Drastic makeover leads to resounding success

ON THE VERGE of bankruptcy at the beginning of the new century, Sweden’s oldest privately owned brewery has forestalled plummeting sales by rethinking the company’s strategy. Compelled to rethink its strategic focus, develop a permanent stream of improvements, and invest in new products, ?bro Bryggeri in Vimmerby is now a flourishing model brewery with an output of one million hectolitres. Their primary lifeline was the premiering of “Rekorderlig” cider, which has been met with keen interest all over the world. In the meantime, ?bro possesses state-of-the-art filling kit, in the shape of a new canning line and a recently installed non-returnable-glass line, both of them supplied by Krones.

Back in 2001, ?bro produced around one million hectolitres of beverages with 70% of products in the water and soft drink categories for supermarkets – brands that were too weak and under constant pricing pressure in a fiercely contested market. Although sales were relatively high, no profits could be made from them.

Henrik Dunge, managing director and co-owner in the fourth generation, looks back on those tough conditions pragmatically as they did in fact also have an upside: compelling the brewery to rethink its strategic focus, to develop a permanent stream of improvements, and to invest in new products. This radical strategic revamp led to the development a cider, branded as “Rekorderlig” – an old Swedish word roughly translating as “reliable, trustworthy”, and the expansion of the beer business by adding new, ultra-quality-driven brands.

?bro changed its distribution philosophy for both these product categories – away from the supermarkets, for which by law only a maximum alcohol content of 3.5 ABV is allowed in Sweden, and towards the state-run monopoly for alcohol sales “Systembolaget”, and restaurants, while also targeting more exports. This strategy, as well as the decision to largely abandon water and soft drink production, resulted in better margins, which meant the brewery was able to channel massive capital expenditure into its operative business, and in the years up to 2012, make production output rise to its previous level of one million hectolitres.

Today, the output ratio is around 60% beer and 40% cider, with a marginal share accounted for by soft drinks. Beers and ciders today provide ?bro with a share in Sweden’s beverage market of just under 10% each; a market share of around 16% at Systembolaget; 4% in the hotel and catering segment, and a mere 0.5% at retailers.

A third of total production output is exported, primarily attributable to the Rekorderlig cider, which is available in 17 different flavors with ABV levels of 4.0 to 4.5 percent. This cider, brewed to an old Swedish household recipe and with a lovingly drawn home-made label, was initially sold on a modest scale in Finland and in German-Danish border shops, and but today is imported by more than 20 different countries, including the UK, Australia, New Zealand or Canada.

Mats Sk?ldestig, deputy managing director and the director responsible for production and distribution, sees this as a logical reflection of the Swedish beverage industry’s overall situation: “There are only about seven million people living in our country. Competition on the domestic market is stifling. So all market players are compelled to maximize their creativity and to upsize their exports. This is why, in addition to cider, we’re also aiming at beefing up our beer exports, not least with our new beer type ?bro Lager in the future,” he said.

Prize-winning beer qualities

At the same time as it boosted its cider, ?bro also invested in the quality and diversity of its beers. In the brewery’s own taproom, you will find as many as 101 different beers to choose from: ?bro brews around 20 different beers and imports just under 40 of the world’s brands, from the Belgian Duvel to the German Weihenstephaner.

“In the brewing process, for example, we’re now also using decoction again, in addition to the infusion mashing process. We’re brewing lager in line with the German, Bavarian and Czech models, generally trying to create interesting beers and always prioritizing their digestible quaffability,” explained senior brewmaster Lennarth Anemyr.

The firm’s commitment to its beers’ quality has repeatedly been rewarded by international prizes, most recently by the most prestigious award around, as a champion beer in the lager category for Bryggmasterens Premium Gold during the beer test of the International Brewing Awards in 2013.

Investment in new lines

In 2010, ?bro installed a complete canning line from Krones rated at 70,000 cans an hour, for filling beer and cider into 330- and 500-millilitre cans. This was at the same time the first complete single-sourced line that ?bro had ever bought. The following year, the brewery channeled additional capital expenditure into its operations, this time buying a combined glass line able to handle both returnables and non-returnables and rated at 45,000 bottles an hour, comprising machines from different manufacturers. This same year also saw the big international breakthrough of Rekorderlig in the UK. Capital simultaneously invested in Swedish restaurants and pubs then necessitated a new kegging line just one year later. By then, the total share of canned beer and cider had risen to 60 to 70 percent.

As cider exports kept on growing and growing, however, the glass bottling operations soon reached their limits once again, necessitating a completely new 8,000-square meter filling and storage hall adjunct to the brewery building and to install a second glass line there. This time round, the family-run brewery opted for a complete line once more, and from Krones yet again.

“What we wanted was the perfect design, and this is was what we got from Krones. For example: the original plan had been to incorporate a tunnel pasteurizer; now we can use an existing fash pasteurizer for all our beers. The option for warm-flling of cider (at about 18 to 19 degrees Celsius) means we can dispense with a warmer upstream of the labeler. And Krones responsively tailored the layout to our ideas of spatial line integration into what was now a combined bottling and storage hall,” noted Mr. Sk?ldestig.

The non-returnables line, rated at 60,000 0.5-litre beer bottles and 45,000 0.5-litre cider bottles respectively, starts with a Pressant depalletiser, which sweeps the bulk glass off to the second level. This machine has been erected with the short side facing the storage section of the hall, roughly in the middle of the line’s perimeter, with a direct access route for the bulk-glass pallets fed in from the store. Conveyors then take the bulk glass to the rinser/fller monobloc comprising a Modulfll HES, a Moduljet rinser and a Checkmat in a cleanroom. The fller has a pitch circle diameter of 5,760 millimeters and 176 flling valves, making it the biggest that Krones has installed so far in Scandinavia. It still offers room for more closers.

Downstream of the monobloc, a Linadry machine prepares the bottles for labelling, which is handled by a Multimodule, to which three wet-glue stations with an AMB automatic magazine loading system or six APS 4 pressure-sensitive-label applicators can be docked as needed. These latter work in autochange mode: three applicators are running at any given time; as soon as their label reels are empty, the machine switches over automatically and smoothly to the other three applicators.

Things get exciting at dry end. .bro had Krones install no fewer than three different end-of-the-line packers: First, a Variopac Pro FS for four- and six-bottle shrink-packs; secondly a cluster packer that are run alternately as required.The third machine is a Variopac Pro WTS for wrap-around cartons or shrink-packs on trays.

These three machines produce a multiplicity of disparate package types and sizes. “Admittedly, we haven’t yet got the requisite demand for each type of packaging that’s included in this abundant choice. Here, we’ve actually invested in future opportunities, though these will undoubtedly materialize,” said technical manager Gullmar Johannson.

A major success

The line’s design is very slim and oblong. There’s a gallery for visitors, which makes it accessible to the general public, a point the brewery was very keen on. The line is operated by three staff, one of them looking after the fller and labeler, one for the three packers, and one for the bulk-glass sweep-off depalletiser, the palletizer and the wrapper. The only job still done by hand is unstrapping the bulk-glass pallets, with all the rest handled automatically. The relevant data are stored in a line documentation system (LDS).

The contract had been signed in October 2012, installation work began in March 2013, and the frst bottle came off the line in May. “We were rather impressed,” remarked Mr. Johannson, “the date specifed in the contract for frst flling was met to the very day. All in all, this project was a major success for us and an important step into our future”, is his verdict.

The new line has been customized to suit .bro’s needs. “We’ve got the relevant sales volume, and can already make full use of its capacities in two shifts. Not to mention the abundance of packaging options that provide us today with the flexibility the market will demand of us tomorrow,” concluded Mr. Sk?ldestig.

All in all, .bro’s drastic makeover has produced only positive results and can be counted as a resounding success.