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The Financial Case for Brewery Automation: Part 1

From an operational perspective, there are two important reasons to install a more powerful brewery automation system: improve production efficiency, and reduce downtime. Improving efficiency can be further broken down into reducing beer and packaging losses.

In this three-part series, we will take a close look at each of these elements, and explore exactly how much value a robust, brewery-specific automation system can deliver. We will discuss beer loss in Part 1, packaging losses in Part 2 and downtime reduction in Part 3.

Sources of Beer Loss in Plant Production

At the plant level, beer losses can be the result of raw material wastage, or direct losses of liquid. Here are some of the more common inefficiencies:

Loss of raw material

  • Incomplete emptying of bulk containers
  • Spillages
  • Excessive removal in pneumatic systems
  • Carelessness in weighing of hops
  • Overdosing or incorrect application of ancillary materials (e.g. copper agents, alginates, chillproofing enzymes, adsorbants)

Loss of liquid

  • Over-boiling and leakages
  • Incomplete wort drainage from spent hops and trub
  • Sub-optimal fermentation processes
  • Inefficient methods of yeast separation

As a brewer, this list probably looks familiar to you. You’ve likely encountered many of these problems and have already made some attempts at managing them. In our experience, though, such efforts are rarely enough on their own. Even small amounts of waste can add up quickly when you’re scaling up operations, so it’s critical to have a more systematic approach.

How Much Beer is Wasted at the Plant Level?

To get a better idea of the size of the problem, let’s have a look at some numbers.

Industry observers estimate that beer loss in the average plant hovers around 5-10%. We can thus assume an average loss of 7.5%. That already sounds pretty bad, but it gets even worse when you consider it in terms of dollars and cents. That’s because the financial impact of this waste is multiplied by the loss of margin from shipping, excise taxes and other miscellaneous costs en route to your distributors.

Put another way, the correct way to consider this financial waste is not in terms of lost raw materials plus brewing costs, but by the final price you would charge a distributor for that lost beer. Now consider that the average 12oz six-pack of craft beer sells to wholesale distributors for about $4.75. That means that $19,633 of beer is wasted per 1,000 barrels of production, at the plant level alone!

And the important thing to remember about this number is that it is pure profit, not just gross sales. So assuming a margin of 20%, a 1% reduction in waste results in a 5.4% increase in profit.

The Big Impact of Small Improvements

From this analysis, it’s clear that reducing beer losses in plant production can have an outsized impact on the profitability of your brewery.

The good news is that a powerful, integrated automation system can help you to cut down on this waste significantly. It is also a systematic solution that will prevent problems from happening, so that you will not have to spend all your time putting out fires, and can instead focus on the craft of brewing great beer.

In the next article, we’ll examine the other main source of waste – packaging losses – and take a closer look at how automation can improve your production efficiency.

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