Canning pioneer and largest craft brewery canner in the USA

Georg Zuzok*
Bob Pease**

Work should be fun. At the Oskar Blues brewery, this is one of the key  corporate objectives. Dale Katechis, the owner of Oskar Blues, explains. "Each and every one of our employees deserves to have a good time here and is highly valued as an individual." This strategy has proved highly successful; everyone who works for Oskar Blues is prepared to go through thick and thin for 'their' brewery. To date, however, such sacrifices haven't been called for, with Oskar Blues going from strength to strength – and that at great speed! Dale Katechis launched Oskar Blues when he opened the Oskar Blues Brew Pub & Grill restaurant in Lyons, Colorado, in 1997. The company now owns not just this food outlet but two other breweries as well, one in Longmont, Colorado, and one in Brevard, North Carolina, plus two other restaurants and a farm. According to Katechis, one of the most significant and recent moves in the brewery business (now the main source of sales) is Oskar Blues' investment in two new KHS Innofill DMD can fillers. "As a canning pioneer among US craft breweries and as the craft brewery with the highest turnover of cans in the USA, this investment is extremely important when it comes to safeguarding our future," says Katechis. Jim Weatherwax, engineering manager at Oskar Blues in Longmont, (or, to put it the Oskar Blues way, the Minister of Kickin’ Down Doors) adds, "To us, KHS technology has long been the byword for top quality. With our recent investment in a can filler for each site we're demonstrating in practice how highly we think of KHS engineering. Our canning machines continue to convince us every single day of the week. We' also profit from a range of KHS services which just couldn't be any better."

Corporate philosophy "to have a good time"

When Katechis opened his first restaurant in Lyons near Longmont in 1997, straight after leaving college, he had no inkling of his future success. However, he had one thing down as a sure cert: to give his guests a good time and have fun himself! In 1998 friends 

*Head of Market Zone Americas, KHS GmbH, Bad Kreuznach, Germany.

     Phone: +49 671 852 2202

**Head of Filling Technology, KHS USA, Inc., USA. Phone: +1 262 787 5108 

asked him if he didn't also want to start selling his own handcrafted brew.  The novice restaurateur thought this was a good idea and began making his first beers in the restaurant cellar. In 1999 he started brewing small batches professionally for exclusive sale in his restaurant. Katechis' beer was excellently received, with him winning a bronze medal for his former Reverend Sandi's Sinful Stout brand at the Great American Beer Festival in the first year of production.  

First craft brewery to can beer in 2002

In 2002 Katechis made a decision which caused great consternation among the craft breweries of America: he began canning his beer, thus taking on a pioneering role. As a sportsman and keen mountain biker this was a perfectly logical step for Katechis, his chief arguments in favor of the aluminum can being that it's light and easy to take on any number of outdoor activities; it protects the beer perfectly from light and oxygen pickup; it's simple and eco friendly in its recycling; and in being light it cuts fuel consumption, thus reducing the carbon footprint for the transportation of beer. 

A breathtaking growth in sales of around 50% per year

The Oskar Blues team at Oskar Blues Brew Pub & Grill immediately told their customers why they had opted for cans, passing on the same information in person to their distributors at their other, now established points of sale. This had the desired effect, with plenty of takers for the first cans of flagship brand Dale's Pale Ale exclusively filled by hand. In 2002 600 barrels of beer were sold (one barrel is equivalent to 1.1735 hectoliters); in 2003 this figure mushroomed to 1,180 barrels.  Sales continued to virtually double, with 2,600 barrels sold in 2004, 5,000 barrels in 2005, 8,400 barrels in 2006 and 13,000 barrels in 2007. "With this continuing huge boost in sales we hit upon the idea of relocating much of our brewing activity from our brewery pub to our own brewery," says Katechis. No sooner said than done; in 2008 the first classic brewery was opened in Longmont, set up with a view to the future to output around 150,000 barrels of Oskar Blues tipple a year. The target was ambitious but proved realistic, as the growing demand for quality beers from Oskar Blues failed to drop. Sales continued to rise by an approximate 50% per annum. 2009 saw 29,000 barrels sold, 2010 42,000 barrels, 2011 59,000 barrels and 2012 82,000 barrels. Katechis believes that a figure of 125,000 barrels isn't unrealistic for 2013. In percent, about 75% of all beer is sold in cans, with the remaining 25% racked in kegs. Oskar Blues is now the craft brewery with the largest turnover of canned beer in the USA. This is quite an achievement, as several hundred craft breweries in the States have now switched to cans, copying the canning pioneer. Says Katechis, "I find the growing enthusiasm for cans on the craft brewery scene extremely positive. This serves to greatly boost the popularity of what I consider to be a hugely beneficial container." 

Kegs are racked at the Oskar Blues site in Lyons by an Innokeg Till Transomat from 1993. Weatherwax states that "This technology meets all our requirements for a top-quality kegging process. We're very satisfied with this machine, too."

Two breweries in perfect mountain biking country

In April 2012 it was decided to launch a second brewery. "I decided to open in Brevard, North Carolina, for two reasons," explains Katechis. "For one thing, in the future we can supply our consumers on the East Coast from here, where we currently already sell around 35% of our beer. For another, the country round Brevard is full of mountains and rivers which is perfect for mountain biking and fly fishing. I think this is a perfect place to combine fun at work with fun during your free time." Brewing and filling got off to a start in Brevard in January 2013. "The speed with which we were able to put our idea into practice is partly thanks to KHS," smiles Weatherwax. "KHS not only built the can filler we ordered for the new plant in record time but also commissioned it very quickly at the new brewery. You couldn't have asked for more commitment!" 

Innofill DMD can filler for each brewery

Another great advantage in the eyes of Weatherwax is that exactly one year previously the site in Longmont invested in precisely the same KHS Innofill DMD canner model with an identical capacity of 16,800 cans per hour maximum. The operators there are now extremely familiar with the filling system and all set to swap information with their colleagues at the new site. Weatherwax says, "At Brevard people will also quickly realize that this is an extremely reliable filling system which is easy to operate and easy to maintain. And that it just keeps on running – 24/7 if needs be."

The two Innofill DMD mechanical filling systems at Oskar Blues both fill 12, 16 and 19.2-ounce cans (one ounce is 0.02957 liters). It's interesting to note that with the 19.2-ounce can the brewery is again acting as a pioneer; it was the first brewery in the USA to start filling this type of big can in September 2012. The maxi container is well received by a target group that largely consists of keen sportsmen and women. However, the 12-ounce can still accounts for the lion's share of canned beer sales. 

Easy to handle, robust and flexible

With three different cans being processed at Oskar Blues it's important that no elaborate changeovers are required when swapping over can formats on the Innofill DMD. Return gas tubes don't have to be changed over. The can fill level is precisely stipulated by the ring bowl height adjustment facility. Corrections to the fill level can also be made during filling if necessary. In addition to providing a high line availability, this means that there is minimum overfilling, thus saving product. 

Dale’s Pale Ale still flagship brand

The entire Oskar Blues beer portfolio is filled on each filling system. Besides the company's flagship brand Dale's Pale Ale, this consists of Mama's Little Yella Pils, Old Chub Scotch Ale, G'Knight Imperial Red IPA, Deviant Dale's India Pale Ale, Ten FIDY Imperial Stout and GUBNA Imperial IPA. The absolute top-seller in the range is still Dale's Pale Ale, with a sales share of 60%. This is followed by Mama's Little Yella Pils and Old Chub Scotch Ale, each with a 10% share, with the 20% that's left distributed evenly among the other brands of beer. Although Ten FIDY Imperial Stout and GUBNA Imperial IPA are at the bottom of the list, as seasonal specialty beers they are only available from September through March. 

Minimum oxygen pickup and low CO2 loss convincing

Back to Weatherwax. "It was very important to us that our beers are canned with minimum oxygen pickup. We brew to the highest quality standards; our canning quality must fully adhere to these." It's no surprise, then, that gentle filling, a low CO2 loss and minimum oxygen pickup are also what distinguish the Innofill DMD filling process. For example, the design of the Innofill DMD filling valve is far more advantageous than that of the counterpressure valve, with the filling valve not opening until the pressure between the can and the ring bowl is perfectly equal. The filling process (in brief) is as follows: gas from the ring bowl flows through the return gas tube into the cans and from the cans through the snifting valve into the snifting channel. The cans are then pressurized by closing the snifting channel. The actual filling process begins after the return gas tube is lowered into the can while the filling valve is opened by mechanical actuation of the switching pinion – provided the ring bowl and can pressures are the same. The beer is fed through the ring gap down the wall of the can, thus flowing smoothly into the can. During filling, CO2 is returned to the ring bowl through the return gas path. When the fill level in the can reaches the bottom of the return gas tube, a ball automatically closes the return gas path and stops the filling process. Since this procedure prevents beer from entering the return gas tube, blowing out the return gas tube is not necessary. Carefully retracting the return gas tube back into the valve and subsequently closing the valve ensure that there is no beverage foaming and that fill levels are highly accurate. 

Maximum microbiological safety ensured

To ensure maximum hygiene, at Oskar Blues entire filler rounds are channeled out and tested in an in-house laboratory at pre-specified intervals. This makes it easy for connections to be made between the individual filling valves and the tested cans and any necessary measures to be accurately taken to safeguard microbiological safety.

"Our team must make sure that each can of beer is just as good as the one before it – if not better," says Weatherwax. "This is part of our company strategy; our new KHS filler does a lot towards helping us keep to this."

Numerous awards and good press

The high quality of Oskar Blues' beer is regularly confirmed.  Whether it's awards from the Great American Beer Festival, the World Beer Championship, the World Beer Cup, et cetera, et cetera, et cetera, the brewery has won medals in countless competitions. Just recently it proved highly successful at the United States Open Beer Championship, for instance, making number 10 in the top ten breweries of 2013 and thus becoming one of the companies to win the most medals for their submitted beers. Big-name and small craft breweries alike took part in the United States Open Beer Championship, with a total of 2,500 beers in 68 different categories competing against each other in 2013. Oskar Blues also owes much of its fame in the USA to numerous press releases. For example, in 2005 the New York Times described Dale's Pale Ale as "the best pale ale" and in 2008 counted Gordon (now G'Knight) as one of its top 5 extreme beers. 

Considered sustainability concept includes breweries, restaurants and a farm

Oskar Blues is also renowned for its targeted sustainability policy, with Katechis bringing an old farm outside Longmont back to life in 2010. The farm now not only grows hops and vegetables but also breeds pigs and cattle. The idea is to use the hops to make beer specialties not produced as part of the standard program at the brewery pub and distribute these locally. Organically grown vegetables and farm-produced beef and pork find their way onto the tables at Oskar Blues Brew Pub in Lyons, at Homemade Liquids & Solids in Longmont (opened in 2009) and at the recently established Chuburger burger bar opened in March of this year.  Another aspect of Oskar Blues' sustainable economy is that kitchen waste and spent grain are used to help feed the free-roaming, all-naturally raised cows and pigs at the Hops and Heifers farm. Smiles Katechis, "Both we and our restaurant customers profit from the idea of a sustainability cycle. Our restaurant visitors can enjoy home-produced, top-quality and therefore very tasty food served with our quality beers. And what's more, we can make good use of the waste products we formerly had to dispose of."

Win/win situations permanently established

All told, it's this permanent creation of win/win situations that has brought Oskar Blues such great success. This is also echoed in its distribution policy. New US states are only included in the distribution area when Oskar Blues has made sure that local representatives can present its beers to their best advantage. To this end, expertise on Oskar Blues quality beers is passed on with the utmost professionalism. In this way both distributors and consumers benefit from a broad knowledge of the individual beer brands. A lot of interest is being shown in beers from Oskar Blues, with the brewery supplying 32 US states at present and also exporting modest quantities to Sweden, Canada and Great Britain. In the export business, too, it's very important to the brewery that their local partners have a maximum of expertise when it comes to selling Oskar Blues beers.

Number two among the craft breweries of Colorado and number 27 among the craft breweries in the USA

The biggest sales area to date is still Oskar Blues' home market of Colorado where it holds second place among the state's craft breweries. In the USA as a whole the brewery has worked its way up to number 27  (it was still ranked at 50 in 2011).

Craft brewery with a feel-good effect

To again quote Katechis, "Despite our truly pioneering success we haven't forgotten our core mission, which is – and always will be – to have fun at work. Incidentally, this was one of the reasons why we decided to build a new brewery and not just extend the old one. When visiting big breweries I often find the people working there to be cheerless, almost as if they'd lost their sense of individuality. I definitely don't want this to happen at Oskar Blues!"

You can see and feel that the people who work at Oskar Blues are more than happy here. In the production shop the KHS fillers run at high efficiency to the sound of music. Those who want to take a break can chat with colleagues in the cozy tap room while trying some of the home brew. Oskar Blues also offers a full program of sports which of course includes brewery cycling trips. Personnel can also have a massage – paid for by the company – and every Friday the whole team meets up for lunch. Another perk is that everyone who's worked at the company for two years is presented with a handcrafted REEB mountain bike in recognition of their services ("REEB" is "beer" spelt backwards).  

The next step: Cyclehops – or tacos, beer and mountain bikes

With so much enthusiasm for beer and mountain bikes rife in the company since its beginnings, Katechis' latest undertaking comes as no great surprise. At the end of 2013 he plans to open Cyclehops, a beer and taco bar with an integrated cycling store. Katechis grins. "We're going to carry on being creative and going against the flow in the future, too, and want to keep on surprising our consumers with plenty of new ideas. This is what life enjoyment's all about – which is what Oskar Blues has stood for right from the start." And that just about says it all.