A new non-profit organization is attempting to promote draft beer as the industry’s “most-ownable, differentiated weapon” in the on-premise channel, as well as the most sustainable choice in bars and restaurants.
A consortium of six global keg supply chain companies announced today the formation of the Steel Keg Association, a marketing-focused, non-profit with a goal of increasing the volume of beer and other beverages served via stainless steel kegs. Founding members include BLEFA GmbH, Hillebrand Gori, Micro Matic, MicroStar Logistics, Schaefer Container Systems, and Thielmann.
Dan Vorlage, MicroStar’s VP of global marketing, will serve as the association’s executive director. Speaking to Brewbound, Vorlage said the Steel Keg Association was born out of the COVID-19 pandemic when the beer industry was forced to go without draft beer due to lockdowns and on-premise shutdowns. Now, he sees an opportunity for the beer industry to play a part in those businesses’ recovery, win in bars and restaurants, while emphasizing the reusability of stainless steel kegs, with their 30-plus-year lifespans.
“The beer industry needs to take advantage of the moment, and make sure that we’re not losing momentum to wine and spirits because the people are going to be there [in bars and restaurants],” Vorlage said.
As such, Vorlage sees an opportunity for draft beer to play a large role in the recovery of on-premise establishments.
“[Draft is] just a really profitable, efficient product for bars and restaurants,” he said. “The more the industry can highlight that and lean into it and push it, the more the beer industry becomes part of this recovery story.”
Draft is already on the upswing, as NBWA chief economist Lester Jones recently shared. Citing Fintech data, Jones said draft beer sales to retailers in 2022 are outpacing 2019 levels. In fact, draft has captured 8% of the beer volume, nearly getting back to 2019 levels (9%), with all of that volume coming from aluminum cans. According to Jones, increased can production combined with “more steel [kegs] in the marketplace” will help alleviate the shortage of aluminum cans craft brewers are facing.
Even as the open-rate for bars and restaurants has now reached its highest average since May 2020, about three-quarters of the taps nationwide are flowing, according to BeerBoard. Filling up tapwalls across the country — which Vorlage calls beer’s marquee — will be important for the overall health of the beer category.
“When you see a tapwall that is half empty, that’s a signal to the consumer that that may not be the winning category,” he said. “As those have been filling up and look the way it’s supposed to, it’s the perfect showcase for beer.”
As bars and restaurants rebound, sustainability, efficiency and consumer experiences will be important to their operations, Vorlage said. And that’s another box keg beer checks.
“The beer industry has one of the original proven case studies in how to deliver a reusable container to market at scale, and that’s the steel keg,” he said. “We’ve never as an industry looked at it that way and we’ve never communicated it that way to bars and restaurants that are seeking that.
“They’re looking to eliminate single-use containers,” he continued. “They’re looking to eliminate plastic straws, and we’re looking to operate more sustainably. The beer industry has something that scratches that itch. It’s the only reusable container in a bar or restaurant.”
According to Vorlage, keg beer helps remove about 6 billion single-use containers from bars and restaurants annually. The Steel Keg Association’s marketing efforts around sustainability are backed by an ISO-14064 framework — the international standard for quantifying and reporting greenhouse gas emissions — and Life Cycle Analysis prepared by Deloitte.
“Steel kegs are truly one of the best examples of reusability and circularity, with decades of reuse potential,” Kyle Tanger, Deloitte’s U.S. managing director, said. “In the U.S., compared to single-use containers, steel kegs save over 400,000 metric tons of greenhouse gases (GHGs) and keep roughly 500,000 tons of packaging out of landfills each year.”
For Vorlage, he hopes a year from now the conversations around how draft beer can help in the on-premise recovery are manifesting themselves into wins.
“Draft is the heart of beer, and it’s the barometer of the health of our industry,” he said. “And I hope that Iit stabilizes and starts returning to growth, and we can all look back and say, ‘Hey, we all started to see it.’”