Key points
- New facilities
- Improved efficiencies
- Maximising assets
- Green initiatives
- Tough trading means a good head for microbreweries
Getting ahead in the drinks business isn't easy these days when you need to know your KPIs (key performance indicators) from your CIPs (continuous improvement process), while ensuring effective MRO (maintenance repair operation) and MES (manufacturing execution systems). Fortunately, specialists are on hand to steer brewers and distillers in the right direction.
Times they are a-changin' for the UK distillery industry, with whisky in particular riding a wave as demand grows in Asia, South America and Africa. Previously mothballed distilleries are being brought back into play, and the major drinks manufacturers are investing for the long-term.
Spirits production needs to be lean and green these days, with distillers simplifying their supply chains and streamlining operations while maximising energy efficiency and cutting waste.
Driven by branded whisky's appeal as a status symbol in emerging markets, whisky producers in Scotland have earmarked £2bn in capital investment over the next three years, according to the Scotch Whisky Association.
New Facilities (Return to top)
Diageo, having invested £105M over recent years at its Cameronbridge site, is building a new distillery north of Speyside to produce 45M bottles of blended whisky annually.
Pernod Ricard-owned Chivas Brothers is planning a new Speyside distillery as part of its £40M-a-year expansion, which included, in June, reopening the mothballed Glen Keith whisky distillery in Speyside, from which an annual 6Ml of blended whiskies are to be exported.
Another mothballed Scottish plant, Tamdhu, is to be relaunched this year by new owner Ian Macleod Distillers to make a premium, malt whisky brand while, in the Brecon Beacons of Wales, Penderyn Distillery is to treble its malt whisky throughput.
Meanwhile, in June, the Scottish Executive meanwhile awarded grants to five whisky firms for new distilleries and storage facilities. Among them is £1.7M for the Adelphi Distillery in Ardnamurchan, to set up a 'green' operation combining minimum environmental impact with maximum efficiency.
"From a production point-of-view, it's fair to say a lot of the big distillers are running at full tilt at the minute," says Gordon Bennett of Brammer, a pan-European supplier of industrial maintenance, repair and overhaul (MRO) products. "They can't make whisky fast enough."
Improved efficiencies (Return to top)
With growth, however, comes potentially complex supply chains and fragmented plant operations. Brammer works with its clients, including Chivas Brothers, Diageo, Heineken, AB InBev and smaller, regional operations, to boost production efficiency, and reduce component acquisition costs and working capital.
It uses team resource management (TRM) and lean manufacturing principles from the Japanese car manufacturing model to solve problems, improve efficiency and remove bottlenecks; for example, repositioning parts beside engineers' work stations to cut transportation time.
For clients purchasing parts individually from local sites without any buying leverage, Brammer is able to cut costs by consolidating vendors.
"We can put a person on site to integrate with engineering teams and identify solutions," says David Cullern, key account manager for soft drinks, beverage/brewing & ingredients.
Other commercial solutions range from replacing a drive belt changed four times a year with a better belt costing twice as much but only requiring replacement annually, to saving as much as £10,000 a year lost in compressed air leaks by a simple £500 repair job.
Reducing the large volume of spare parts some manufacturers hold across their sites can release capital back into the business, says Cullern, while consolidation and reduction of invoicing can further reduce costs.
Engineering and electronics supplier Siemens is also welcoming strong trade from the drinks industry for its computerised manufacturing execution systems (MES) and launched a specialist, dedicated food and beverage team in April. MES clients include SAB Millar and Diageo.
Maximising assets (Return to top)
"A lot of firms are looking to maximise their assets in terms of more flexible manufacturing," says Paul Daniels, business development manager for food and beverage at Siemens. "These days, not many companies are looking for a line that can only handle one thing. Our integrated approach gives clients a better lifecycle."
Distillers and brewers are looking for reduced downtime on flexible lines offering operator interfaces and integrated drive capability, with capacity to handle different bottle and pack sizes. "Siemens' motion control system, Simotion, helps them do this," says Daniels.
Siemens has just introduced the Simatic S7-1500 controller for maximising productivity and engineering efficiency in applications such as drinks production. Updating the S7 range first introduced in 1996, the new model "will take us forward for the next 10 years or so", says Daniels. "It gives us the ability to move forward with integrated diagnostics, which are very important, and integrated servers operating in real-time. It's important for customers; they can receive an alarm or a report on their smart phone or email."
Green initiatives (Return to top)
Aligned with enhanced production efficiency are green issues, including rising energy costs and water conservation. "Energy is a big focus," says Daniels. "Reducing costs is a focus area of our value services. Siemens can offer energy reports with points of action." Solutions include monitoring water usage, and options for reusing it in other areas, such as clean-in-place (CIP) systems to reduce the overall cost of plant.
Lorien Engineering Solutions, a supplier of process, packaging or complete systems to the global drinks sector, finds that much of its work is focused on reducing energy and water usage.
Traditional brewing techniques are undergoing a revival as a result, says Ian Murfin, engineering process manager, although such systems can be easier to put into new plants than to retrofit.
Brewers are looking to reuse water or recover heat to mitigate, for example, the process of creating 'wort', which typically accounts for 20–40% of energy expended during brewing.
"Everybody is very conscious of key performance indicators (KPIs) for energy and water," says Ian Cartwright, business development manager for Lorien. "Nobody cared 1520 years ago but then there was a big awakening to the fact that it costs to let water run down the drain. A lot of money can be saved by better housekeeping."
Lorien is also seeing growth in business from distillers, with control of 'waste streams' a key priority. "One client needs to increase capacity, as they can't keep up with demand," says Cartwright. "It's quite a vibrant market."
Will the boom in spirits hold up? With sales flat or declining in the UK and continental Europe, continued growth is dependent on emerging markets for which Investec's June Spirits report sounded a note of caution.
Caution should perhaps not go unheard by the distiller that recently told Brammer business was so good, saving cash was not an issue.
Tough trading means a good head for Microbreweries (Return to top)
The brewing sector has lost its head as inclement weather and a dragging economy continues to push punters out of pubs and back into their homes for cheaper supermarket lager and ale. Attention, and retail shelf-space, has turned to micro breweries.
AB InBev recently announced it was cutting 25 jobs at its Magor Brewery in South Wales, while Diageo is closing its Waterford brewery later this year and axing 21 jobs.
Tough trading conditions are leading to rationalisation and consolidation of operations across the sector, although investment is also following, with Diageo reportedly investing 153M in its St James' Gate brewery in Dublin last year, and Marston's injecting £4.7M and 15 new positions into the expansion of its brewery bottling line in Burton this summer.
After the bigger brewers – such as Molson Coors, Carlsberg and AB InBev, two of which are clients – Siemens has identified "the big opportunity as being in craft brewing" , says Paul Daniels of Siemens. "We've been very much targeting this sector over the past year or so."
Siemens found that its Braumat process control system, created specifically for beer production, was prohibitive for smaller operations and introduced the Braumat compact for smaller operations such as craft brewers. Recently installed by Hall & Woodhouse at its Blandford Forum brewery, Daniels says the Braumat compact is "ideal for medium-sized brewers that produce up to 300,000 hectolitres a year, giving them the scope to grow".
"If you look at supermarket shelf-space, regional brewers are taking it up," says Daniels, and retailers expect traceability, quality control and audits on demand. "All these factors are part of the solution Siemens can offer to brewers investing in the sector for the long term."
Lorien Engineering Solutions also reports increased demand from craft brewers looking to grow. "The brewing industry is conservative," says Ian Murfin of Lorien. "It does innovate but is conscious not to change the end product."