The craft beer and craft spirits industry once was seen as a basement-level business, but both industries have grown and the varieties of products have dramatically expanded. Continued growth requires a move to higher ground and a more sophisticated production process.
It is that move that is challenging continued expansion of the craft beverage business, said PMMI in its recent report, “Craft Breweries and Distilleries: Machinery and Automation Report”, presented by PMMI at the recent Pack Expo in Las Vegas. The full report is available at the PMMI website under its “Business Intelligence” tab.
The machine builders and OEMs are critical partners in the growth of the industries, the report found. “Craft producers are looking for a truly collaborative partner that can not only offer machines uniquely suited to their environment, but can also grow with their production needs,” PMMI officials said in a report released in conjunction with the Brewers Association.
Issues such as space restrictions; low-cost, flexible machines; and the need for more automation in bottling, labeling, and packaging pose challenges as the craft beverage industry tries to scale up to meet demand.
The report states that while growth in craft brewing has slowed, it is also a more mature venture than the distilleries. While overall beer sales fell 1% in 2017, according to the report, craft beer sales rose 5% in the same year. Craft spirits manufacturers have seen a 15% increase in the number of distilleries in 2018 and a 30% increase in revenues to just over $3.8 billion.
For both growth trends to continue, operators say they need better and more flexible equipment that not only matches their current size, but will grow into the future. And they do expect to grow; the report found 62% of small and mid-sized brewers and distillers will increase capital equipment spending in the next two years.
Industry leaders challenged OEMs to provide those kinds of solutions. An Illinois-based craft producer was quoted in the report as saying, “We need the OEMs to understand the challenges we face operating in a small space and offer small-scaled automation equipment.”
And a Minnesota-based beer and spirits owner was quoted as saying, “We look to the OEMs to provide information on phasing in new equipment; we need modular equipment that can be installed in phases.”
The report cited five areas of concern for craft beverage companies:
- Space constraints
- Implementing automation
- Packaging considerations
- Small-batch changeover
The report concluded that OEMs ready to meet these industry challenges will find companies ready to spend.
“When it comes to machine builders, the craft beer and craft spirits industries have the same overall desire: both are seeking an OEM that takes the time to understand the unique needs associated with producing craft beer and spirits,” the report concluded. “When an OEM is not fulfilling these requirements, or when a machine is ill-suited for the needs of the craft industry, producers are more than willing to seek out other suppliers in order to find a solution. OEMs with an intimate knowledge of the craft beer and spirits industries, as well as a post-sale working relationship with their craft customers, will be best positioned to retain customer loyalty.”