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Sunday, 13 September 2015 20:42

Automation firm develops scalable canning line for craft beverage industry

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New semi-automatic canning equipment designed by Belmont-based Microcanner offers Sietsema Cider a scalable solution for packaging its products at its farm-based cider mill and tasting room at 8540 2 Mile Road NE in Ada. Pictured (l-r) are Andy Sietsema of Sietsema Cider; Eric Finnigan of The Wirt-Rivette Group, the firm that provided the equipment financing; and Todd Vriesenga of Microcanner LLC. New semi-automatic canning equipment designed by Belmont-based Microcanner offers Sietsema Cider a scalable solution for packaging its products at its farm-based cider mill and tasting room at 8540 2 Mile Road NE in Ada. Pictured (l-r) are Andy Sietsema of Sietsema Cider; Eric Finnigan of The Wirt-Rivette Group, the firm that provided the equipment financing; and Todd Vriesenga of Microcanner LLC. PHOTO: Joe Boomgaard

ADA — As a small producer of craft beverages, Sietsema Cider LLC often faces challenges when it comes to finding ways to package its line of hard ciders.

Owner Andy Sietsema found that bottling his products yielded inferior results and proved to be a hassle for the company and its customers. However, as a startup, the company wasn’t in a position to invest in its own canning line.

Like many craft beer and cider producers, Sietsema contracted a company with portable canning equipment to visit his facility in Ada and package his line of hard ciders. While acknowledging he’s had a good relationship with the provider, Sietsema said they offered an interim solution until he could invest in an in-house canning line, one he could use according to his schedule.

Not having to pay a third party would also allow the company to trim some of the cost that came in the switch from the cheaper bottles to the more expensive 16-ounce aluminum cans, he said.

“My margins are not where they can be, but (canning) gets your product in way more hands than the bottles do. With the amount of sales I’m seeing, I can’t keep up,” Sietsema said. “Orders have gone up, and cans are way more economical and consumer-friendly.”

However, existing canning options from the handful of North American suppliers came with long lead times for delivery and were not easily adaptable for growth, he said.

Enter Todd Vriesenga and Belmont-based Microcanner LLC.

With decades of experience in automation for the automotive, aerospace and defense industries at his main operation, Perceptive Concepts LLC, Vriesenga set out to offer a scalable canning line designed for producers like Sietsema Cider and the growing number of small craft breweries and cideries in West Michigan.

“It all started over a drink,” Vriesenga said.

In about 10 weeks, the company developed its beta model by adapting equipment from the automotive and food processing industries. Microcanner sourced 90 percent of the canning machine from within the state, Vriesenga said.

Sietsema helped Vriesenga test and develop the semi-automatic canning line at his Ada-based cider-making facility. After making improvements and redesigns and perfecting the model, they ended up with a canner that’s able to produce up to 40 cases an hour, a rate that’s “good for its size” compared to other equipment on the market today, Sietsema said.

Vriesenga designed the system to be highly flexible and easily tweaked with software or simple equipment changes. For example, Sietsema’s next upgrade will be to install a six-station filler, rather than the current four-station system, as a means to improve throughput. Further automation could come in the years ahead.

“The big idea is that it’s a semi-automatic canning line that you could automate in the future,” Vriesenga said.

Models should start at about $40,000, he added.

Microcanner has purchased all of the pieces to make its second machine, which it is building on spec while courting interest from “several parties” in the West Michigan craft beverage industry, Vriesenga said. The company expects it will be able to build and deliver a new canner within six to eight weeks, much shorter than the nine months or longer for many suppliers in the craft beverage industry, he added.

Another benefit for Sietsema Cider came in how the company pays for the canner. Rather than take out a loan or write a check to pay for the system, Sietsema worked with the Grand Rapids office of The Wirt-Rivette Group to structure a lease-to-own deal.

“It makes it a lot more affordable per month,” Sietsema said. “It’s not sitting there as debt on my books — I can write it off every month.”

Eric Finnigan, vice president of property development at Wirt-Rivette, said his firm is finding a growing audience for equipment financing among the players in the local craft beverage industry for everything from kegs to tanks and even pre-engineered buildings for production facilities.

“It allows clients to keep more of their cash,” he said.


GROWTH OPPORTUNITY

Vriesenga plans to make the rounds with breweries and cideries in Michigan and surrounding states — at least for the first year — to ensure the company can provide quick, hands-on service. After that, he believes Microcanner could scale up and build 200 systems over the next three years to serve producers across the country.

The launch of Microcanner comes at a time of rapid growth in the craft beverage industry. In the $19.6 billion craft beer segment, the number of craft breweries in the U.S. has doubled over the past five years to 3,500 and the industry’s expansion shows no signs of slowing anytime soon. Another 1,000 microbreweries are currently in planning stages, with some 700 expected to open in 2015, according to industry data.

The smaller cider industry generated $1.32 billion in sales in the U.S. in 2013, but it quadrupled from 2008 to 2013, according to data from Euromonitor International.

“I like the beer and cider industry. It has people who are working together, not against each other, and it shows,” Vriesenga said.

That spirit carries over to the equipment side as well, where he plans to work with customers on continuous improvement with each new generation of the Microcanner system.

Vriesenga is also in the early stages of working with Sietsema Cider to add a heat tunnel to shrink wrap labels on the cans before they’re filled with hard cider. That would help the producer save money because it could buy blank cans, rather than prelabeled cans, which cost more because the company does not move enough volume to buy cans in bulk for each of its labels.

“If you’re buying in bulk, that’s a lot of cash up front,” Sietsema said. “But there’s an economy of scale once I’m able to buy a blank can at 7-8 cents per can. That’s where things really start to move.”

For Sietsema Cider, the new in-house canning line should help the company to better keep up with the strong demand for its products across Michigan and the Chicago market — as well as ramp up additional packaging to accommodate future growth.

“If everything goes as planned, this year, we’ll do everything we can to stay ahead of production. It’s a big learning process,” Sietsema said, acknowledging his small farm-based business is quickly becoming more sophisticated. “Now, it’s to the point where I’m starting to deal with banks and lines of credit and we’re starting to do a big shift in how business is done in general. In two years, I’ll need a bigger building, bigger equipment.”

Read 7316 times Last modified on Monday, 28 September 2015 10:51

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