Schell’s to Boost Production Capacity With $2M Expansion

Schell’s to Boost Production Capacity With $2M Expansion

The expansion will increase the brewery’s current 150,000-barrel annual capacity by an additional 100,000 barrels.

August Schell Brewing Company, Minnesota’s largest beer producer and the nation’s second-oldest family-owned brewery, will soon boost its capacity through a $2 million expansion.

Kyle Marti, Schell’s director of sales and marketing, told Twin Cities Business on Wednesday that the expansion will increase its current 150,000-barrel annual capacity by an additional 100,000 barrels.

The brewery, located in New Ulm, produced 131,600 barrels in 2012, up from 125,000 in 2011. It expects to produce 140,000 barrels in 2013, and Marti said the expansion will prepare the brewery for future growth.

The expansion, which will begin in early May, will add 1,280 square feet onto the existing brewhouse and create a new 1,800-square-foot building. Among the new pieces of equipment that the brewery will install: a can filler that can fill 550 cans per minute and four 750-barrel fermentation tanks. (Schell’s now has six tanks of that size and a bunch of smaller ones.)

“The market will dictate how fast those go in,” Marti said of the tanks, although they’re expected to start being installed later this year. Each tank weighs 19,000 pounds and will need to be installed by cutting holes in the roof of the bottle house and having a 220-ton crane lower it from above the building.

Roughly 70 percent of the beer that Schell’s produces is part of its Grain Belt line, consisting of three domestic American lagers. The Schell’s brand, which comprises about 30 percent of the beer that the company produces, consists of various craft beer labels, some seasonal and some year-round.

Marti said the expansion will boost production capacity for both beer brands. The new fermentation tanks will all be used for the Grain Belt line, which currently uses some large fermenters and some smaller ones. After the new tanks are installed, they’ll be used exclusively for Grain Belt beers, freeing up the smaller tanks to accommodate more of the Schell’s craft beer.

Marti, who declined to provide Schell’s annual revenue, noted that the craft beer scene is exploding and said Schell’s craft beer sales were up 7 or 8 percent last year.

Schell’s is currently distributed in seven states—Minnesota, the Dakotas, Nebraska, Iowa, Wisconsin, and Pennsylvania. Marti said the expansion won’t boost that number as the company is “focused more on growing deep rather than wide” by increasing distribution in the states where it already has a presence.

Schell’s recently added two employees to its sales force and plans to hire one or two more in the coming months.

Schell’s was founded in 1860, and its brewery has been in the location since then.