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Back Forty Brewing: Using Kegpin to Control Chaos

Jason Wilson had a passion for brewing. By 2008, he had toured over 150 breweries and he had a vision for founding a brewery in his hometown of Gadsden, AL. He solved 2 great challenges that defined Back Forty’s success in the coming years.

First, he brought in Brewmaster Jamie Ray to establish the quality of the product. Then he brought in Tripp Collins, an old friend from Auburn University with a background in logistics to help establish the quality of the operation. There are hundreds of new breweries opening each year in the United States, and only a small fraction of those will survive 10 years. The ones that do have a great product and a world-class operation.

So how did Back Forty grow from a small operation leasing production from a brewery in Mississippi to one of the largest breweries in Alabama? They did it by trying to find a sweet spot that balances the control of a well-run operation with the chaos inherent in the brewing industry.

Chaos and Control

Back Forty COO Tripp Collins describes those early days as chaotic.

“We operated under panic mode for a long time. For most small breweries working with a handful of wholesalers, operations can be challenging. Brewery operation involves a variety of skillsets that not everyone has starting out.”

With concerns about facilities, production and employees, Tripp says that keg management isn’t usually at the top of the list for new breweries, “For most brewery startups, worrying about cooperage is down the list, but it shouldn’t be. Managing or not managing your keg float can move your margin a couple of percentage points one direction or the other, and that can make the difference between success and failure for a brewery that is just starting out.”

Back Forty has used a mix of owned and leased kegs as their operation has expanded, but it seemed like they always had a mad scramble to call the kegs in when they finished a big batch. “You don’t want to send a truck to pick up kegs if there are only 4 in one location. They need to accumulate a bit. But when a batch is ready to process, you have to have the kegs to put the beer into. This leads to some long days calling in kegs from way too many locations across our footprint.”

But until recently, there wasn’t a viable alternative for managing their keg float. And as expensive as stainless steel is to own or lease, it still can’t be the primary focus for a new brewery. When we asked Tripp what he wishes he had known in 2008, he responded, “We wish we’d had a crystal ball to see the beer trends in consumer taste, bottle size, high-gravity offerings, and lighter lager-style beers. Fortunately, we are small and can react quickly, but it would really be nice to see what is coming.”

Kegpin and Back Forty

Back Forty has talked about tracking their keg float from their earliest days, but there hasn’t been a viable alternative…until recently. Back Forty started tagging their kegs in February. They took a couple of days to tag a large number of their kegs at once. “It took us a little while to tag our kegs, but now its done. We might not scan at every stage while the keg is in our facility, but at this point we don’t let a keg hit the door without getting scanned.

“How long is the average keg turn for Back Forty? Let’s just say that according to Kegpin, it wasn’t good. We never really knew this number before, but now that we do, we can manage it.”

Managing cooperage becomes more challenging because of the complicated relationship between breweries and wholesalers. The wholesalers have little incentive to get empty kegs back quickly and efficiently since they are almost never charged for the keg deposits. This can frustrate breweries, but they depend on wholesalers for sales and distribution, so a positive working relationship is critical.

Tripp says that information is the solution. “If you can track a specific keg, you can charge the deposit. Now we can meet with our distributors to say ‘This is the information that we are tracking. This is how we are going to use this information. This is how we are going to reconcile our cooperage periodically. By putting a process in place, everyone knows what to expect and we avoid confrontations and panicked phone calls when we need kegs.”

The Results

While Back Forty is early in the Kegpin process, Tripp feels like the solution can add a couple of percentage points to the bottom line. The benefits of these increased profits extend well beyond the brewery. Back Forty recently announced that they are going to expand the team at their Gadsen facility. This news has contributed to Back Forty’s positive image in their home state, and it is allowing them to prepare for a decade that looks to be just as exciting as their first decade.

“We are thrilled to be able to allocate resources to employing more people and preparing for growth rather than pouring more and more money into stainless steel.”

Since Back Forty isn’t pouring money into stainless steel, we expect them to continue pouring some of the best beer around for years to come.

Would you like to find out more about what Kegpin can do for your brewery? Contact us!

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