Category: Supply Chain

Drafting a Solution

Have you seen this keg? That’s a question many wholesalers, retailers and brewers will be asking on the Brewers Association’s new website KegReturn.com. Launched at the beginning of this year, the website’s goal is to help the industry get back all those misplaced kegs.

Over the past four years or so, the association has also been working on a practical solution to this problem.

“The issue of keg loss and keg theft is a perennial problem,” says Chris Swersey, technical brewing projects coordinator. “It’s very costly.”

Through the formation of a sub-committee of the Association technical team, they have been able to tackle how to better understand the problem and come up with a solution. Brewers Association members were surveyed early on in this process and it was discovered just how much monetary loss brewers suffer from disappearing kegs.

Keg loss costs craft brewers between $0.46 and $1.37 a barrel of annual keg production. To put that into perspective, if a brewer sells 1 million barrels in one year that amounts to a total capital charge of $460,000 to $1.4 million a year.
“That’s an extraordinary amount of money for a small business to have to eat. That’s another unintended tax almost,” notes Swersey.

KegReturn.com will serve as a database of sorts where brewers, wholesalers and retailers would be able to upload information onto the site about their companies and their kegs including contact information (they’re encouraged to list a point person as opposed to a general info email or phone number) and photos that could be searched by individuals who have kegs or scrap yards that end up with misplaced kegs.

The process is straightforward and takes minutes to search and send an email to a party that could be missing a keg, says Swersey. “It’s a very complex issue,” he says. “We are not sure of all the exact places that kegs go when they disappear, but we do know that they end up in some amazing places.”

Causes for loss could be attributed to a number of different things: theft, misplacement and misconceptions among consumers or home brewers.

For instance, Swersey explains that paying a $30 deposit on a keg doesn’t convey ownership of that keg. (A keg costs between $140 and $160, he estimates.) The deposit is designed to incentivize returning that keg. “There is a misconception that with the deposit you are buying that keg. You are not. That keg always remains the property of the brewery,” he says.

He adds, “We are learning as we go and we are hoping that our members are able to get some of their kegs back. We don’t see this as the (end-all) solution. It’s a first step. What we’d really like to do is raise awareness of the issue, get some kegs back to their rightful home and make this part of an ongoing industry conversation.”

There are technologies and programs out there offered by companies that can assist in this issue as well. Whether that’s renting kegs or tagging them for tracking purposes or other innovative programs, the conversation has started and will continue.

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