By Brewers Association estimates, keg loss costs breweries between $0.46 and $1.37 per barrel of beer produced. That means in 2018 (the most recent report available), craft breweries lost between $12 million and $35 million from lost kegs. For breweries looking to grow, every penny counts — and having to shell out $75 to $150 per keg (depending on size) to replace lost ones can add up very quickly.
To combat keg loss, many breweries and distributors use keg deposits that are designed to encourage customers to return keg shells by charging them a fee upfront that is then returned when the keg is or used as a credit on the customer’s next order. It’s unclear how effective this practice is, but it does provide breweries some small peace of mind that at least they can keep the deposit if the keg is never returned — though, keg deposits are hardly ever (more likely, never) as high as the cost to replace a keg.
And besides the actual cost of the keg, there are plenty of other downsides to a lack of visibility surrounding your fleet. For one, having product sit at a customer location for months at a time means they could potentially be serving it way past peak freshness. That’s not great for your reputation with consumers. And even if the keg itself is empty, leaving it sit for 60 – 90 days or more may give customers the impression that you’re not on top of things or don’t care about that customer relationship — potentially making them less likely to reorder. Being able to see when a keg has been at a location for more than, say, 60 days gives you a lead in to check in on it and tell the customer about new products you have to offer. If you have a system for keg deposits and credits, you can offer to put their keg credit toward a new order and hopefully close a new sale.
But even with the known cost associated with lost kegs, many breweries — especially those still in the early growth stages —struggle to figure out how to keep track of kegs. For self-distributing companies in particular, it’s important to know how many kegs are at which customers and how long they’ve been there. And as fledgling breweries grow, the keg tracking problems can grow with them.
What Should You Track?
To know what you need to track, consider questions you and your team frequently have concerning your fleet of kegs. Some of these questions might include:
- How many kegs do we have (total)?
- Where are those kegs? Are they in the warehouse, at a customer, or in the taproom? Are they empty or filled?
- Do we have any empty kegs available for packaging? If we’re running low, when will we need to order more (or get back empty kegs from customers)?
- How long have kegs been sitting at a customer location, with freshness of the product declining every day?
- If we have to recall a specific lot or batch number, how will we know which kegs contain that batch?
If you can’t answer all these questions with certainty, your keg tracking processes have room for improvement.
How Do You Do It?
Most folks who realize they need to get a handle on keg tracking start with some sort of keg inventory spreadsheet. The process sounds simple enough — you list out all the kegs you have and create columns that allow you to categorize them as mentioned above (where they are, if they’re filled, with what product, etc.).
But once you create your keg tracking spreadsheet, who keeps up with it? Who can access it? Will everyone on your team be able to update it in real time as kegs are sold to customers, transferred to the taproom, or returned to the warehouse? Will you make sure to update the spreadsheet with every transaction and its date so you can keep an eye on how long products have been sitting at customer locations? Can you create any reports from the spreadsheet that give you answers to the questions in the section above?
In summary, your keg tracking process should be easy for your entire team to follow and offer the most complete, accurate, and up-to-date information possible. Any process will require some effort on your part, but the value you get out of it should be worth it — and with a spreadsheet, that’s rarely the case.
The Ideal Solution: A Complete Keg Inventory System
When your business is still small and you don’t sell much beer outside of the taproom, managing kegs can be simple without any special technology. A spreadsheet might be sufficient for a time. When all your kegs remain in-house (save for those sold to taproom customers), there’s just not as much to keep track of.
But assuming your goal is to grow, it’s important to have processes in place that can grow with you. You likely already know how important it is to have a handle on your inventory in general — from raw ingredients to packaging items and finished goods. Many brewers turn to brewery management software for this, and with good reason — benefits include being able to more easily pull numbers for TTB reports, forecast inventory orders, plan production schedules, and manage sales.
Keg Tracking Software
In an ideal world, you’d have a brewery inventory management system tied to a keg tracking system so everything is in one place. Using software will cost you a little extra money per month, but not as much as it would cost to buy new kegs — you can get keg tracking software for just cents per keg. Keg tracking software will help you keep an eye on all of the following information for each keg in your fleet:
- Serial number
- Keg type/size (½ barrel, 1/6 barrel, etc.)
- Status (empty, filled, at customer)
- Last transaction
- Days since last check
- Days filled
- Days at customer
The benefit of using software designed for keg tracking is that you end up with a complete system of record that can be used by everyone on your team who touches kegs on a regular basis. Everyone can access and update information in the same place, and you can pull reports regularly to keep track of where your kegs are and when you need to get them back. Plus, if your inventory management software “talks” to your keg tracking system, you only have to log in to one system for all your brewery management needs.
Here’s what you should be looking for:
- An inventory management system that allows you to keep track of finished goods and packaging materials inventory and forecast when you need more of the latter
- A customer information portal tied to inventory so your sales and inventory information is all in the same place
- Keg scanning via mobile device is ideal so you can use QR codes to scan kegs in and out and see related customer and product information
- The ability to scan in multiple kegs at once, as it’s likely that your delivery drivers pick up more than one at a time
- The option to add unlimited users to your account so anyone who needs access to the software has it
Stop Losing Kegs With the Ekos Keg Tracking Module
The Ekos Keg Tracking Module is a high-powered add-on that is customized for your team and works seamlessly with our brewery software. Keg management is just the beginning — you’ll also improve your team’s knowledge of keg locations, minimize annual keg loss, and easily scan multiple kegs from mobile devices. On top of all that, it helps you keep track of what’s in the kegs so you always know the freshness — starting with the day product went in.
Why use keg tracking software rather than spreadsheets? Don’t just take it from us — hear it directly from an Ekos client:
“As a small, self-distributed brewery, we want to make sure we’re getting those kegs back. It is costly for us if we have to replace them. We want to make sure we’re able to compete with larger distribution companies and that we’re holding a high level of professionalism. Keg tracking is a way to elevate that, and if we continue to grow, we want to make sure keg tracking is extremely efficient. ”
– Amber Swaim, Warehouse & Distribution Coordinator at Ratio Beerworks
Looking to learn more about the benefits of Ekos and the keg tracking module? Reach out to email@example.com for more information.