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When should a microbrewery start bottling its own beer?

When is the right time to start bottling your own beer?

I have been working with micro breweries for a number of years advising them on bottling their own beers.

One of the major challenges microbrewers are facing, when growing organically, is moving on from the first phase when the start-up microbrewery only kegs the beer.

In this article, I’ll examine some of the key factors that affect the decision to move to in-house bottling, and some of the pitfalls to avoid.

Want to read later? Click icfs.to/bottle to download a PDF version of this article.

Filling kegs is easy

Everything seems straightforward. You make your beer recipes and you put them into kegs and sell them to other pubs, or mainly in your own pub or restaurant.

The margins created by retailing your beer instead of selling it wholesale have sustained the growth of microbreweries. This successful approach has succeeded in generating phenomenal growth in the industry.

Wholesaling only has downsides, mainly for those micro breweries that do not have their own direct chain of distribution. Those without direct distribution have struggled in the past and are the micro breweries most likely to disappear.

Microbreweries without their own direct outlets are those that have tended to fail first over the years. The need to have a substantial distribution network was recognised immediately for example by BrewDog in Scotland, and Whitewater Brewery in Northern Ireland, two of our first clients.

The turnover rate in the industry is well known to be high mainly due to lack of sufficient capitalisation. This has improved recently with seed money looking for a share of a growth industry, but overall capitalisation is still critical and financing is still fragile.

The important initial capital outlay required to open a microbrewery needs a rapid growth of sales and margins to sustain the business.

You have to have a guaranteed high margin from your own distribution from the very start, or you will need deep pockets to sustain the start up from zero.

Brewdog were positioned away from major markets in Peterhead. They quickly moved to acquire aggressively and set up a network of pubs to sustain their growth in production with direct sales. The same was true for Whitewater Brewery, which was born to serve initially the group’s four local restaurants.

So once you have distributed your beer in your pubs what next?

Many of your clients will also want to enjoy their favourite beer at home or on a picnic. And you need to serve them, or they will buy their tipple from the competition.

The trend of consumption away from the pub into the home is general and is diffused worldwide and that plays against you limiting yourself only to producing kegged beer.

Therefore you need to satisfy this type of consumption by offering bottled beer, pretty soon after starting your brewery.

And here is the challenge!

Initially the quantities to be bottled are relatively modest - maybe only 500 or 1000 bottles at a time for each of your various recipes.

Initially, therefore, the easy way, although an expensive way, is to contract bottle outside the premises. This seems the way to go.

But when you actually contract bottle for a few months you find out the disadvantages:

  1. You need to transport your bulk beer to the contract packer. It costs money.
  2. You need to transport the bottled beer back to your premises. It costs more money.
  3. The minimum run of production is often larger than what the brewery would like or can afford, and will be expensive for a small run. More money.
  4. Often, the bottling windows you are offered don’t suit your own schedule for when you want to do bottling.
  5. In the end, the actual cost of contract bottling is often eating out all the modest margin made on each bottle.

Conclusion: Outside contract bottling allows the micro brewery only to hold on to its customers beyond their direct distribution, but without realising any real profit margin.

This applies also in a lesser way to the mobile contract bottling trucks who generally offer a better service than a distant, external co-packer.

But you're still at the mercy of the schedule offered by the contract packer. This will very seldom satisfy your marketing requirements and your order books.

So where to go from here?

Here’s the positive case for in-house bottling - in-house bottling offers clear advantages from a marketing point of view:

  • You can bottle your recipe batch immediately in kegs and following rapidly with bottling in glass bottles, so as to completely utilise your production batch in optimal conditions.
  • You can plan an emergency bottling in peak season, if required by demand, without depending from an external co-packer, who most probably will not be able to fit you into their busy schedule at peak times.

The challenges of in-house bottling:

So what do you do when you have decided to bottle in house?

  1. First assess carefully your financial and human resources requirements.
  2. Bottling in-house requires generally more money than you initially think.
  3. Do your sums carefully. Make a realistic sales and production costs budget .
  4. In your capital budget, take into account all accessories required for example a carbonating unit, extra pumps, a labelling machine, a packing area.
  5. Is space available? (Sorry, a cupboard is not enough space for a bottling unit!)
  6. Human resources and training. You are a successful brewer with technical knowledge of processing your beer. You are happy that your business has developed, and you're now ready to buy a bottling plant. But that does not make you a bottling engineer.
  7. To learn how to make the best of your bottling equipment will take time and money, and it will be a steep learning curve.
  8. Do not lose heart. All microbrewers that are currently bottling their own beer in house have gone through this experience. However don't be too cocky, ask for advice, and look for an expert bottling engineer who can assist you on site initially for a few days if you can. It will save a lot of aggravation, and it will be money well spent.
  9. At the end of the road, at the bottom of the rainbow, there is a bright pot waiting for you.

What type of bottling plant to buy?

The big question. It is actually the final answer to a series of questions you need to pose yourself.

  1. How much money do I really have available for the bottling plant?
  2. What levels of production do I really require? Manual systems bottling and labelling systems can offer up to 500 bph with only two to three operators.
  3. Automatic filling systems can start from 1,000 bph but with three times the budget of the manual ones.
  4. Can I maintain in-house bottling quality comparable to my kegged beer?
  5. A good rule of thumb is that if you don’t have at least two days a week of guaranteed bottling volumes for an automatic plant, you would be better off with a manual system.

My suggestion is to start small with a semi-automatic plant, get a year or two’s experience at bottling operations, and move on to bigger automatic plant in phase two.

Unless you have a guaranteed large market to serve immediately, and a significant amount of money available, (at least $ 150,000), automatic bottling should not be the first choice for the microbrewer.

Four key questions to ask about Beer Filling Machines

Assuming we are talking of carbonated beer (not bottle conditioned beer), the things to watch out for when choosing your bottling plant are mainly the following:

1) Can I get real counterpressure filling?

A lot of small filling machines are not really filling in counterpressure, but only by differential gravity. This latter method is cheaper and easier on the wallet than counterpressure filling, however any small change in beer temperature becomes immediately critical and a cause for foaming and overspill from the bottles for obvious reasons.

To keep the beer in the bottle there must be a pressure differential in the filling tank of over 0.8 to 1 bar more than the level of carbonation of your beer. Gravity differential filling works on just 0.1 to 0.2 bars more, and this means that you have to continuously adjust the settings, and getting foam at the drop of a hat. Stay away from it if you can. It’s cheap and nasty.

2) Can I keep my beer cold?

Whatever “they” may say, you really need to chill your beer down to +2C (+35F) if you wish to get trouble free bottling conditions.

3) Does the equipment have real pre-evacuation of air from the bottles?

Oxygen contamination is definitely the killer of bottled beer quality. When the bottles arrive in the brewery they are full of air. Air is 21% Oxygen.

During a normal filling operation beer is sent inside the bottle at 90 degrees from the vertical axis by means of diffusors, which direct the beer jet against the side walls to minimise turbulence. This avoids the creation of foam as much as possible, but laminates the flow of beer and creates a vortex of air inside the bottle, exposing the thin blade of beer to extensive contamination of Oxygen.

Double pre-evacuation of air ensures that the bottle is filled with practically ONLY CO2 before the flow of beer starts.

This ensures maximum stability over time for your bottled beer and extended shelf life.

What is pre-evacuation of air?

Pre-evacuation of air is the operation by which a vacuum pump extracts the air it contains from a sealed bottle. The filler subsequently injects CO2 to pressurise the bottle, allowing the isobaric or counter-pressure filling to start.

Why insist on double pre-evacuation?

A single pre-evacuation of air leaves invariably a certain level of the initial oxygen inside the bottle.

While irrelevant for water and most soft drinks, this level is still significant for Beers, Ciders and also quality Wines.

Therefore the initial pre-evacuation needs to be repeated TWICE while the bottle is hermetically sealed, to ensure that the level of oxygen, left prior to start filling, is irrelevant from a quality point of view.

As an indication, industry standards accept 60 ppb (parts per billion) as a good acceptable level of residual oxygen in bottled beer.

Check out this aspect carefully in the equipment you are offered: a lot of lower end manual equipment does not offer pre-evacuation at all or only offers single pre-evacuation. But they don’t always tell you this!

4) Is there foaming before capping to reduce oxygen pick up on the machine?

When choosing your bottling machine make sure there are suitably efficient foaming devices prior to capping.

You have taken a lot of care to fill your beer using double pre-evacuation of air from your bottle.

But as soon as the bottle is full, it is released onto the conveyor to go to the capper. During this short trip, the neck of the bottle fills up again with air. Oxygen is back.

If nothing is done to reduce it, the oxygen left now in the neck of the bottle will significantly reduce the shelf life of your bottled beer.

So check out what your supplier proposes to do to avoid this situation occurring.

The most common method used to maintain the product integrity from filling to capping is to position a warm water fine spray jet over the passage of the bottle on its way to the capper. The warm water fine spray reacts with the top of the beer in the bottle’s neck, elevating its surface temperature and making it foam lightly.

The foam builds up inside the neck, pushing out the little air in it. You are now safely ready to cap your bottle.

Once finished with bottling and capping operations, your bottle needs a quick fine spray to eliminate any foam left on the outside, ready for drying and labelling.

Bottling versus Canning for a micro-brewery

A lot of noise has been made recently about the increase of craft brewers who are now canning their beer as well as kegging and bottling it.

The questions a micro brewer should ask himself and give a serious thought to are really basic stuff:

  • What packaging comes first after Kegging? Bottling or Canning?

Most brewers will say Bottling unless you are a rare breed that can afford both packaging methods, bottling should come first.

Bottling in glass allows to enhance the perception of buying a quality product, closely associated with the premium price of a craft brew. It is resisted by the supermarkets but undoubtedly does the works for the craft brands.

No quality wine or premium vodka is bottled in PET bottles, why should a quality Craft Brew be put in a can?

  • Does Canning instead of Bottling enhance my Brand positioning?

Most Craft Brewers would say no to this statement. Packaging in a glass bottle helps justifying the higher premium price that can be obtained, together with the flavour. In the premium mineral waters market, the restaurant trade is almost exclusively packaged in glass bottles. The same water packaged in a glass bottle commands a substantial premium over the same water packaged in a PET bottle. Why should Craft Beer be any different?

  • Is a can more convenient packaging than glass?

This is true also of a multilayer PET special bottles with an Oxygen barrier, that is why big brewers are pushing PET multilayer bottles in open air venues and for sports occasions. They could promote cans instead, but they have realised that to keep intact the quality image advertised for their mass brands, they need to compromise and choose an expensive PET bottle instead. Big Brew’s strategy is to push down a road where small brewers cannot compete in the quality of the canning with the multi-million canning lines the big brewers have.

  • Is a PET multi-layer bottle more difficult to bottle than glass? Does it require another bottling line just as canning does?

The short answer to this question is no, you can bottle PET on your existing glass line.

PET multi-layer bottles are substantially more expensive than glass bottles, but they can be packaged on the same glass bottling line without any changes.

In my next article I will talk about pasteurising tunnels versus sterile filtration, and pre-and post filling labelling.

Meantime, Cheers!

  • Want to read later or share with colleagues? Click icfs.to/bottle to download a PDF version of this article.

Giovanni Solferini is the Managing Director of IC Filling Systems, which has supplied bottling, labelling, and packaging equipment for water, soft drinks, beers, wines, spirits, food sauces, chemicals and toiletries since 1994.

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For more information, contact our Sales Director Marco Solferini on sales@icfsgroup.com or please call on +39 035 046 0297 (Italy) +44 1865 520 083 (UK) or +1 707 236 6353 (US).  (10-10-17: Due to current US wildfires, please use +1 415 671 6220). Alternatively, use our chat mechanism at the bottom of the page, use our quick contact form or request a quotation.