Ölgerðin relies on cloud-based services for its new canning line

Andri Þór Guðmundsson is the CEO of one of Iceland’s oldest and biggest companies. Ölgerðin Egill Skallagrímsson was founded back in 1913, and its first product, the sweet Egils Malt extract, is still highly popular in its home market. Not even the label has changed. “The drink is inseparably linked to Iceland’s history,” says Andri with a smile. It seems that this more or less applies to the entire company. Ölgerðin’s IPO took place in May, and besides financial considerations the CEO gives this reason for it: “It has always been my opinion that a company of this size and age has such strong roots in the Icelandic community that it belongs to the public.” 

“Ölgerðin” means “The brewery” in Icelandic, but the beverage company’s portfolio extends far beyond beer, ranging from still water, alcopops and a wide variety of soft drinks and lifestyle drinks right through to spirits. Ölgerðin not only produces numerous brands of its own like Gull, Borg, Appelsin or Brio, but also brews beers under licence and contract-fills beverages for international brand owners. In 2010, the microbrewery Borg Brew House was set up. “It was not until 1989 that beer was legalised in Iceland. Up until then, beer with an alcohol content was brewed exclusively for sale in duty-free shops. The country had a lot of catching up to do in beer culture. With the Brew House, we gave our brewmasters a playground for experimentation,” explains Andri. Further lines of business are imports and the representation of many international food and cosmetics brands. 

Observable shift on the market from PET bottles towards cans 

The COLLAB series’ success and the plans for future exports were among the reasons prompting the capacity upsize, which has meanwhile been completed. But what finally tipped the scales was a marked increase in sales figures for 0.33-litre cans in Iceland. Ölgerðin has for some time now observed a shift in consumer preferences from large PET bottles towards single-serve units, and quite generally away from PET towards cans, says Andri, adding: “Today, we fill significantly more containers than five years ago. In 2021, we filled 49 million litres into 84 million units, mainly into 0.33-litre cans.” That is why Ölgerðin needs substantially more capacity for cans, not only for its own brands but also for those the company contract-fills for its partners. Prior to this project, two PET lines and one combined line for glass and cans have been up and running. 

“It was never in question that we wanted a turnkey solution,” emphasises Andri, who goes on to say: “In the beverage sector, we rank among the relatively small companies and do not have the skills, experience and manpower to install such a line on our own.” And Guðni Þór Sigurjónsson, who is the director responsible for new products and quality and has co-headed the project right from the start together with technical director Margret Arndardottir, adds that this applied equally to planning: “When the project was kicked off in late 2018, we decided against doing the planning work ourselves. It has given us a sense of security to know that planning is done by experienced specialists. We talked to various vendors and in the end opted for Krones. The company served us very well and fast, the requisite specialists were available when we needed them and travelled to Iceland whenever necessary.” What’s more, Ölgerðin has been relying on Krones technology for decades now and, as Andri puts it, been won over by this supplier’s experience, service support and reliability. 

Innumerable product variants on a single line 

The new canning line has increased Ölgerðin’s total filling capacity four times over, from roughly 15,000 to 60,000 containers per hour. That enormously upsized capacity is not least due to the high product diversity, as Guðni explains: “I think it is probably very unique worldwide that so many different SKUs are produced on a single line. Since that entails many change-overs, the line rarely runs longer than two to three hours at a time, so we need the high speed.” With a wry grin, he adds: “For a German engineer, that’s most probably an efficiency nightmare.” The director spent a few years working in Heidelberg, so he knows what he’s talking about. 

Almost all products, most particularly all soft drinks, are now handled on the new line, with the existing combined line used for minor batches. Beer can be filled on both lines. Ölgerðin will continue to fill the smaller brands on the old line, thus maximising production flexibility.

I think it is probably very unique worldwide that so many different SKUs are produced on a single line. Since that entails many change-overs, the line rarely runs longer than two to three hours at a time, so we need the high speed and flexibility, plus short change-over times. Guðni Þór SigurjónssonDirector responsible for new products and quality at Ölgerðin Egill Skallagrímsson

Guðni was particularly eager to see how the line would cope with filling the new collagen drinks: “The large amount of protein – almost six grams per can – led to a lot of foam in the old line. Fortunately, we have not seen this in the new line, which handles collagen very well. That’s also true for the CIP system: Since the collagen is obtained from fish, extra-thorough cleaning is vital at beverage change-overs. Of course, the drink does not taste of fish, but consumers that have fish allergies need to be absolutely certain that no residues whatsoever can be found in other products. All our tests show spectacular results confirming this.” 

What’s special about the canning line is the high flexibility it provides in the dry end. Packaging variants range from 2x2- or 3x1-over-the-top-open and over-the-top-partly-closed, 10-container fridge packs and 12-container trays right through to wrap-around cartons with 24 or even 36 containers for export. The smaller multi-serve packs are handled on a multipacker from another vendor and then packed in wrap-around cartons or on trays in the Variopac packer.

But no matter which packaging variant is processed on the line, it will definitely not contain any plastic material. “Right from the start, we’ve planned for no plastics whatsoever in the new line,” explains Gunnar. All products are packed exclusively in paperboard. The company no longer uses a plastic ring to hold six cans together in a stable pack as it constitutes a danger to many marine creatures. Nor are any packs wrapped in film. That fits in perfectly with Ölgerðin’s sustainability focus. The company has been a member of UN Global Compact since 2013 and has also set itself a clear target for limiting global warming to 1.5° under the Science Based Targets initiative.

Digital safety rope between Neutraubling and Reykjavík

Like all Krones lines supplied since 2020, the new canning line has been designed as a Connected Line, providing access to the Krones cloud and all its digital services. For Iceland, a remote island in the North Atlantic, this direct digital link is a significant aspect because it takes some time until technical help from Denmark, for example, arrives – which would mean long line downtimes in the event of a fault. Krones’ new digital options provided under its Service Level Agreement Performance supply the appropriate remedy. It includes not only various Digital Services  (see box for details), but also a fixed contact person in the technical consultancy team, monthly reviews of machine performance and suggestions on how to improve the production operation. “That gives us the reassurance and reliability we need. We can hook up with Krones online and join forces with them to tackle any questions arising,” emphasises Andri. Guðni also expects less downtimes because any faults can be remedied fast and production can be correspondingly optimised: “It’s really important to us that we can see at any time how the line’s performing. If there are any standstills, we can then use the data gathered to pinpoint the spots needing to be improved.”