Lazy Magnolia Brewing Company, LLC 7030 Roscoe Turner Rd. Kiln, MS 39556 Phone: 228-467-2727 Fax: 228 467-2723 www.lazymagnolia.com What are Petainer Kegs and Why Does Lazy Magnolia Like Them? Petainer Kegs are a family of innovative, recyclable ‘one way’ PET kegs with fittings specific for beer. PET bottles are ideal for storing beer, and we have a lot of experience with this type of package. When Lazy Magnolia started 10 years ago, we offered a take-home package called the Party Pig, technology pioneered by Coors and commercialized by Quoin Industrial, a spinoff from Coors. This selfcontained beer-dispensing unit based on a PET bottle is still widely used by home-brewers and commercial brewers. Its safety and reliability have been proven during the nearly 20 years the product has been available. We used Party Pigs extensively during our first three years in business, until our bottling line was installed and fully operational in 2008. Customers loved them, and they held up great in the market, both from a flavor stability point and from a usage point. Industry experts agree that properly handled PET containers provide great shelf life and flavor stability for beer. Petainer Kegs are based on the same container, but are designed for use in standard draft systems as a direct replacement for stainless steel kegs. Petainer Kegs are lightweight and built specifically for one-way use. Lazy Magnolia currently offers our specialty high-end products in the standard one-sixth barrel size, 5.16 gallons. Our customers will get the same number of pints as they will from every other 1/6th barrel keg on the market. The PetainerKegs use a standard Sankey D valve and will fit nearly all draft handles on the market in the United States. PetainerKegs are 100% recyclable, offering economic and environmental benefits compared to other kegs. PetainerKegs are shipped in a cardboard box for ease of stacking and palletizing. We recommend that the box be removed when the keg is placed into service, as the cardboard is the number one weakness in this package. With a little training and special attention the advantages of the PetainerKeg system far outweigh the minor inconvenience of the cardboard box. Parameter Empty Keg Weight Full Keg Weight Stacking with slip sheet Burst Pressure Temperature Storage Temperature Delivery Temperature Absolute Max Disposal and Use Video Specifications 0.498 pounds 44.72 pounds 2 pallets high >7 bar, 105 psi 68F, 20C or colder, LMBC recommends beer be kept below 38F 86F, 30C or colder 122F, 50C https://www.youtube.com/watch?v=gSXq6nXLaCc#t=20 1 Lazy Magnolia Brewing Company, LLC 7030 Roscoe Turner Rd. Kiln, MS 39556 Phone: 228-467-2727 Fax: 228 467-2723 www.lazymagnolia.com Petainer Keg Safety Plastic kegs have come under scrutiny due to recent reports of injury caused during their use. Lazy Magnolia is very aware of the issues and we responded by destroying our own fleet of heavy-duty plastic kegs from Plastic Kegs America. We have carefully evaluated the PET based kegs, like those from Petainer. These kegs have a long history, and have been proven safe for many years. The material has been proven over decades of use in the soft drink industry. The Petainer Keg is a light weight keg made from materials very similar to those found in soda bottles. They have additional oxygen and light blocking materials to improve beer shelf life, but they are fundamentally soda bottles. In contrast, the heavy duty plastic kegs from Plastic Kegs America, shown on the left below, are thick walled containers. Figure 1. Heavy Duty Kegs from Plastic Kegs America. Figure 2. PET kegs from Petainer. What are the risks of a petainerKeg™ bursting? When filled, handled and transported correctly, petainerKegs are completely safe. For your security the following should be observed: Avoid sharp objects. Maintain the correct filling pressure (Max 3bar). Always handle with care. Burst pressure of a petainerKeg™ is 7bar. 2 Lazy Magnolia Brewing Company, LLC 7030 Roscoe Turner Rd. Kiln, MS 39556 Phone: 228-467-2727 Fax: 228 467-2723 www.lazymagnolia.com Why Petainers are a Great Choice for Our Distributors The Petainer Keg family offers a significant breakthrough in the sales and marketing of volume beer, wine and other beverages. It opens up new sales channels and markets and provides a step change in environmental performance – as well as reducing costs and improving cash flow. LMBC does not charge a deposit on Petainer Kegs. Currently in all of our markets we have a $50 deposit on all stainless kegs. Stainless kegs are long lived but there are hidden and deferred costs associated with maintaining a fleet of stainless kegs in the marketplace. The industry average yearly loss rate on stainless kegs is 3%, a cost which is ultimately borne by distributors and retailers. For our average distributor with sales of 50BBL per month, 40% draft, and 80% of draft in SB, the distributor holds 288SB and 24HB in inventory (warehouse and trade), a total of 312 stainless containers. The deposit on these kegs is $15,600. Although most distributors pass this deposit on to the retailers, and thus have very little exposure to the deposit, differences in local deposit rates and brewery deposit rates can create significant distributor exposure to deposits. Depending on the carrying cost of money, the interest expense associated with picking up new brands can be as much as $1000 a year. With loss rates of 3% on stainless containers, there is a deferred expense related to the loss of 3% of the fleet every year. Using the example above 3% of the average keg fleet is 10 kegs per year. The distributor is compensated for $50 of the loss but with an average replacement cost of $125 per container (more for HB), the distributor ends up with a hidden cost of ($125-$50)*10 kegs lost, $750 per year. By using stainless kegs the average distributor realizes deferred and hidden costs that exceed $1500 per year. This is very real money that eats into margins, and steals money from value-add activities that will grow brands and sales. This cost is real, just hidden, and applies to every brand in house. Additionally, as new brands are added to the supply chain, space used to store up empty cooperage represents lost revenue both for the distributor and the brewer. Petainer kegs are shipped out to the accounts, and then there is no reason for the distributor to ever touch the container again. No back haul to the warehouse, no bookkeeping for deposits, no storage of cooperage, no lost keg fees all add up to less headache in the long run. In all the transaction starts to look a lot more like bottle sales. Fire and Forget. The one weakness of the package is the cardboard box. Inside the brewery we have a special tool that allows us to lift the keg by the neck, avoiding putting additional stress and wear on the kegs and their boxes. 3 Lazy Magnolia Brewing Company, LLC 7030 Roscoe Turner Rd. Kiln, MS 39556 Phone: 228-467-2727 Fax: 228 467-2723 www.lazymagnolia.com Why Petainers are a Great Choice for Our Retailers For a typical on-premise account, Petainers are a great choice. For a typical account with 5 taps, the account will generally have as many as 15 kegs onsite: one on the handle, one in backup and one empty sitting out back. With 15 kegs out of the warehouse, the account has $750 tied up in deposits on those stainless kegs: money that is not being very productive. They also have the exposure of lost kegs, with particular risk to the empties that are no longer in the cooler or the draft box. With Petainer kegs, there are no empty kegs stored outside the cooler. No space is wasted to store a high value, easily stolen, stainless keg that will become a decoration in a college dorm room. When an account puts on a Lazy Magnolia Brand packaged in a Petainer keg, they will typically get back a $50 deposit that is currently held on the keg that just came off the handle, plus another $50 associated with any back up kegs, and potentially another $50 held on the empty keg. In total, an account switching to a Petainer may get as much as $150 back against a cost of $80 to $100 for one of our high end products. In total, a new retail account will see $50 to $70 positive cash flow on a keg of beer. They get paid to take the brand on. That allows our retailers to focus on what they do best, selling beer, not worrying about what to do with empty kegs. At retail Petainers have two weaknesses. The cardboard box can break down in a cooler, especially if it gets wet. The boxes are only intended for shipping purposes. As soon as the Petainer is delivered to the account, the box should be removed. A lifting tool, shown on a previous page may be used, and we are willing to support distributor/retailer acquisition of the tool. The 2nd weakness is related to an inherent safety feature of Petainers. Once tapped, the Petainer is permanently open. This eliminates the danger of empty, pressurized bottles. However, this safety feature can present problems for line cleaning and “Tap Takeovers”. This is easily addressed with a dummy valve. Take a standard beer coupler, and install blanks or valves on the gas and liquid ports. Vent the pressure on the Petainer using the safety pressure release valve (PRV), carefully remove the tap, and quickly replace with the dummy keg coupler with the valves closed. The beer will stay carbonated and can be placed back into service when ready. 4 Lazy Magnolia Brewing Company, LLC 7030 Roscoe Turner Rd. Kiln, MS 39556 Phone: 228-467-2727 Fax: 228 467-2723 www.lazymagnolia.com Cleaning a Beer Line with a Petainer Keg on the Line To disconnect: 1. Position the keg in an upright position. 2. Wrap a cloth around the fitting and dispensing head. a. The cloth catches any beer that might drip from the keg coupler b. If the pressure is not released properly, the cloth also prevents the person from being sprayed with beer. 3. Pull the dispensing head handle upward. 4. Release pressure through the automatic pressure relief valve. a. Failure to vent the pressure from the keg before removing the coupler is going to create a beer spewing event. Not dangerous, just messy. 5. Turn the dispensing head counter-clockwise and gently remove it from the keg, 6. Keep the keg upright and cover the ‘open’ fitting. a. A keg kept cold will maintain carbonation for about 1 hour b. A keg will quickly reestablish the correct carbonation level within an hour of being connected back to CO2 lines. c. If the keg is removed for more than an hour, replace the keg coupler with a dummy coupler, made from spare parts. To Reconnect: 1. Push the dispensing head into the ‘open’ fitting. 2. Hold the fitting with one hand, and with the other, turn the dispensing head clockwise until it stops. 3. Keep hold of the dispensing head, release the keg and push down the dispensing head handle. The keg is ready to dispense. 5 Lazy Magnolia Brewing Company, LLC 7030 Roscoe Turner Rd. Kiln, MS 39556 Phone: 228-467-2727 Fax: 228 467-2723 www.lazymagnolia.com Why Petainers are a Great Choice for Consumers Most kegs that are lost, are lost at the consumer level. Someone buys a keg and pays the deposit to the retailer. Many times, the consumer feels like they paid for the keg outright and has no intention of ever returning the keg. A $50 deposit is simply not enough incentive for some people to remember or go to the trouble of returning a keg to the retailer. Petainer kegs allow consumers to treat the keg just like they do bottles. Buy and Forget This makes purchasing a keg easy for consumers, easy for the retailers that cater to them, easy for the distributors that are responsible for the lost kegs, and easy for the brewery. The kegs are 100% recyclable, easy to carry, safe, and have a lower total supply-chain cost. 6
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