MBAA – RMD OOT Meeting Glenwood Springs, Colorado September 17, 2011

1. Saving Extract Running a Cost Efficient Operation Todd W. Hansen Resident Brewmaster Anheuser-Busch Inbev Fort Collins, Colorado MBAA – RMD OOT MeetingGlenwood Springs, ColoradoSeptember 17, 2011

2. Brewery costs • Whether a large or small brewer, Cost Management should be a key component in every decision made with your business. • You may think you’re in the business to make beer……….actually you are in business to make money! • Each month we read about or meet peers who are closing shop due to costs and a lack of investors.

3. Brewery Costs • Raw Materials • Utility • People • Packaging Materials • Capital Investments • Facility • Maintenance • Sales & Marketing

4. Brewery Costs • The good Businessman-Brewer has strategies in place to understand the costs – how best to contain the costs – and always has a “Plan B” if costs begin to control the business. • Raw Material costs, for example, are very volatile due to seasonal changes, vendor performance and variation within your own process.

5. Brewery costs • Today, I want to talk specifically on managing Extract. That component of the Raw Materials derived from the malts and adjunct by which our beers depend. The business component by which our livelihood depends and can make the difference of a good year versus a tough year.

6. What is Extract? • It is the Carbohydrate, Protein and Enzyme package contained within the malt and adjunct that is dissolved during the mashing process.

7. What is extract? • Fine Grind vs Coarse Grind • Lab micro mashing is performed on finely ground malt to obtain an extract value and again on a more coarse grind to obtain a similar value. • Fine grind extract values are higher than Coarse grind values by 1 to 2%. • Coarse grind values are more typical of what a brewhouse will operate with.

8. Raw Material costs(Spot prices from Brewer’s Supply)

9. Brewery Costs • Based on the previous chart, a truck load of 2 Row malt will cost $ 13,800 (40,000 lbs), without shipping costs. • 2 row malt for typical 25 bbl brew of 12dB will cost approximately $405 based on the previous chart.

10. Raw Material Costs • The Brewmaster needs to tune the process and educate the brewers to maximize all opportunities associated with capturing the extract within the grain. • Everyone should understand: Spill grain or spill wort or spill beer…….you’re spilling extract and therefore spilling profits!

11. Areas of Opportunities • Grains Receiving and Handling • Milling • Lauter Tub • Brew Kettle • Hot Wort Tank • Tank to tank losses • Yeast Losses • Packaging Losses

12. Grains Receiving and Handling • Does your inventory balance each week? (Beginning Inventory + Receipts – Brews Made = Measured inventory of raw materials?) Ok with the gap? Can you do better? • Grain Breakage: Unloading to the mill inlet. Grain Breakage ok? Checked at each step? How often is it checked? Use Sieve Analysis pans 10,14 and the pan. • Dust systems return to scale hopper or lost? Is it balanced? Pulling out whole kernals? Test have shown up to 40% extract in the dust. Watch for a taste impact. • Scale accurate? How do you know?

13. Milling • Do you perform routine Sieve Analysis including a physical inspection of the grind?

14. SEEDBURO Sieve Analysis Shaker

15. Sieve Analysis Profiles

16. Milling • Do you perform routine Sieve Analysis including a physical inspection of the grind? • Grind weights checked? Actual vs Recipe. Over-grinds eat at your margin!

17. Lauter Tub • Lautering is a flexible process and gives the brewer opportunity to be creative and get at the extract without effecting quality or through put. Attention must be paid to: • Mashing pH, temperature and profile • Runoff temperature (includes Sparge Temp. and initiation point) • Lautering speed (Rake and Draw Off) • Mash Up cuts waste sparge, try CO2 or Wort. • Track 1stWort Balling. Does it meet your target limits? This indicates proper mashing performance. • Last Hansel low enough?If greater than 1.5 dB you are loosing extract. Can the higher balling wort be used as mash water?

18. Brew Kettle • Track your Kettle Fill Balling. A consistent balling will indicate proper and consistent Lautering Procedures. • Stack Condensate. Check your stack condensate half way through your full boil. Does it have a balling? If so you have extract going up the stack and down the drain.

19. Hot Wort Tank • Significant taste quality is held in balance here: How much trub/wort to carry over vs taste implications vs extract loss to give up. • Knock out velocity and recirculation velocity need to be optimized to “pack tight” the trub pile and minimize carryover and wort entrainment. • Extended wort drain down and pile break up without trub carryover. • Perform a yield balance. Original Gravity and volume versus theoretical.

20. Tank to Tank Transfers • Vessel to Vessel and Tank to tank volumes should be measured and tracked. • BH lines with wort should be captured or pressed out. • Hoses and lines should be pressed out with De-aerated – filtered water, without baptising. • Monitor tank OG to gauge level of baptism. • Foam beer can be captured and blended back in the Hot Wort Tank.

21. Yeast Losses • Yeast solids can contain 30% to 70% usable beer. • This beer can be captured via decant, centrifugation or filtering and returned to a new fermenter.

22. Packaging Losses • Release lines are typically packed with chilled deaerated water and pressed with beer into the filler. Additional bowl fills and dumps are performed to insure brand integrity. • Can this be minimized to just an interface dump? • Can a brand to brand interface be performed? • Can flushed beer be captured and blended back in filtration? • Can dumped packaged beer be dumped back into the Hot Wort Tank?

23. Considerations • Records should be kept and monitored for all grain, wort , and beer movement (beyond ATF), to track and understand your efficiencies. • Routinely measure your process efficiencies for extract optimization. • Grain losses • Lautering losses • Hot Wort Tank Losses • Cellar Losses. • Brewhouse Yield • A data base Statistical Analysis program such as MINITAB or options available within EXCEL are excellent for monitoring trends. • Involve your brewers in optimizing your processes to minimize the losses. • Remember………..Big gains are in the small details !

24. Spill grain or spill wort or spill beer…….you’re spilling extract and therefore spilling profits!

25. THANK YOU!