British craft beer and real ale is seeing increased demand around the world, not just in traditional markets, but also new markets such as Russia, China and Brazil. This represents a great opportunity for British micro-breweries, however it can also pose a challenge when it comes to exporting beer over long distances due to the limitations and costs of steel kegs. In this article, we’ll look at how micro-breweries are opening up export markets through the use of cheaper, non-traditional keg designs, and how this might affect your production line and coding solution.
International demand for British craft beer is booming
Demand for British craft beer is growing. Figures from HMRC shows that in 2013, 20.6 million more pints were exported compared to 2012, resulting in a total of 1.15 billion pints being exported. This growth has not only been seen in traditional markets such as the US and Belgium, which accounted for a record £147 million and £93 million in export sales respectively, but also in emerging markets such as Russia, seeing growth of 45%, Brazil with 37%, and China at 15% growth in export sales. As a result of these export sales, UK breweries generated £630 million for the UK economy in 2013, an increase of 16% since 2010.
What Are The Challenges Of Exporting For Micro Breweries?
Despite a growing taste for British craft beer and real ale around the world, it can be difficult for smaller breweries to tap into the export market due to the cost of exporting far afield. One of the most prohibitive costs for a micro-brewery is having to maintain a fleet of steel kegs to get their product into pubs and bars in new regions seeing rapidly growing demand.
There are a number of reasons why maintaining a fleet of kegs can be very costly, particularly for smaller breweries. Firstly, the high initial cost of a steel keg needs to be taken into account, which then needs to be protected by RFID and GPS tracking to avoid theft or loss of the keg. Next, between uses each keg needs to be extensively cleaned which can run up a large bill, thanks to the use of between 10-14 litres of water, chemicals, the upfront costs of cleaning machinery, and labour costs.
Then, transportation costs need to be taken into account. A steel keg weighs between 6-7 kilos, adding cost to the outbound trip, which can really escalate over long distances. On top of that, the empty kegs then need to be returned, adding another unnecessary expense.
Smaller breweries then need to consider that since the distances involved in international exporting are longer, it can take more time for kegs to return to be refilled, which as a result must be compensated for by purchasing enough kegs to keep up with demand. The result again, is higher costs and potentially slimmer profit margins.
What Are The Alternatives?
An alternative to the steel keg is the plastic one-way keg. These kegs are essentially super-sized soft-drink bottles found in supermarkets, designed to carry liquids under pressure, typically in sizes of 15, 20 and 30 litres.
These one-way kegs offer a number of advantages over steel kegs, especially for breweries looking to export their product. Firstly, the cost per keg is a great deal lower, meaning lower upfront costs. Next, since these kegs are designed for single-use, there is no need to invest in any cleaning equipment or buy extra kegs to account for delays in customers returning kegs.
One of the biggest areas for savings to be made is in transportation costs. While a steel keg weighs around 6-7 kilos, a 30 litre plastic keg weighs around 400 grams. The result is that approximately 4,000 more litres of beer can be loaded on per delivery – an increase of 30%, while costs associated with return delivery can be eliminated altogether.
There are environmental benefits on top of the reduced emissions from transportation, since the plastic keg can be recycled once it’s been emptied by the customer.
So where are the savings made for breweries? The break even point between steel kegs and plastic kegs can vary by individual situation. Since savings are made in transport costs, breweries exporting over long distances can benefit the most, as well as those who export shorter distances but don’t have their kegs returned very frequently.
How do Plastic Kegs Affect Your Coding Solution?
Many Linx customers already code onto their steel kegs using CIJ printers. For example using a black ink which can be removed through an alkali wash before the keg is re-used. CIJ printers are also an ideal fit for plastic kegs using Linx Black PE ink 1130, which works with all PE, PP, PET plastics. If you’re thinking about switching to plastic one-way kegs and want to ensure that your coding solution will work with them, get in contact here and request a sample code on your product.