Renting & leasing are not the same: be smart about your kegs
- Global Keg
The demand for kegs is at an all-time high, and so is the amount of competition in the beer industry. There are now well over 19,000 breweries in the world, with more opening every day. Growth-focused brewers of all sizes want to win more tap handles, gain new retail accounts, and get more of their beer in the hands of thirsty customers. It doesn’t matter if you brew on a micro, regional or global level, you need more kegs to meet the growing demand.
Keg Ownership Costs More Than Time & Money
Kegs are expensive to own and leasing them is even more expensive. Chances are, you don’t already own all the kegs that you’ll ever need to meet your customer needs and demands. Kegs are the unsung steel heroes that keep your precious cargo safe on the journey from your home base to the POS. As a brewer, you run the risk of losing a significant percentage of your capital investment when those kegs get damaged, lost or stolen. You know some of them will disappear, and it’ll likely be even more than you think. The real cost of keg loss adds up fast when you need 5-7 kegs per tap handle you control. But whether you own or lease kegs, the total cost of keg liability always falls on you.
Approximately 207.4 million barrels of beer were sold in the U.S. in 2017. That’s a lot of beer… and the draft component needs a lot of kegs. It’s not uncommon for the rate of keg loss to reach 10% (and sometimes, even more, depending on distance traveled). You don’t have to do the math to know that keeping track of their assets costs brewers a lot of time and resources not to mention the capital required to replace damaged or missing kegs to ensure they are always available when customers need them.
Big or small, most breweries have no idea when their kegs will return. The bigger brewers lose more kegs by volume, while the smaller brewers have a larger percentage of their overhead tied up in kegs. Depending on the operation, a single brewer has hundreds and sometimes thousands of kegs out in the world waiting to be returned to the brewery to fill and turn back around. Owning your float costs more than time and money. Keg ownership costs you opportunity too.
The average keg is not always in use; often sitting in your warehouse, or your distributor’s for months. This unfortunate fact limits the average amount of turns for a single keg to 2 or 3 deployments annually. Why own something that you’re unable to use for half the year? It’s not a beach house. Your keg shouldn’t get a vacation for half the year if you don’t. Each of your kegs should be working for you, every day.
When you work with Global Keg you benefit from the scale and reach of a technology-enabled asset pool that enhances your supply chain. Multiple brewers renting kegs from the same global pool delivers tangible benefits to all.
The Hidden Costs and Limitations of Keg Leasing
The initial up-front cost to lease kegs is cheaper than purchasing them, but leasing kegs can be deceiving and often limits a brewer's growth. The total cost of leasing includes reverse logistics, warehouse costs to house dormant kegs, and the recurring expense of replacing lost kegs and acquiring more kegs for expansion. Many leasing companies demand an upfront deposit, which is essentially ‘dead capital’ for a brewer. Bottom line, as a brewer you still don’t own the kegs. You have all the responsibilities that come with ownership and none of the benefits. But like a leased car in your garage, you are paying for it whether you drive it or not. Keg leasing and ownership puts all of the supply chain responsibility on the brewer.
When a brewery leases kegs, 100% of the liability falls on the brewer’s shoulders. This liability translates into increased operating costs and lost profits. What if your brewery could streamline keg costs while eliminating all keg loss and liability?
The Unmatched Benefits of SmartKeg™ Rental
Keg rental (aka the “pay per fill” model) allows the brewer to pay only for the kegs you need, when you need them. Renting kegs also transfers the burden and liability away from the brewer. You don’t have to keep wasting money replacing lost or stolen kegs, losing sales when orders exceed your available keg inventory, or allocating resources to keep track of them. Avoid liability for kegs altogether and focus on your core business.
Global Keg Does Business On Your Terms
- 0% Keg Liability for brewers
- No onerous contracts
- Track your beer around the globe for quality control
- Every keg arrives on-time and is guaranteed to be Fit-for-Use
The on-demand rental model delivers kegs in the precise quantity on the day you need them. You fill them and ship them to your customers. The ‘ship it and forget it model’. Global Keg is responsible for all aspects of keg retrieval.
Global Keg is revolutionizing the keg rental industry with SmartKeg™ which means 0% liability for brewers and no long-term contract. You do business with us because you want to not because you have to. Our SmartKeg™ technology uses unique identification on each keg with RFID technology to accurately track your beer as it travels around the globe. Some of the biggest names in beer around the world benefit from Global Keg’s SmartKeg™ technology.
Every SmartKeg™ is individually identified with an RFID tag and barcode label that allows for tracking and tracing the discrete movement of each keg around the globe while providing you access to real-time data and customized tracking reports. SmartKeg™ technology keeps track of which brew is in each keg, when it was filled, the product expiration date, and where the keg/product moves downstream. All of this data can be accessed through the SmartKeg™ portal on Global Keg’s website. This information makes is easier to proactively manage Sales, Marketing, and Distribution while strategically targeting new markets and keeping close tabs on product quality.
How Do We Do It?
Most keg suppliers have a limited number of available kegs and rely on one or two central hubs where they collect and distribute their kegs from. Global Keg not only owns the largest pool of kegs in the world, we also have the fastest turn around of anyone in the industry. How? We have hundreds of asset reclamation centers around the globe that receive, inspect, clean, repair, warehouse, and distribute our kegs and ensure every single keg is fit-for-use when a call comes in from a brewer. Our SmartKeg™ turnaround time is second to none because we’ve dramatically reduced the distance between wholesalers, retailers, and keg collection facilities.
Renting your kegs from Global Keg also gives your operation more flexibility because you aren't limited to the size, spear type, or quantity of the kegs you already own or lease. Global Keg’s scale and fleet size mean brewers have access to a greater selection of keg sizes and spear types to meet the needs of your customer, regardless of industry trend or individual need.
Global Keg is the worldwide leader in keg rental and reverse logistics solutions for breweries. We ship to 5 continents, 40 countries, and more than 500 cities around the globe. Whether you need 200 kegs or 20,000 kegs, we are 1000% committed to providing you with the kegs you need, exactly when and where you need them, so you can focus on what you do best… brewing great beer.