Colorado small businesses are less likely to change health insurers for the upcoming year, even as they anticipate continued price increases, according to the second-annual Delta Dental of Colorado Small Business Survey.
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Tops on the list these days are another fermenter to help increase production and large serving tanks so the taproom can quit pouring out of kegs. As with the owners of many growing breweries in the region, the father-son duo of Bob and Steve Jones know that the path to continued growth and efficiency is tied largely to bigger equipment and the automation of processes.
Making beer, after all, isn’t all that different than any other manufacturing process. Increasing scale increases production per worker.
Locally, the difference in the number of barrels brewed per employee between the regional breweries (those that brew 15,000 barrels per year or more) and the microbreweries is striking. The reasons are multiple, but automation and scale are the biggies. New Belgium in Fort Collins brewed 792,000 barrels in 2013 and has about 520 employees, creating a ratio of 1,523 barrels per employee. Pateros, meanwhile, brewed 600 barrels with its 10 employees.
All of which isn’t to say the smaller breweries aren’t getting a lot of work out of their workers. At Pateros, Steve Jones oversees brewing, operations and procurement and helps with taproom management. His father handles business management and finance and oversees sales. There is one full-time brewer, a brew-house assistant who does local deliveries, two sales people, a taproom manager and three taproom workers who also help with packaging or whatever other tasks might arise.
“When you’re small, you definitely wear a bunch of hats,” said Steve Jones, who opened Pateros in 2010.
Not that the big breweries are just adding equipment and not jobs. New Belgium added about 50 employees last year, and chief executive Kim Jordan expects the same this year.
But as Bart Watson, chief economist for the Boulder-based Brewers Association, noted, the number of non-brewing jobs such as sales and marketing tend to proliferate as breweries grow. Meanwhile, brewing lots of different beers, as small breweries do as they experiment and tweak recipes, takes a more hands-on approach.
At Pateros, tasks such as emptying the mash tun and sanitizing fermenters is much more labor-intensive than at the larger breweries. Jones knows precisely, for instance, that it takes his employees eight minutes to crush each 50-pound bag of grain, which means about two hours is spent on the task for each batch of beer in Pateros’ 10-barrel brew house. But when Pateros brewed a collaboration beer with New Belgium recently, all of that grain crushing took about 15 minutes in New Belgium’s mill.
“We’re a much more manual brewery than just flipping a switch and letting it go,” Jones said. His operation typically makes one to two batches per day, roughly half of the four to five batches that larger operations might produce.
Jones said a full-time lab person, another sales rep and an assistant brewer all are on the hiring list fairly soon. But his brewery is capped right now on fermenter space, and will need to add tanks to brew more beer.
Founded in 1991, New Belgium started with a 4.25-barrel brew house before moving up to a 20-barrel-per-batch system. A 100-barrel system was added in the mid-1990s. The brewery now uses the 100-barrel system as well as a 200-barrel brew house added in 2002. That’s in addition to a 10-barrel system and half-barrel system used for smaller experimental batches.
During the past two years alone, New Belgium has invested $30 million in added fermentation capacity, bright tanks and other equipment.
“Those types of equipment purchases make a big difference,” Jordan said.
Brewing beer on a 100-barrel system, after all, doesn’t take many more people than on a 20-barrel system. But the amount of beer produced climbs exponentially. Instead of brewers, the types of employees New Belgium adds these days include sales analysts, chemists, hops buyers, social media specialists, sales trainers and someone who sources malt as the brewery is increasingly able to specialize employees’ job functions.
Those types of positions don’t financially make sense for smaller breweries to add.
Noting the rapid growth of the craft beer industry, some new breweries have made the large upfront investment to start with bigger equipment, anticipating that the demand will be present for them to ramp up production quickly. Sanitas Brewing in Boulder opened last year with a 15-barrel system, while 4 Noses Brewing in Broomfield started this spring with a 20-barrel system.
Not everyone, however, is focused on exponential growth. Boulder’s Twisted Pine Brewing is one of the oldest craft breweries in a town full of them. Yet the award-winning brewery, now in its 20th year, brewed just 4,500 barrels last year and is planning to brew only about 5,000 this year.
“We have made a conscious business decision to stay relatively small,” Twisted Pine owner Bob Baile said. “For one, we really like the craft aspect of the brewing industry.”
Twisted Pine has been around long enough that the brewery has been able to add certain people and equipment – such as its own bottling line in 2002 – that have added plenty of efficiency to its operations over time.
The main thing his brewery hasn’t done, Baile said, is add larger brewing equipment. Twisted Pine still brews on the same 15-barrel system it’s had since 1997. While Twisted Pine does distribute its beers to 12 states, the brewery’s primary focus is supplying its ale house. Twisted Pine employs 25 people, although about 10 of those are devoted primarily to the brewery’s onsite restaurant.
Baile said part of the allure of remaining small – despite forgoing some of the economies of scale that would come with more growth – is the ability to experiment and try new beers. Twisted Pine, he said, prides itself on coming up with 120 to 150 different concoctions each year, something he worries wouldn’t be possible if the focus were on churning out huge batches of three or four mainstays for widespread distribution.
“We like to say we put the craft in craft brewing,” Baile said.
Joshua Lindenstein can be reached at 303-630-1943, 970-416-7343 or firstname.lastname@example.org. Follow him on Twitter at @joshlindenstein.