recorded a 2% increase in population in 2011, and water, being such a fundamental necessity, drove up the demand for bottled water. In light of this increasing demand, the turnout rate of Nova branded bottles is crucial, says Sidel. The new PET packaging line will allow HWB to stay at the forefront of this growing market by boosting its annual water production capacity, thereby sustaining its industry-leading position. During the 15-year relationship between Sidel and HWB, the water bottler has purchased different standalone equipment from Sidel, including blowing machines, fillers, and others. The company was operating lines that featured technologies from several different suppliers, which did not optimize the overall line efficiency in terms of energy cost and wastage. This is one of the reasons for HWB making the subsequent decision to choose one solutions provider for a complete line to ensure line performance. HWB says Sidel was selected because of its expertise in engineering know-how and the high performance of its equipment and services. role in Finance, Waller also leads The Coca- Cola Company’s Women’s Leadership Council and helped develop its highly successful Women in Leadership global program. Waller also serves on the ad- visory board of Catalyst, the leading nonprofit organization with a mission to expand opportunities for women and business. l (bmg)

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15 www.beveragemanager.net

pares their cold-ones to fresh produce, an idea shared by Billy Wagner who compares craft beer to a soup that should be served as freshly as possible. BKK’s beers forgo filtering, pasteurization, and stabilizing in order to maximize the freshness as well as the flavor experience. The brewery offers three IPAs: the “Amarsi,” a personal favorite of Jan Peter-Wulf ’s which is a caramel bitter yet malty-sweet IPA, The “Laguna,” which is a fruity-pine, caramel-malt American style IPA, and the “Mandarina” whose smoked malt compliments its citrus flavor. They also offer one Pale ale. After trying the selections you’ll be likely to agree with Felix vom Endt who tells MIXOLOGY he’s “sure we will drink a lot of more beers from BrauKunstKeller in the next years”.

r d e t -

ISSUE 10 OCTOBER 2014

page

Forecasting the future success of microbreweries, Donald Burke predicts that “Crew Republic has the lead. More and more places are carrying their range.” He adds that “they are quick to notice new flavor trends emerging in the beer world.” Despite Crew Republic’s aggressively branded marketing strategy the brewery manages to stay true to the ethics of crafting, delivering high quality artisanal brews. Their playful tagline dares you to “Join the Revolution! Craft Beer is Not a Crime!” With so many emerging beers joining the craft craze, it’s important to keep in mind the true values of craft, ideals which are deeply entrenched in Germany’s rich beer history. As Billy Wagner tells MIXOLOGY, “a beer doesn’t have to be an IPA or a Pale Ale in order to be craft”. In the end craft beer is not only about limited production and local distribution but above all about the love and care that goes into the brewing. l (bmg)

Oriental Brewery plans to improve BAD bouquet Crew Republic – “Join the Revolution”

Experts in microbrewing agree that Crew Republic has a very promising future. The Munich based brewery startup boasts one of the widest varieties among its peers. Its seven variations include both an IPA and double IPA as well as their original “Foundation 11” German pale ale, a hoppy and refreshing “Munich summer” beer, an extremely hoppy and malty “Roundhouse kick” imperial stout, a more laid back “Detox” session ale, and an experimental “X 2.0” Barley wine.

by In-Soo Nam, wsj

One

d Fitting Service at 201 s 4 t u nd # 201 i s Vi Sta 3th , / 1 ll 5 1th a H v1 No

me reduction

Cass’s

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of the frequent complaints you hear from foreigners in South Korea is that the food is great but the beer is well…just boring and sometimes stinky. Mindful of such a perception, the nation’s top beer maker, Oriental Brewery, said last month it will spend 120 billion won ($116 million) on improving quality control and, most importantly, removing bad odor from its best-selling beer, Cass.

Keg Management

Since June, the brewer has been plagued by online gossip that Cass smelled like disinfectant and shouldn’t be consumed by pregnant women. Chang In-soo, chief executive of Oriental Brewery, apologized for causing concerns and complaints among consumers over a strange odor in some of its canned, bottled and draft Cass beer. “We will do our best to bring the quality of our products to that of global brands such as Hoegaarden, Budweiser and Becks,” he said in a statement.

ss to Global Know-How

Oriental Brewery will spend 120 billion won ($116 million) on improving quality control (photo: Korea Times)

As part of such efforts, the company, which is widely known as OB in Korea, said it would

More implement information Anheuser-Busch InBev’s quality control process at production facilities.

www.gnks.eu In April, the global beer giant acquired OB, which accounts for about 60% of the South

ce & Life Cycle Management

Korean beer market, for $5.8 billion.

OB’s sales have fallen in recent months because of speculation that Cass smelled like disinfectant. The rumor went viral online and via social network services, and the brewer has requested a police investigation into the case.

d by:

As part of the probe, police officers last month raided the headquarters of Hite Jinro Co., OB’s biggest rival domestically, and confiscated documents and computer hard disks. Oriental Brewery had raised the possibility of its rivals being involved in spreading the rumor, but Hite Jinro denied a possible involvement by its employees. A Hite Jinro spokesman on Tuesday declined to comment. With reported consumer complaints over the odor in Cass, the Ministry of Food and Drug Safety looked into the case last month and recently said the smell was due to oxidization, which takes place when beer is stored inappropriately at high temperatures, and thus was harmless. The two local beer makers have been struggling with weak sales amid Koreans’ growing preference for imported beers. Beer imports totaled a record $50.8 million in the first half of the year, up 28.5% from a year earlier, according Korea Customs Service data.

www.proleit.com 2014-09-25_Beverage Manager_ProLeiT_150x246_dho.indd 1

26.09.2014 08:16:54

“Battered by the groundless rumor, our beer sales dropped considerably in the past few months. But now that we’re cleared by the government of wrong allegations against us, we hope for better sales,” said OB spokesman Oh Young-seop. (wsj/bmg)

www.beveragemanager.net

ISSUE 10 OCTOBER 2014 ISSUE 07-08 / JULY-AUGUST 2014

NEWS TOP

5Consumer

By An Hodgson, Euromonitor Analyst

USA

FASTEST

Diageo goes for gold with exclusive launch of Smirnoff Gold Apple

Beer Institute Urges FDA to Exempt American Brewers from Costly Regulation

Diageo Global Travel launch Smirnoff sance era. The even distribution of the Gold Apple, a new apple-flavoured ligold flakes is visible throughout the clear queur containing edible 23ct gold flakes. bottle, enhancing stand-out on shelf, the Smirnoff Gold Apple is the second release brand added. Diageo Global Travel and A COMPA RISON OF LL CONSUMER MARKETS IN from the Smirnoff Gold collection, fol- AMiddle East Global Marketing Director lowing the launch of Smirnoff Gold Cin- Steve White said: “White spirits is a key TERMS THEIR EXPENnamon in 2012. It will be OF available exclu-EXPECTED growth areaCONSUMER in travel retail where we can sively in travelDITURE retail outlets worldwide more value Diageo and for our ANNUAL REALdeliver GROWTH IN for 2014 REVEALS from March to September, at a recom- retail partners. Flavour differentiation is MARKETS THAT mended retail SOME price ofINTERESTING £26 for one litre,FAST-GROWING increasingly important to us in unlocking before rolling out in domestic markets. new growth opportunities. “With disARE NOT AMONG THE USUAL MAJOR EMERGING The drink uses a natural gum that cerning consumers in the channel seeking BRICS out exciting flavour experiences, adapts to theMARKETS bottle being(SUCH shakenAS or THE ANDnewTHE MINT). stirred, slightly thickening to form a rest- we are launching Smirnoff Gold Apple as ing liquid in order to keep the gold flakes a travel retail exclusive for six months besuspended. This key ingredient ensures fore it is introduced to domestic markets. comparison of all consumer markets in terms of their that liquid consistency when pouring It offers a great proposition for travellers expected consumer expenditure annual real growth in and drinking remains as smooth as any – an exclusive offering from the world’s somenumber interesting marketsWe thatare onefast-growing premium vodka. other Smirnoff variant,2014 the reveals brand exare not among the usual major emerging markets (such plained. The bottle features a golden ap- confident shoppers will love the flavour as the BRICS and the andMINT). the magic of the gold flakes and will ple adorned with a Baroque-style pattern, Of the fastestofgrowing consumer markets of 2014, Malawi it as a fitting celebratory drink or an said to be inspired bytop thefive orchards Eu- see Sierra somewhat surprising entrants ideal gift for friend’’ . lwhile ropean palacesand during theLeone Frenchare Renais(bmg)Turkmenistan and Saudi Arabia are fast-growing markets with sound ➢

The Beer Institute has filed joint comments with the American Malting Barley Association in order to protect a centuries-old and environmentallyconscious practice of brewers marketing their brewers’ grain to local animal producers. The Beer Institute has been working for more than a year with Members of Congress, regulators and allied organizations from dairy farmers to agriculture scientists in order to present a strong economic and scientific argument proving that it is completely unnecessary for the Food and Drug Administration (FDA) to add additional regulation to brewers’ spent grain and other by-products of brewing. The Beer Institute is the national trade association representing brewers of all sizes, beer importers and industry suppliers like hops farmers and can and bottle manufacturers.

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but could end if this FDA rule is upheld. Instead, some brewers will be forced to throw away this valuable feed, a cheaper option than complying with the costly proposed regulations, which the Beer Institute estimates may cost a single brewery more than $13 million in onetime and reoccurring costs. Chris Thorne, Beer Institute Vice President of Communications said: “This regulation is onerous and expensive, but really it’s just unnecessary. There has never been a single reported negative incidence with spent grain.” Thorne added, “We have had very positive conversations with the FDA and other concerned stakeholders making us cautiously optimistic.” The Beer Institute will continue following all developments with the FSMA and any proposed regulations that may impact U.S. brewers. l (bmg)

Markets in 2014

The National Milk Producers Federation also filed comments that expressly reference and include support for the Beer Institute’s comments. Brewers’ spent grain exist as a natural and necessary result of the brewing process. For centuries, brewers, large and small, have disposed on their spent grain by giving or selling them to farmers and ranchers. This recycling process supports community green initiatives,

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NEWS

Sierra Leone: Ebola •outbreak adds to major

strong income gains and consumer expenditure bolsters its appeal to businesses in all sectors. growth over the 2008-2013 period. The country’s Hotels and catering is tipped to be the best per- 5 total consumer expenditure is set to expand by forming consumer spending category, forecast to is also a market with promising prospects, but 14.4% year-on-year in real terms in 2014, supclimb by 15.6% year-on-year in real terms in 2014, its small population restricts meaningful market ported by the fastest annual disposable income real driven by a booming hospitality sector. expansion. growth globally. Next come miscellaneous goods and services, Although Sierra Leone’s consumer expenditure Rising incomes and a rapidly expanding middle which is expected to record a real upswing of growth in 2014 is forecast at 14.7% year-on-year class will create opportunities over the long term 14.0% in 2014 over a year earlier, on the back of in real terms (the second fastest expansion globand across many sectors. In particular, communigreater luxury spending and a more sophisticated ally), this West African nation has a market that cations, education, and leisure and recreation will financial scene. but could end if this FDA rule is upheld. Diageo Global Travel launch Smirnoff sance era. The even distribution of theboth The Beer Institute has jointdynamic com- sectors in 2014, as these are is even smaller than Malawi, in consumer befiled the most Instead, some brewers will be forced to Gold Apple, a new apple-flavoured ligold flakes is visible throughout the clear ments with the American Malting BarWith a relatively small market of 16.4 million number (6.1 million in 2013) and in total consumer typically driven by rising middle class demand. throw away this valuable feed, a cheaper queur containing edible the 23ctimpressive gold flakes. bottle, stand-out on Leone’s shelf, the ley Association to protect per a capita consumer expenditure consumers (as of 2013), growth in enhancing expenditure. Sierra consumer expenditurein order Turkmenistan’s option than complying with the costly Smirnoff Gold Apple is the second release brand added. Diageo Global Travel andin 2014, centuries-old environmentallyconsumer expenditure in this small, landlocked is set to reach US$4.3 billion equivalent and is set to reach US$3,594 in 2014, rising further to proposed regulations, which the Beer from the Smirnoff Gold collection, folMiddle East Global Marketing Director conscious practice of brewers marketcountry in Southern Africa is from a very low base. to US$688 per capita. The country’s consumer US$6,422 in 2020. Institute estimates may cost a single lowing the launch of Smirnoff Gold CinSteve White said: “White spirits is a key ing their brewers’ grain to local animal Euromonitor International forecasts that Malawi’s spending growth forecasts for 2014 as well as for brewery more than $13 million in onenamon in 2012. It will be available exclu- growth area in travel retail where we can producers. total consumer expenditure will grow by 18.2% the short term will likely be revised downwards, as time and reoccurring costs. sively in travel retail outlets worldwide deliver more value for Diageo and for our The Beer Institute has been working year-on-year in real terms in 2014 to reach US$5.6 the outbreak of ebola since the summer of 2014 is Chris Thorne, Beer Institute Vice from March to September, at a recom- retail partners. Flavour differentiation is for more than a year with Members of billion, which translates to a spending level of only adding to the challenges (including poverty, youth Mongolia’s total consumer expenditure is expected President of Communications said: mended retail price of £26 for one litre, increasingly important to us in unlocking Congress, regulators and allied organiUS$335 per capita (in constant 2013 prices) in 2014. unemployment, infrastructure deficit and corrupto grow by“This 11.8%regulation year-on-year in real terms is onerous and expenbefore rolling out in domestic markets. new growth opportunities. “With dis- zations from dairy farmers to agriculAsThe suchdrink a low uses level of spending inevitably leads to tion) that the country is already facing on its road in 2014, with per capita spending set to reach sive, but really it’s just unnecessary. a natural gum that cerning consumers in the channel seek- ture scientists in order to present a low consumer demand, business opportunities in to transition from conflict to peace and sustainable US$1,785 in the same year. adapts to the bottle being shaken or ing out exciting new flavour experiences, strong economic and scientific arguThe National Milk Producers Federa- There has never been a single reported Malawislightly can be thickening limited. Barriers to ainvestment andlaunching economic expansion. The country has theincidence smallest population (2.8grain.” negative with spent Smirnoff Gold Apple as ment proving that it is completely un- tion also filed comments that expressly stirred, to form rest- we are growth in Malawi are aplenty – including a general million people) of all the top five fastest growing ing liquid in order to keep the gold flakes a travel retail exclusive for six months be- necessary for the Food and Drug Ad- reference and include support for the Thorne added, “We have had very posishortage of foreign which affectsfore the it is introduced to domestic markets. ministration (FDA) to consumertive markets of 2014, which Compared to all the top fastest growing marconversations withcan therestrict FDA and add additional suspended. This keyexchange, ingredient ensures Beerfive Institute’s comments. country’s to pay forwhen imports, and poor infra-a great proposition for travellers regulation to brewers’kets meaningful consumer demand growth. making of 2014, posts the highest other concerned stakeholders It offers spent grainSaudi and Arabia that liquidability consistency pouring Brewers’ spent grainlevel existofas a natural structure (roads, energy telecommunications). Nevertheless, Mongoliaoptimistic. is one of the per capitaThe consumer expenditure, tobrewing ” world’s fastest Beer and and drinking remains asand smooth as any – an exclusive offering from the world’s other by-products of brewing. necessarywhich resultisofsetthe pro- us cautiously In theSmirnoff short term,variant, consumer in Ma- one premium vodka. We are Institute is the national growing and its economic growth over reach US$7,786 in 2014. has the larg- large The Beer Institute will continue foltrade associaother the market brand growth ex- number cess.Saudi For Arabia centuries, brewers, and economies lawi willThe be supported by thea country’s improved past decade into falling poverty est consumer marketsmall, in the GCC, US$241 lowinghas all translated developments with the FSMA confident shoppers will love the flavour tion representing brewers of all sizes, plained. have worth disposed on theirthe spent bottle features golden apeconomic (which will help to and raisethe magic of the gold flakes and will beer importers and industry risingand incomes for Mongolian consumers. As billion insuppliers 2014. Its large size, thethem toand any proposed regulations that may grain bycombined giving or with selling farmple adornedperformance with a Baroque-style pattern, incomes) and slowing consumer inflation Turkmenistan’s economic sustained such, the medium termbrewers. prospects the Mongosecond fastesters growth in annualThis disposimpact U.S. see it as a fitting celebratoryhigh drink or an growth like hops farmers andworld’s can and bottle and ranchers. recycling process said to be inspired by the orchardsprice of Eul for (bmg) (whichpalaces will raise consumer demand). an .eltended translated into lian consumer market are promising. able income and developed retail infrastructure, friend’’ manufacturers. supports community green initiatives, ropean during the French Renais- ideal gift forover (bmg)period of time has ISSUE / JULY-AUGUST 2014 nities 07-08 for consumer goods companies. Mongolia

challenges

Diageo goes for gold with exclusive launch of A small market growing Smirnoff Gold Apple

from a very low base

USA

Beer Institute Urges FDA to Exempt American Brewers from Costly Regulation

Mongolia: •Small population restricts

•

Saudi Arabia: A sophisticated consumer market with ample opportunities

market size

Turkmenistan: Robust •expansion over an extended

period of time

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ISSUE 10 OCTOBER 2014

15 START UP - US

By James R. Hagerty*

Breweries cite cheaper shipping, improved mobility and better seal than beer bottles

• By the time he reached his late 30s, Pete Rickert Jr. was fed up with supervising construction sites.

“I got tired of yelling at grown men all day to do their job right,” says Mr. Rickert, who lives in Danville, Pa.

A mobile craft beer-canning operation makes its local debut Then he read about the trend toward packaging craft beer in cans rather than bottles or jugs. Because most craft brewers can’t easily afford their own canning lines, a new type of company was popping up: mobile canners. These firms haul their equipment to breweries, spend a few hours filling cans, then move on to the next customer. Over the past three years, about two dozen companies have started offering mobile canning across the U.S. Mr. Rickert set up his own firm, We Can Mobile Canning, mainly funded from family savings, two years ago, and he now has 10 employees and operates in six states. His beercan-shaped business card lists him as “Head Six Packer.” There are plenty of potential customers: The Brewers Association says there are more than 3,000 breweries in the U.S., double the number a decade ago. Many craft brewers rely on customers who show up at the brewery to buy beer in glass jugs (called growlers) and on nearby taverns that buy kegs. Oskar Blues LLC, a Colorado brewery, shook up these rustic habits a dozen years ago when it began selling Dale’s Pale Ale in cans. Chad Melis, Oskar’s marketing director, says cans provide a better seal than bottles and prevent light from striking the beer, which can make it taste “skunky.” One hurdle is that many beer snobs associate cans with mass-market beer. Scott Smith, the owner of East End Brewing Co. in Pittsburgh, which plans to start canning soon, says some customers are “squeamish” about the idea. But, he says, as more craft beers are sold in cans,

“more and more people are getting over that.” Cans allow brewers to save money on shipping. Anchor Brewing Co. of San Francisco, which recently started canning its California lager, says a case of cans weighs about a third less than a case of bottles. About 2,000 cases of cans fit into a shipping container, compared with 1,350 cases of bottles. Anchor says it costs roughly $2 a case to ship cans of beer by truck to the East Coast, compared with about $3 for bottles. As a large craft brewer, Anchor has its own canning equipment. Many smaller brewers lack the space or funds needed to buy the equipment. Much of the mobile canning equipment in use comes from Wild Goose Engineering LLC of Boulder, Colo., whose stainless-steel lines start at around $86,000. That provided an opening for Pat Hartman. He worked in sales for a technology-services company, and he signed up for a brewing course in California in 2011. While taking the course, he heard about mobile bottling services for small winemakers. Mr. Hartman decided to provide a similar service for brewers. He and a partner used $150,000 in savings to start Mobile Canning LLC of Longmont, Colo. Around the same time, Lindsey Herrema, Jenn Coyle and classmates at the Presidio Graduate School in San Francisco hit on the same idea. They tapped friends and family in 2011 and came up with about $200,000 to buy canning equipment, a trailer to carry the equipment behind a pickup truck and labeling gear. Now their San Francisco-based firm, Can Van LLC, packages beer for more than a dozen brewers. Dan Blatt, a special education teacher, was

surprised a few years ago when he visited a tiny craft brewer in Colorado and was served beer in a can. He set up a company, Buckeye Mobile Canning, in Amherst, Ohio, which began operations in September 2013. Though he is still teaching, the 43-year-old hopes to retire from that within a year or two and focus full time on canning. “We are crazy busy,” he says. The hard parts of these new ventures include long drives and the unpredictability of brewers’ schedules; beer isn’t always ready when expected. Canners also have the expense of carrying large inventories of cans and other materials and must know how to fix machine malfunctions. “If anybody’s getting in this business to make a million dollars and have a cushy job, this is not for them,” says Ms. Herrema of Can Van, whose founders sometimes work seven days a week. Mr. Rickert had to fix his machinery after faulty seals caused cans to split open and spew beer on the floor. One recent morning, a white Ford pickup belonging to Mr. Rickert’s firm, We Can, pulled up alongside Lavery Brewing Co. in Erie, Pa. The canning equipment, which weighs about 500 pounds and takes up as much space as a three-seat sofa, was in a 16-foot trailer.

can before sending it on for a rinse and packing. It took about six hours to fill 5,520 cans. The brewery, founded in 2009 by Jason Lavery and his wife, Nicole, relied for the first few years on selling its beer mainly in kegs and jugs. The Laverys started canning in May 2013, which allowed them to reach more outlets, including supermarkets and beer retailers in several states. Output has doubled in the past year to about 100 barrels a month, and about a third of the beer is now sold in cans. Mr. Rickert plans to set up a second mobile crew and is going into the business of making mobile-canning equipment. He is working in partnership with his father, Pete Rickert Sr., a retired union official. Until joining We Can, the elder Mr. Rickert says, “I was used to emptying the cans, not filling them.” (wsj) *) Business Editor / Source: WSJ

Sales Outsourcing in Europe

Three of Mr. Rickert’s employees, young men in khaki shorts and black rubber boots, set up the machinery inside the cramped brewery, which occupies a former plumbing-supplies warehouse.

Your business partner in 28 countries.

Lavery’s Dulachan ale shot through plastic tubes into bright green cans manually fed into the line. The machinery twisted a top onto each

combera-group.com

10827_ANZ_Sales_Outsourcing_Europe_RZ.indd 1 19.08.14 18:16

www.beveragemanager.net

ISSUE 10 OCTOBER 2014

Latin American market holds tremendous appeal ALTHOUGH MANY MARKETS ARE CHARACTERISED BY THE EXISTENCE OF A SINGLE DOMINANT PLAYER, THE SUCCESS OF CCU IN ARGENTINA AND A-B INBEV’S BUDWEISER IN COLOMBIA INDICATES THAT THIS NEED NOT BE A COMPLETE BARRIER TO GROWTH FOR OTHER PRODUCERS

e Latin American beer sector is generally characterised by high consumption and high growth making it one of the most attractive regional markets for multinational beer producers. The economic slowdown has curtailed demand to some extent, but given the high rate of growth between 2002 and 2007, BMI (Business Monitor International) experts expect this to only be a short-term phenomenon, with consumption once again advancing at a rapid pace once the economic outlook improves. In most countries the sector is highly competitive, although this is often due to the dominance of a single leading player, rather than the existence of a truly competitive market. This makes market entry difficult, but, given the potential rewards on offer, multinational brewers continue to invest to expand their reach and forge partnerships with local operators to get their brands into the hands of consumers that are increasingly keen to experiment with premium and foreign beer varieties. Brazil is the region’s largest beer market and is dominated by Anheuser-Busch InBev, which controls around 69% of the market through its AmBev subsidiary. This dominance is achieved through extensive tie-ups with bars, restaurants and retailers, allowing AmBev to sell its products, most notably Brahma and Skol, at a price significantly above those of its rivals. In the first half of 2009, AmBev’s Brazilian unit posted mixed results, with a weak Q1 but a much stronger Q2. This makes it hard to determine where the market will be going in the rest of the year, although there are signs that AmBev is expecting a tough 12 months. In March AmBev announced it is to close a factory in the state of São Paulo and shift production to its other plants in the state. Although AmBev insists that the decision has been taken on cost grounds and its volumes will not be impacted, BMI believes the move is partly a response to a reduced rate of growth being recorded in the beer sector and industry developments that have had a disproportionately adverse effect on the brewer. AmBev’s decision to close the plant may not have an impact on the firm’s current production volumes, but will surely make a dent on its total production capacity and implies that AmBev does not believe it will be in need of this extra capacity in the near future. ➢

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by offering a number of the world’s most desirable premium beer brands, including those owned by joint parent Heineken and others, such as Guinness, sold under license. In Latin America economy and mass-market brands from international brewers usually have to compete against better known local brands that are often cheaper. This drives down margins and means that many brewers started to recognise that the premium end of the market is often the most attractive emerging market segment. While this trend may be temporarily put on hold in light of the economic downturn, it is still expected to be one of the most important forces driving sales growth in 2010 and beyond.

from the downturn in the economy, AmBev has been shaken by a tough new law against drinking and driving, which disproportionately affects the firm as it derives a higher percentage of its sales from the on-trade market than its competitors and by a new tax regime that will see alcohol taxed on the basis of a beverage’s retail price. As AmBev’s products sell at prices that are around 30% higher than the country’s other brewers, it will feel a greater impact from the new tax regime than its competitors. AmBev may choose to respond by increasing prices which will put further downward pressure on volumes. Despite these negative developments, in the first quarter of 2009 Brazil was a strong performer for AmBev with sales rising by 7.6% to reach 17.8mn hectolitres, offsetting weaker performance in other parts of Latin America. This strength was attributed to two sustainable factors: an increase in the minimum wage and a reduction in food price inflation. However, it was also attributable to favourable weather and a late carnival which limits the extent to which this result can be extrapolated over the rest of the year. Nevertheless, the fact that volumes did not decline, despite Brazil facing its first recession for years, is an indicator of the resilience of the sector. BMI expects beer sales to stagnate in 2009, but expects growth to quickly return in 2010 and this pattern is expected to be replicated across most markets in the Latin American region. The country’s second largest brewer is privately-owned Schincariol, while FEMSA Cervejas Brazil takes the number three position. FEMSA Cervejas Brazil is controlled by Mexico-based FEMSA, although Heineken has a small stake in the business which could signify as yet unfulfilled ambitions in the Brazilian market. The dominance of AmBev has made other multinational brewers reluctant to attempt a full-scale launch in the country. However, given the market’s size and growth prospects Schincariol is often talked about as being an attractive target, either for FEMSA or a multinational brewer with the size and courage to take on AmBev in its own back yard. Given its existing interest in the market, and its limited exposure to emerging markets (when compared to other multinational brewers), Heineken could be considered the ideal suitor. The firm has previously said that it is reluctant to overpay for emerging market assets, but the downwards pressure on asset prices since the onset of the economic downturn would make now a good time to strike. Certainly the Brazilian beer sector does not look fully consolidated and we expect further merger and acquisition activity over the next few years. Many other Latin American markets are even more highly concentrated than Brazil. SABMiller is a leading player in several countries through its purchase of Colombia-based Bavaria in 2005. This acquisition gave SABMiller a virtual monopoly in four Latin American markets - Colombia, Peru, Ecuador and Panama. This market dominance made Latin America one of the firm’s most profitable locations, with profit margins up to 50% higher than in other regions because of its ability to influence retail prices. SABMiller’s progress in Colombia provides a good example of the power of a multinational brewer to build upon what, at first glance, looks like a relatively unattractive market. When it entered Colombia per capita consumption of beer was low and

stagnant; beer drinking was frowned upon by wealthier consumers and many of Bavaria’s brands were often regarded as the same product packaged differently. It launched a successful marketing blitz which included differentiating Bavaria’s portfolio of brands and launching the premium Italian brand Peroni to encourage beer to be seen as an aspirational product. This strategy has been roughly replicated in the firm’s other Latin American markets. However, although these moves have successfully boosted consumption, they have also made the market more sophisticated and opened consumers’ eyes to the wide range of beers available from around the world. Since 2005 the level of competition has gradually been increasing in all of these markets. For example in Colombia the firm is under pressure from the growing popularity of imported beers and in particular from US brewing giant A-B InBev’s Budweiser brand. AnheuserBusch launched Budweiser in Colombia in 2006 through an arrangement with the country’s largest retailer Exito. Budweiser quickly became one of the most popular beers in Colombian supermarkets and the success of this venture encouraged A-B to broaden its distribution channels. In February 2007 the firm entered into a distribution agreement with Heineken which saw Budweiser become available in bars, restaurants and familyowned retail outlets. These developments demonstrate that the relative immaturity of many markets mean that opportunities exist for multinational brewers with strong brands, even if the market is dominated by a single firm which looks to have established an unassailable leading position. The progress of Chile-based Compañía Cervecerías Unidas (CCU) in Argentina is another example of this pattern. The firm is jointly owned by Dutch brewing giant Heineken and Quiñenco - a Chilean business consortium - and in both Chile and Argentina it is particularly strong at the premium end of the market. In Chile CCU leads the beer market with a 33% share, but in Argentina the company is up against tough opposition in the shape of Quilmes, owned by A-B InBev, which controls around 75%. However, CCU has carved itself a niche and has successfully grown to become the country’s second largest brewer with around 18% of the market. This has been achieved

CCU’s performance in the first half of 2009 gives an interesting insight into the state of the Argentine and Chilean markets. Overall the firm reported a 4% rise in volume sales for the first half of 2009, following an upturn in the Chilean beer market in the second quarter. However, progress in the Argentine market appears to have stalled with volume sales down by 1% compared to growth of 31.5% in the first quarter (see chart three). The resilient performance in Chile in the second quarter of 2009 is in line with our forecasts for the country’s beer sector. Large fiscal reserves make the country relatively well-placed to cope with the global economic downturn and it is among a handful of Latin American countries not expected to slip into recession in 2009. Although consumer spending has retracted in line with a drop in confidence, spending on alcohol is not expected to drop significantly over the year. In contrast we have long predicted that Argentina’s economy is unstable and believe the expansionary policies of the last five years have left the economy poised for a harsh and prolonged recession, and CCU’s results could indicate a tipping point somewhere between the first and second quarters of 2009. Although Argentina’s economic activity index continues to show expansion, data on industrial production, retail sales, construction output and imports suggest that the economy is slipping into recession. Although we will have to wait for CCU to publish its full first half results (due in the first week of August) to ascertain exactly why the firm’s Argentine beer sales have fallen so far so quickly, this result could certainly be an ominous sign for what was always an inherently risky market. In conclusion, the dynamic growth in consumption across the region between 2002 and 2007 indicates that Latin America continues to offer some of the best opportunities anywhere in the world. We see the current stagnation in beer consumption to be a short-term phenomenon for the majority of Latin American markets, although some, including Argentina and Mexico, may take longer to return to growth. Although many markets are characterised by the existence of a single dominant player, the success of CCU in Argentina and A-B InBev’s Budweiser in Colombia indicates that this need not be a complete barrier to growth for other producers. As the region’s largest market, and also one of the most dynamic, Brazil will continue to attract the interest of the world’s major brewers. However, whether 2010 will be the year when one of them chooses to take on the might of the world’s largest beer company and launch a bid for privately owned Schincariol remains to be seen. Outside of Brazil the opportunities for expansion through acquisitions look less intriguing. The leading players in each market are likely to continue to mop up small, independent producers. However, for most producers expansion is likely to be driven by distribution and licensing deals with current operators, with both Latin American and multinational firm’s keen to extend the reach of their most high profile brands. (bmi/bmg)

BrauBeviale

Nuremberg 11-13 Nov. 2014

Visit us

Hall 7 A Stand 510 next to Krones!

www.beveragemanager.net

ISSUE 10 OCTOBER 2014

Emerson introduces new System Plast NG Evo chain for dry, high-speed conveying in beverage processing product is lower-friction, tougher and more elastic than original NG chain. Extensive array of corrosion resistant bearings exhibited as well. Emerson’s Power Transmission Solutions business will introduce its new System Plast NG™ Evo conveyor chain at Brau Beviale 2014 (Hall 7), and will also exhibit a wide variety of bearings engineered for beverage industry applications. The new NG Evo chain is made from a proprietary, low-friction material for dry high-speed conveying. “NG Evo builds on the success of original NG chain, which is already widely used in the bottling industry,” said Jeff Himes, System Plast Senior Product Manager. “The new chain provides a higher breaking load, greater elasticity, lower coefficient of friction and much greater abrasion resistance than the original. All of the physical properties of the original NG chain have been enhanced. NG Evo significantly expands options for dry conveying to meet

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sustainability and water conservation goals, which will grow in importance for beverage processors worldwide. Beverage handling conveyors are typically lubricated with soap and water that uses two to three times more water than goes into the finished product. There are obvious costs for this, but the hidden cost for wet conveyor is in the slip hazard, pumps, leaks and premature failure of bearings, sensors and other conveyor components. NG Evo chain also reduces the costs and energy for water reclamation and treatment, and eliminates the wear paste buildup caused by mineral-oil-based dry lubricants.” The companion Nolu®-S wear strips and guides enable reduced-lubrication or lubrication-free, high speed conveyor operation. They are made of a unique resin with a solid lubricant that dramatically reduces the coefficient of friction. Nolu-S helps reduce noise, energy consumption, squeaking, and chain pull/belt fatigue. The combination of NG Evo chain

and Nolu-S wear strips can reduce a conveyor’s energy requirements by up to 30 percent, with service life as much as five times greater. System Plast mounted bearings for the beverage industry are built with corrosion resistant thermoplastic housings of reinforced polyamide. A variety of popular housing styles is available, including pillow block, flanged, tapped base, hanger and take-up, with 400-series stainless steel or 52100 bearing quality steel inserts, packed with H1 food grade grease. Optional end caps and backside seals provide added protection for wash-down applications. Emerson, based in St. Louis, Missouri (USA), is a global leader in bringing technology and engineering together to provide innovative solutions for customers in industrial, commercial, and consumer markets around the world. To learn more, visit www.emerson-ept. com or Corrosion Resistant Bearings. (em)

Mixing and palletizing

MIXING, PALLETIZING AND LOGISTIC EQUIPMENT FOR THE BEVERAGE INDUSTRY BEVERAGE INDUSTRIES REQUIREMENTS IN INTRA LOGISTIC EQUIPMENT ARE VERY AMBITIOUS AND CHANGING DURING THE PAST YEARS.

High production volumes, a wide variety of products, new product packages and more demanding requests from the markets are marking the beverage industry. In the past years PET – packages are substituting glass bottles, the significance of beverage cans is growing. Reclusively the growing numbers of PET-bundles are changing the selling methods and the offers to the customers from the trading side. All these requirements are creating high and special demands on the machinery and the equipment of the bottlers. Particularly the demands from the trading site, the supermarkets and the discounters, are growing enormously. Are the offers of homogenous pallets with one beverage product are enough in the past years, big traders and discounters demand mixed pallets and a huge flexibility from the beverage industry today, which is challenging even bigger and global players. The demands require appropriate machinery and equipment. This equipment and machinery has to achive beverage industries customer requirements. Especially the soft drink industry and the water and mineral water companies with the manifold products and distribution channels have to match these requirements. Mixed PET-beverage packages on pallets to achieve customer´s demands One of the biggest and leading soft drink producers worldwide was asked to deliver mixed pallets of soft drinks. This means that different kinds of soft drinks are even in the layers of beverage pallets. The challenge was to find a supplier to mix and palletize 4 products on one pallet with different layers in an efficient way. After an evaluation, the soft drink maker found project Automation & Engineering GmbH to solve this ambitious task. With project´s long and deep experience in mixing, sorting and palletizing equipment and project management in the beverage industry, the project design team evaluates, collects the data and the demands of

both sides, the soft drink producer and the trading companies, for a high output solution. The result of the evaluation and the design is a multilayermixer with a palletizing and a wrapping station. This station is able to mix, palletize and wrap up to 7 products, while the request was to process only four different products. The output of the station, with four pallets income is 150 layers per hour, 90 pallets 600 by 600 or 45 pallets 1200 by 800. Addicted to customers order, the requested pallets are formed by project´s software which regulates the mixing of the pallets, the percentage of the ordered beverage kinds and the number of the layers of every pallet. By this system the soft drink maker is able to react very quickly and just-in-time. In the complex four sorted pallets of soft drinks arrives at the incoming station at one time. The beverages are packed onto display pallets (due to handling reasons at the point of sale), but were treated as one normal euro-pallet. Before the pallets are automatically unpacked, they are separated to remove the shrinking foil. Afterwards they are merged together again and treated as one Euro-pallet to unpack and feed the products into the site. In this section the beverage packages are gripped by a project PROPAL 9600 layer palletizing portal system and put it on a four line conveyor to separate each soft drink package, one line is one kind of beverages. The carton pads of the unpacked pallets are gripped by project´s layer gripper and put in an intermediate magazine. The beverage products were feeded to the multilayer former. Before the products arrived at the layer table, they passed the adjustment station. To adjust the products is important to get an optimized layer. The adjustment station is a high tech device, due to the requirements of the customer. Three fingers are gripping the package and turn it as it is necessary for an optimized layer. This kind of adjustment is different to the common way, because of thinner foils the customer wants to avoid any damage of the package. On the layer table a stacker pushes the products to lead to an opti-

mized layer. Now a project PROPAL portal system equipped with a venetian blind gripper grapp the layer and put it on the pallet. The major advantage of the venetian blind gripper is the gentle transport of the layer to the pallet. The packages are taken from the bottom which do not destroy or damage the package. The packages are transported to the display pallets (Duesseldorfer Pallet). After palletizing, the pallets are wrapped by project´s PROWRAPP. Then the display pallets are pooled and treated as one Euro-Pallet and are ready for the transportation. Other innovative solutions for smaller and medium sized companies in the beverage industry project develops and delivers also solutions for smaller and medium sized companies. Like automatic and semi-automatic depalletizing assets for bottles and smaller case packers for smaller production environments. For a smaller German distiller project developed a semi-automatic depalletizer for the treatment of different kind of bottles to feed the bottling machinery. The challenge was to find a solution to fit for a couple of different bottle forms with small diameter. Project Automation & Engineering found a solution with its vacuum gripping head. The operator puts the gripping head manually over the bottles on the pallet and starts the lift and can take the carton sheet away. The lift puts the bottles now automatically on the conveyor table and the feed of the bottling machine starts.

project Automation & Engineering project is an innovative group of companies in Kranenburg near Duesseldorf, Germany. project’s line of actions covers the complete line of secondary packaging, materials handling, service and all fields around. project’s wide range of products extends from carryhandle applicators, adhesive labeling machines, palletizing machines, portal robots, materials handling equipment, production equipment to special purpose machines.

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www.beveragemanager.net

ISSUE 10 OCTOBER 2014

China and China The four days of the fair have shown once more that the beverages industry in China is rapidly gaining significance.

A total of 708 (2012: 674) exhibitors from 25 countries (2012: 21) took part in CBB 2014, which was held on approximately 80,000 square meters of exhibition space. 248 of the exhibitors came from outside China.

is especially pleasing to report that this year there has been a further improvement in the quality of the sections at the exhibition and that there were considerably more products and equipment on show at the booths of the exhibitors. The visitors came not only from the beer and soft drinks industries, but also increasingly from the milk industry and from distilleries – a fact that further underpins China Brew & China Beverage´s reputation as the leading trade fair for the beverage and liquid food industry in Southeast Asia. Dr. Reinhard Pfeiffer, Deputy CEO of Messe München International, was satisfied with the outcome of this year´s fair: “The four days of the fair have shown once more that the beverages industry in China is rapidly gaining significance. Together with our Chinese partners we have succeeded in once again raising standards, above all in terms of visitor quality.” In view of the ever increasing number of visitors from the Southeast Asia region, Dr. Pfeiffer sees the move from Beijing to Shanghai as a logical conse-

continues its success quence: “Now is the right time. With this move we expect to be able to reach out even more effectively to the beverage industry in China and Southeast Asia.” Volker Kronseder, Board Chairman of Krones AG, was particularly impressed with the good organization of CBB: “We would like to say that the event China Brew & China Beverage is an important component in our KRONES trade-fair calendar and we are already looking forward to the next event in this quality in Shanghai. We thank all those involved for looking after us and for the successful implementation of this project.” A similar comment came from Olaf Mueller, Vice President, Food and Beverage, Pentair Filtration & Process: “I think CBB is excellent. We are extremely happy with the outcome of the exhibition, especially for the first two days. A lot of decision-makers from local Chinese enterprises and expanding international groups visited our booth. And we also met some visitors from Southeast Asia. So we have customers here and they are middle managers and technical people, as well as commercial decisionmakers. I would say CBB really has very high-quality visitors.” (cbb/bmg)

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