Sam Hoffman, owner of Red Lodge Ales, estimates he was losing money on every case of beer he was bottling. Changes in consumer behavior, increased competition, aging equipment, and rising costs of bottling all contributed to his decision to add a canning line.

“The last few years have been challenging for brewers like us,” said Hoffman.

New breweries continue to erode market share, and increasing competition from out-of-state beers have challenged established brands like Red Lodge Ales, which is now more than 20 years old.

Hoffman said he made the switch to cans because “it’s where the market is going.” A 2018 consumer study by Nielsen predicted canned beer will outsell bottled beer by 2021.

Red Lodge Ales

Sam Hoffman is shown in Red Lodge Ales brewing facility in Red Lodge. The company is now producing canned beers.

And, those beer drinkers are increasingly reaching for microbrews. About 40 percent of the 21-plus population identifies as a "craft drinker," according to the National Brewers Association. That's up from 35 percent in 2015, and the strongest market among those beer enthusiasts are predominantly males ages 21-34, a critical market to Hoffman that is increasingly drinking out of cans.

In Montana, Red Lodge Ales was stagnating in bottles, Hoffman said, especially in big beer markets like Bozeman, which went from having a handful of local breweries to more than a dozen in the past several years. 

Canned beer may seem trendy, but “you can take it on the river, you can take it on the golf course, you can take it skiing, you can take it hiking, and then just flatten it down and take it out with you,” Hoffman said.

Red Lodge Ales

A canning line operates at Red Lodge Ales in Red Lodge. The company is now producing canned beers.

And, in Montana, cans are a lot easier to recycle than bottles. Though bottles have been touted to provide drinkers a superior taste, Hoffman said the reasons were still overwhelming to make the switch to cans.

“A lot of people will try to tell you that you can save the planet by drinking beer out of a can. I’m not going to do that," he said. "I think there’s consequences and impact to everything we do.”

What he will tell you is that canning is a lot more efficient, and therefore, it’s a lot more cost effective. Hoffman orders empty cans and bottles from Colorado, and is able to get 204,000 cans on a truck, as opposed to 90,000 bottles, cutting his shipping costs in half. When they’re full, he can ship product to wholesalers with 80 cases on a pallet, as opposed to 72 cases of bottles.

Red Lodge Ales

Red Lodge Ales is now producing canned beers.

“The bottles were just starting to kill us,” Hoffman said. “Between the dying interest and the cost of bottles, we were forced to make the move.”

On the wagon

Tim Mohr, who opened Angry Hank's 13 years ago in a small garage in downtown Billings, has seen craft beer wane in recent years.

“The industry has really taken a dive,” he said.

That may be a bit overstated, but it certainly isn’t double-digit growth brewers saw in the early days of microbreweries. In 2018, small and independent brewers saw a 4 percent growth in production, according to the National Brewers Association. This is up slightly from the year prior in what the association describes as an overall down beer market, which dropped 1 percent by volume in 2018.

“Craft (brewers) maintained a fairly stable growth rate in 2018 and continued to gain share in the beer market,” said Bart Watson, a chief economist with the Brewers Association, in a press release, touting independent brewers for creating jobs, strengthening local economies, and being "community beacons.”

Yellowstone Valley Brewing

Patrons sit at the bar as bartenders pour drinks during a preview event at Yellowstone Valley Brewing on January 22 during a soft opening for the brewery, which closed and was remodeled following new ownership.

Distribution channels and increased competition have been creating issues in the industry, but this hasn’t stopped breweries from opening. The number of independent breweries in the country is nearing 7,000, up nearly 50 percent from 2013.

Mohr’s business model has been focused on brewing and distributing beer while operating a taproom. Though Street Fight, the brewery’s most popular beer, is on tap throughout Billings, Mohr wants to see it on the grocers' shelves.

“Draft was always so popular and so big, we never really had any beer to go into the cans.” Mohr is adding one more tank to his operation this year, which brings his brewing capacity to 16 tanks, “the last one that can fit in the building,” he said of the renovated 1916 carriage house in downtown Billings, where in he moved his brewing facility and opened a taproom (in 2014, the garage location closed).

Like others, Mohr is planning to start distributing canned beer. He’s been using a mobile canning operation, Montana Canning of Livingston, to can products on-site.

“As he gets busier, scheduling gets tougher,” Mohr said. “We decided to move forward on our own.”

Street Fight

Angry Hank's best-selling beer, Street Fight, is on taps throughout Billings, but hasn't been available in cans outside of the brewery. Brewery owner Tim Mohr is planning to add a canning line to the brewery and begin to distribute in grocery and convenient stores around Billings. 

Currently, Angry Hank's beer in a can is sold only at the brewery, but Mohr was eyeballing canning lines at the Craft Brewers Conference last April in Denver. The lines were longest, he said, at the canning companies — primarily United States, Canadian and Chinese manufacturers.

“It just depends on how much money you want to spend. The sky is pretty much the limit," he said.

Whatever he chooses, Mohr will have to keep his space in mind, and he’ll travel to Sidney later this spring to check out Meadowlark Brewing’s canning line, which can be deconstructed and stored when not in use. He hopes to be running his own canning line this fall.

“It does change the game for us. We can probably move a lot of volume if we have it in cans in stores,” Mohr said. “It will make us work harder.”

Red Lodge Ales

Mark Grissom stacks cases of new canned beer at the Red Lodge Ales brewing facility in Red Lodge.

Return on investment

For Red Lodge Ales, it’s taken a year — and a half-million dollars — to implement a canning system, but Hoffman said it’s already paying off.

“We just had a huge month in March. Just the interest I’m seeing, it’s pretty crazy,” Hoffman said. 

Red Lodge Ales

Frothy Czechmate Polsner fills cans at the Red Lodge Ales brewing facility in Red Lodge. The company is now producing canned beers.

The equipment, purchased new, was designed to fit into the existing space vacated by the bottler, which was relocated to Hoffman’s cider business, Last Chance Cider Mill, in Billings.

At best, the bottler could produce 40 bottles a minute, and Hoffman estimates the new canning system is producing 60 cans per minute, with a top speed of up to 80 cans every 60 seconds.

“We’re still figuring a lot of things out,” Hoffman said. His goal is to get all pieces running in balance to maximize the production line.

Last Chance Cider Mill

A "bomber" of Last Chance Cider Mill cider is seen fresh off the bottling line, which is now in operation at the Montana Avenue facility. The 25-year-old bottler has been "put out to pasture," said Sam Hoffman, owner of Red Lodge ales, where it will be asked to do far less volume than at Red Lodge Ales, which switched to canning its products in April. 

The crew at Red Lodge Ales was averaging about 600 cases of bottled beer a day, which took about six hours, assuming nothing went wrong. With the new canning equipment, the same amount of product can be made in about four hours.

Though it has shortened their workdays, Hoffman predicts they’ll be doing more volume per day as soon as all the kinks are worked out.

Plans are also to can cider, which is made in Billings. Bottling equipment from Red Lodge Ales has also been given a new home at Last Chance, where it will be used to produce “bombers” of cider, which command a higher dollar in the market, Hoffman said.

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Built in the mid-1990s, the equipment needed to be “put out to pasture,” though it’s still got some usable years left. Once the proper licensing comes through, he’ll also start making and canning cider in Red Lodge.

“We have been able to offset some of the competition in the beer market with cider,” Hoffman said.

The more the merrier?

For being the largest city in Montana, Billings isn't home to many large-scale beer producers. Yet, the revived Yellowstone Valley Brewing has risen in the beer market, and it's just rolled out its first batch of canned beer.

The brewing company was one of the first breweries to open in Billings in the 1990s, and the facility at 2123 First Ave. N. was designed to produce large volumes of beer.

Yellowstone Valley Brewing cans

Cans of Yellowstone Valley Brewing beer sit on display inside Lucky's Market on Friday.

“This is by far the biggest brewery in town,” said head brewer Andre Brown, who took over brewing operations as the business changed hands last year. “It’s totally made for production.”

At first, the main focus was bottling and distributing products regionally and out of state, but over the years that focus slipped and the location became more known for its live music and taproom than for its beer.

In 2018, after 22 years in operation, the brewery and live music venue changed hands. When the new owners took over, they found bottling was no longer viable.

“It was so old and nonfunctional, we scrapped it,” Brown said.

Yellowstone Valley Brewing

Mike Mathew, one of the owners of Yellowstone Valley Brewing, gives a tour to patrons during a preview day at Yellowstone Valley Brewing in January, shortly before the brewery reopened after new ownership. 

Instead, they’re running a brand-new canning operation, purchased from Wild Goose Canning of Louisville, Colorado. They’re able to produce 32 cans a minute with the system, which can be broken down and stored when not in use.

“That, compared to the bottle machine, is a Lamborghini to a Pinto,” Brown said.

Brown feels canning has become a much more appealing way to distribute beer. “With the technology we have today, the linings are able to store beer just as well as glass, and don’t have that metallic flavor you used to get in cans.”

Yellowstone Valley Brewing cans

Cans of Yellowstone Valley Brewing beer sit on display inside Lucky's Market on Friday.

Beer from Yellowstone Valley Brewing is on tap around town, and in late March, four-packs of tall boys hit grocery shelves. Consumers can get their hands on 24-oz cans of Black Widow Stout, Huckleweizen, an IPA, and Grizzly Wolf Wheat locally at Lucky’s, Zip Trip, IGA and Albertsons.

Running a 15-barrel brew house, Brown said the facility can kick out 950 gallons of beer doing double batches on a good day, and they're eyeing distribution in Eastern Montana.

Yellowstone Valley Brewing

Grain is ready to be loaded at Yellowstone Valley Brewing in January. 

Überbrew of Billings has also been competing in regional markets. The company brews and cans beer on contract in Colorado. The local taproom and restaurant on Montana Avenue also brews beer on-site, but doesn't have the capacity to brew locally on a large scale.

Though Billings brewers seem a bit behind their counterparts in the state, it's better late than never to the canning party. And though the wait time for canning equipment grows and the brewing industry changes, Hoffman said companies are increasingly catering to small brewers in America.

"It’s pretty amazing that we can put a pallet of empty cans in, do 60 cans a minute in that space, and have a finished case of beer pop out."

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Arts and Entertainment Reporter

Arts & Entertainment Reporter at The Billings Gazette.