Mobile canning puts more Indianapolis beers on shelves
Mobile canning services are turning the smallest of breweries into legitimate players in America's craft beer craze.
When Indiana City Brewing Co. launched in 2013, founder Ray Kamstra wasn't thinking about packaging. He was just happy to sell beer.
Kamstra, who previously worked as a creative director and brewed beer as a hobby, returned to his hometown after nearly a decade in Chicago. With the help of a Kickstarter campaign and several volunteers, he leased and built out about 7,000 square feet in a historic brewery building on Indianapolis' east side. Those volunteers became Kamstra's family, as he calls them, and Indiana City opened a taproom.
"I'd never worked in the beer industry at all," Kamstra said. "We're all home brewers. None of us has any experience in the actual brewing world."
Until recently, a taproom likely would have been the ceiling for Indiana City, at least for a few years. But a fast-growing mobile canning trend has made Indiana City a familiar brand in Indianapolis-area bars and liquor stores.
The brewery in October started using Logansport-based mobile canning service ICan Solutions LLC to package its beer. Since then, Indiana City has increased its production by 60 percent, reached deals with about 40 liquor stores and started delivering its cans to bars.
"Most of the beer that we've brewed up until about six months ago was served in our taproom," Kamstra said. "Mobile canning really gives us an opportunity to meet the rising demand across the city beyond just the people who want to come in and hang out with us."
Mobile canning services, which started becoming popular about three years ago, are turning the smallest of breweries into legitimate players in America's craft beer craze. They bring equipment to breweries and package beer on site, saving breweries tens of thousands of dollars on equipment. ICan, one of two mobile canning services with a strong presence in Indiana, charges breweries as little as $1,600 for a 100-case run.
That's not necessarily cheap, but it's an appealing option for many startup breweries. Young companies that want to set up an in-house canning system face a minimum upfront expense of $20,000 and likely much more, said Bart Watson, the staff economist for the Boulder, Colo.-based Brewers Association.
"Canning is a very cost-effective option relative to bottles, but requires really large canning runs and often requires a lot of expensive capital equipment," Watson said.
Canning in general represents a minority of the packaging for craft beers, Watson said. In 2014, the last year for which the Brewers Association has data, about 10 percent of craft beer went into cans. About 60 percent was bottled.
Why cans are winning over craft beer drinkers (and breweries)
The Brewers Association doesn't track mobile canning, but Watson said the industry is contributing to a rise in canning at a time when consumers are more willing to ditch bottles.
Mobile canning is growing along with America's craft beer scene. The U.S. last year surpassed 4,000 breweries for the first time since at least the 1870s, according to Brewers Association and U.S. Census Bureau research. New breweries are looking for ways to distribute their products, and mobile canning is providing a key to the marketplace.
"You're certainly going to see more mobile canners," Watson said.
Access to more customers
Canning has introduced Indiana City's beer to consumers who never would have stepped into the brewery's taproom at 24 Shelby St. Because of the success of Indiana City's distribution, the brewery hopes to double its production from 700 barrels of beer in 2015 to 1,400 this year.
"It's been really exciting for us," Kamstra said. "We didn't know what it was going to be like and we sold through the first three batches of cans in a couple weeks. Now, we're at a schedule where we're canning just about as quickly as we can brew to keep up with it."
Much like Kamstra, Luke Brown, the owner of ICan Solutions, never envisioned a career in the beverage industry. Brown graduated from Indiana University in 2002 and worked in his family's business as an industrial engineer.
But as he became more familiar with craft brewing trends, Brown saw a business opportunity.
"I went around to some beer festivals and asked all the breweries, 'Why don't you can all your beer?' They said they don't want to pay for canning," Brown said. "They don't want to buy a bunch of cans because they have to warehouse them. Everyone kept saying the same reasons."
Brown learned about an early mobile canning operation in Colorado and decided to enter the business. He spent about $150,000 on a truck and equipment to get started, using his engineering skills to save money, and launched his company in December 2013. He quickly found demand in Indianapolis.
ICan has grown to serve 16 clients across Indiana, Illinois, Missouri and Ohio. ICan's largest competitor, Michigan Mobile Canning, also has grown quickly. The company opened a separate operation called Indiana Mobile Canning with a warehouse and staff in Indianapolis.
Mobile canning appeals to small breweries such as Indiana City, which are just starting to package their products, as well as more established companies such as Speedway-based Daredevil Brewing Co.
Daredevil, which has worked with both ICan and Michigan Mobile Canning, takes a hybrid approach to packaging, using mobile canning as well as its own equipment. The company in 2014 spent $60,000 on what co-owner Shane Pearson describes as low-end canning machinery. Altogether, Daredevil packages between 1,000 and 1,500 cases of beer per month.
"We do a lot of canning, so we're probably a little larger than a lot of people that use mobile canning companies," Pearson said. "But it works in the way that we run the business and where we want to invest money."
Pearson estimates it would cost about $250,000 to buy a high-end canning system that would accommodate all of Daredevil's production. Daredevil might make that investment in a couple years, but Pearson said the company isn't quite ready.
"It's not just the equipment. You also have employees and have to train them," he said. "Being able to work with ICan, they can come in and they're really experts at what they're doing and that's worked really well for us.
"We're planning to continue to use them, but at some point, yeah, it's possible we'll outgrow that and put in something larger."
Just because breweries have a new option for canning, though, doesn't necessarily mean they should start doing it. Brown recommends breweries sell their products on a small scale for at least six months to a year before they start packaging.
"You need to establish your brand, you need to see what labels or beer styles people like the most," Brown said.
The breweries that fail tend to move too quickly, he said.
"You don't want to come out with four different types of beer and you don't know which one is your No. 1 seller, and you're going to have a pile of beer that's not selling," Brown said.
Safer proposition
Taking the leap toward canning carries much less risk than it did just a few years ago. Mobile canning wasn't an option when Sun King Brewing Co. launched in 2009. The Indianapolis brewery spent $230,000 to buy equipment and begin canning its beer in 2010 — a gamble that has paid off. Sun King has become one of the city's largest breweries, producing about 25,000 barrels of beer a year.
"We were growing fairly rapidly and becoming accepted in the marketplace, but a lot of places don't sell draft beer," Sun King co-owner Clay Robinson said. "At the rate our business was growing and we were selling beer and people were excited about local beer, we decided it was the right thing to do. Obviously, it was the right thing to do."
While Indiana City could have chosen a path similar to Sun King's, Kamstra said he's glad there was a way to avoid a six-figure investment.
"We'd probably be taking out a big bank loan" if mobile canning didn't exist, Kamstra said. "I like growing on our successes. I don't like taking on debt. We'd have to buy ourselves personally to do what would take us to the next step. Could we get the loan? Yeah, I'm sure. But I'm more confident about, let's make our (profit) margins and get it done this way."
On a recent morning when ICan was setting up its equipment to can another 160 cases of beer for Indiana City, Kamstra reflected on the improbability of a group of home brewers becoming friends and partners. It was another milestone day for the brewery. Indiana City was about to can its Dock 7 beer, an American IPA, for the first time.
Indiana City brewers Nick Shadle and Beppe Cuello prepared to grab freshly canned beer from Brown's canning system, label it and send it off to liquor stores and bars across Indianapolis.
"It's every home brewer's dream to start up their own place, to create a killer name for the beer, a nice label, see it on tap around town," Kamstra said. "That's the ultimate dream of the home brewer."
Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.