Spoetzl Brewery

BACKGROUND:

The Spoetzl Brewery is the smallest, second-oldest and last independent brewery in Texas. In 1915, it bought the Shiner Brewing Co. and began brewing a heavy lager beer. Later, Spoetzl embarked on a five-year expansion program in 1970 that brought in cans, increased annual capacity from 24,000 to 44,000 barrels, and changed the formula of the beer from a heavy European lager, by gradually lightening the formula to attract younger drinkers without alienating their traditional drinkers. In 1974, Spoetzl introduced a dark bock beer, which today accounts for 80-85% of overall sales. During the 1970s and the 1980s, the company priced its products competitively with the help of the Texas legislature, and a bill prohibiting manufacturers from selling directly to retailers allowing it to sell to retailers as they had no wholesaler.

After Spoetzl’s acquisition by Cambrinus Importing Co. in 1989, they continued to capitalize on its high quality Shiner beer and little brewery status, to compete with the higher priced premium beers. Distributors from Atlanta, Memphis, and Nashville were also test marketing the Shiner Premium and Shiner Bock beers. As marketing predicts an annual sales increase of 15-20% in Texas, Spoetzl faces a dilemma whether to expand capacity or not. In addition, the forecast demand for out-of-state sales is very unpredictable.

MANUFACTURING PROCESS:

Brewing:

The brewing process (as seen in Exhibit 1) starts in the malt mill where malted barley is augured to crack kernels of malt. The malt is then weighed on a hopper scale and dumped into a mash cooker tank with corn and hot water from the onsite artesian well. It takes about 50 minutes to load the mash cooker, which holds 100 bbls of mash. The mixture of ingredients determines whether the beer will be Shiner Premium or Shiner Bock. The mash is then agitated and heated to gelatinize the starches, and the resulting concoction is called sweet wort. The mash tank has a false bottom that, with the malt, strains the sweet wort as it passes into Brew Kettle No.1. It takes 2 hours to strain the wort, and another 30 minutes to clean up the mash cooker before the next batch. The spent grain, high in protein, is fed to cattle owned by the brewery.

Brew Kettle No.1 is a 75-barrel kiln. Hops are fed into the kiln where they are mixed with the sweet wort and brewed vigorously for one hour. The hops give beer its distinctive flavoring, increase foam retention, and act as a preservative. After brewing, the wort is drained into a whirlpool tank for clarification and then the clarified wort is pumped into the cellar where it passes through a cooler which lowers the temperature of the wort from 212 degrees F to 54 degrees F. The wort is then pumped into a fermenting tank. During peak demand periods four employees are assigned to the mash preparation and brewing activities each working day. Each brewer is given complete responsibility for a single brew cycle which begins with cleaning and loading the mash cooker, and ends when the wort is pumped into a fermentation tank. The brewers are assigned to sequenced work-shifts where each brewer’s workday starts approximately two hours before it is their turn to clean the mash cooker. The staggered work-shifts result in two employees working in the brewing operations throughout the day. The brewing process usually operated 18-22 hours per day, five days per week.

Multiple brew kettles fill up a fermenting tank and when full, yeast is added in-order to begin the fermentation cycle. The fermentation cycle takes 10 days, after which the liquid is called beer. After fermentation the beer is pumped through a cooler, which lowers the temperature to 32 degrees F, into ruh storage. Here, secondary fermentation takes place and the maturation of the beer begins. The beer stays in ruh storage for 12 days and then filtered to remove sedimentation, injected with carbon-dioxide, and routed to finishing tanks where further maturation takes place. The beer stays in the finishing tanks for at least 3-5 days to maximize the quality. The beer is then pumped through a finishing filter, which polishes and brightens the beer, making it ready for packaging. Finally, the beer passes through government meters on the way to the package release tanks which directly feed the packaging lines.

Packaging: 

The beer is packaged in long-neck returnable bottles, short-neck disposable bottles, cans, and kegs. A single bottle type is run each day and changeovers happen at the end of the day. The packaging process is similar for bottles and cans but differs for kegs in terms of the quality inspection and lack of much automation (Exhibit 2).

Brewmasters:

Brewmasters schedule the brews each day. The system requires that customers place orders 30 days in advance of shipment and the brewmasters study historical demand patterns to determine the total volume and mix of premium and bock beer. They schedule the packaging lines based on the orders scheduled for delivery during the coming week. To keep the beer fresh and to maintain low levels of finished goods inventory, the output rate of the packaging operation matches the demand rate. The beer is kept in finished goods inventory for not more than two weeks, and the beer itself has a four-month shelf life after which the quality begins to decline.