In my last blog entry I wrote about a recent trip I made to Budapest, Hungary. I was there attending the annual conference of the International Geographic Union Commission on the Dynamics of Economic Spaces. The theme of the conference was Rethinking Economic Geography in the Era of the Fourth Industrial Revolution: Manufacturing, Entrepreneurship, Employment and Industry 4.0. My presentation at the conference was about the applicability of Industry 4.0 methods to the craft brewing industry.

So what is Industry 4.0? Put in historical context Industry 4.0 is referred to, by many, as the fourth industrial revolution (see diagram below). It is in fact, a “general term for networked, digitized production; machines and products are seen as networked and intelligent components that can exchange data locally, globally and among companies.” The different parts of an Industry 4.0 manufacturing system include the Internet of Things (IoT), big data, artificial intelligence, automation of processes with robots, 3D printing, and artificial intelligence (AI). For example, the Internet of Things (whereby machines connect and communicate with each other) permits manufacturers to use sensors that collect real time data on manufacturing processes. These data, in conjunction with powerful analytical techniques, can provide manufacturers with insights into inefficiencies in their manufacturing processes. Acting upon these data and analysis allows manufacturers to realize increased levels of productivity. In short an Industry 4.0 factory is a smart factory.

While concepts such as the Internet of Things and big data might seem a million miles away from making craft beer, there are, in fact, several examples of breweries utilizing Industry 4.0 technologies. These include New Belgium Brewing who have production breweries in Fort Collins,Co and Asheville, NC. A major problem that New Belgium faced was unscheduled downtime on their bottling line. This meant that the brewery was not bottling as much beer as it could. To address the problem, New Belgium utilized what is known as a Manufacturing Execution System (MES). An MES is a computerized system which allows manufacturers to “track and document the transformation of raw materials to finished goods. MES provides information that helps manufacturing decision makers understand how current conditions on the plant floor can be optimized to improve production output.” The MES allowed New Belgium to identify the sources and number of downtime events. They were then able to take steps to remedy them. Downtime fell by 50%, and there was a significant increase in bottling efficiency. As a result, the number of cases of beer being produced per week increased from ~150,000 to ~200,000. All of this was achieved without any new capital investments.

While New Belgium is a relatively large craft brewer (the 4th largest in the United States), Industry 4.0 methods have been utilized by smaller craft breweries. Take Sugar Creek Brewing Company of Charlotte, NC. Opened in 2014, Sugar Creek specialize in Belgian-style ales. Annually, the brewery produces ~5,000 barrels of beer. When Sugar Creek realized that they were losing $30,000 a month due to excessive foaming they knew something had to be done. Excessive foam in bottles coming off the bottling line was a particular problem. Somewhere between 10% and 13% of a batch of beer was being wasted. The brewery turned to IBM and Bosch for help. Sensors were installed on the production line and the generated data were analyzed. The analysis showed that the excessive foam was created as a result of imbalances in pressure and temperature as the beer went from tank to tank on the bottling line. Armed with this new knowledge, Sugar Creek were able to make adjustments that solved the problem and reduced waste. An added bonus was more controlled and precise fermentations which resulted in better flavored beer. A short video explaining how Sugar Creek benefitted from Industry 4.0 technologies can be viewed here.

The two examples above clearly demonstrate the benefits of Industry 4.0 to the craft brewing industry. In addition to New Belgium and Sugar Creek, there are other craft breweries that are using Industry 4.0 technologies. These include Deschutes Brewery of Bend, OR and Tröegs Brewing of Hershey, PA. In reality though, I wonder about how many craft brewers are in a position to take advantage of Industry 4.0 technologies. Most craft brewers are quite small. Many, for example, do not have their own bottling or canning equipment, and so utilize the services of mobile canning companies. As one observer noted, “the use of sensors throughout the premises would seem appropriate in larger facilities. Smaller microbreweries would specifically struggle with the adoption of this advancement, due to height of cost. Smaller locations might not possess the space large enough to see any success either.“ While Industry 4.0 technologies may not become widespread in the craft brewing industry, those breweries that are able to utilize them are likely to realize unforeseen and unprecedented improvements in efficiency and productivity.