Thursday, December 8, 2022

Canning is becoming the future of small brewery distribution

Part II: How canning and smaller taprooms are changing brewery industry norms

WILMINGTON — It’s canning day for the Savards, a routine the couple is still getting used to. Every three weeks or so, the couple and their crew gather in Wilmington Brewing Company’s warehouse for a full day of canning.

Michelle Savard owns the brewery with her husband, John. So far, they’ve distributed twelve generations of the 16 oz. cans and have sold out every case since they started canning.

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At least six people are required to man the machine, which has the capacity to produce up to 23 cans per minute. The staff spends an eight-hour day on their feet manning the machine, rotating out shifts to keep things interesting.

“Putting beer in a can is better for the beer,” Michelle said. “It’s darker, it keeps it fresh longer, that’s where the market is going.”

She isn’t alone in her bet. The industry is shifting away from growlers and gravitating toward smaller batch, convenient packaging.

Fresh off the line

Long gone may be the days of filling your growler. Sixty-four ounce growlers are “not the hot topic anymore” according to Kate Smith, a loan officer for Live Oak Bank’s wine and craft beverage program. 

They can be clunky, they can go flat, and while many craft beer locations still offer them, they’re quickly going out of style.

With “smaller brewers moving more forcefully into cans” according to the Brewer’s Association, a national non-profit organization that gathers and dissects national craft beer data, local breweries have incorporated canning lines into their business models.

Kevin Zelnio walks through Wrightsville Beach Brewery’s cooler, where they store their canned beer along with kegs they sell to bars and restaurants across the region. (Port City Daily photo / JOHANNA FEREBEE)

For Wrightsville Beach Brewery, which opened this January, canning was incorporated from day one.

“It was designed around doing canning,” head brewer Kevin Zelnio said. “You can buy cans here and we’re in all sorts of places around town, restaurants and bottle shops, and hopefully soon to be other places regionally.”

Though canning is only 10 percent of the brewery’s total operating capacity right now, according to owner Jud Watkins, it’s a supplementary distribution model, with room for growth.

Wrightsville Beach Brewery cans its brew as need be, and stores what it has in its cooler, which also hosts a variety of kegs that end up on taps in supply shops and bars around town.

Profit off the pint

Like any brewery, the meat of Wrightsville Beach Brewery’s sales come from straight off the pint.

“It’s your highest profit margin so it makes more sense. You can do a lot of things in-house that restaurants and other places might not be as open to, different styles and experiments,” Zelnio said.

Breweries have been popping up across the country more and more over the last decade, with the brewpub model increasing in popularity. Data provided by the Brewers Association. (Port City Daily graphic / JOHANNA FEREBEE)

Brewers generally make around 90 percent profit when their product is poured straight off the pint.

For Flying Machine, set to open in 2018, the founders are planning a combination of in-house pours and, eventually, a move toward regional distribution.

“We’re going to pour as much beer for our taproom as possible,” co-founder David Sweigart said. “Naturally, that’s your bread and butter, that’s what really connects you to your community, that’s where your customer really connects with your beer.”

Michelle Savard kept this in mind while Wilmington Brewing Company made the move to expand to its canning line.

“The further you get away from the tank, the less money you make,” she said.

Still, breweries often end up with excess supply, and with a constant demand to switch up your style, brewers in town say packaging your brew is a means to cut potential losses and market outside your neighborhood.

Size matters

“The market is going into small, neighborhood breweries — at least that’s what we think,” Michelle Savard said.

The wholesale beer game peaked in 2010-2011 according to Untappd’s senior business analyst Harrison Hickok. Now, smaller taprooms and the brewpub model, a restaurant that sells its own beer, are becoming increasingly popular — and financially safer options.

For Wrightsville Beach Brewery, the brewpub model is just another way to keep customers coming back and staying in-house for their brew.

“That’s all you need to be, you can be a neighborhood brewery just like a neighborhood bar,” Hickok said.

The overhead and necessity to move an enormous amount of beer onto shelves across the region have left some owners and investors with their hands tied. There was — and is — a fight for tap heads in bars and restaurants as the number of craft options remains steadily on the rise.

“The further you get away from the tank, the less money you make.”

“I don’t think anyone coming into this industry is trying to become a big brewery,” Hickok said. “You can’t, you can’t do it anymore just logistically, from the supply side, you can’t get enough hops, good hops, to make enough beer to be big.”

Hickok says a brewer’s safest bet in 2017 and beyond is to keep people in the taproom and make as much off the pint as they can.

Is there room in this market for more breweries? Find out tomorrow morning with our continuation of the Port City’s brewery scene.

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