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Smart savings to make brewery profitable

Entrepreneurship

Specialty beer is becoming increasingly popular in Guatemala. For the El Güin brewery, this means that what once started as a hobby project has now been expanded to form a serious business. The entrepreneur called in PUM for advice on ‘How to make the brewing of beer profitable, without huge investments?

Biochemist and PUM expert Frits Slotema has 42 years’ experience in brewing beer. He initially focused on expanding the brewing capacity. “The brewery was unable to produce more than 2500 litres a month. The limiting factor was the use of fermentation tanks. I explained to the brewers how they could use these same tanks more efficiently and thanks to my contribution total capacity was raised immediately to 3700 litres a month.”

Optimum brewing plan

Frits also saw opportunities for saving on raw materials. “The brewing plan at El Güin was far from ideal. By improving the situation and increasing the efficiency of the wort filtration, we were able to reduce the malt consumption by thirty percent”. Reusing the yeast also led to considerable savings. “Instead of using the yeast just once, they can now use it two or three times representing a cost saving of between 35 and 40 percent.”

Turnover growth

The changes to the production process mean that El Güin can now achieve a 25 percent increase in turnover, without any investments, thereby making the brewery profitable. Further growth can of course still be achieved by making investments. As Frits explained, “I advised the owners to think carefully about how big they want to become. That decision will determine the necessary investment costs and the numbers of staff needed.”

Safety measures

In addition to cost savings, Frits also identified plenty of room for improvement in the field of safety. “The fermentation tanks were located in an enclosed space, which could result in life-threatening situations, as carbon dioxide is released during the fermentation process. Staff were also working without gloves or safety goggles, even when filling the beer bottles. The filling process takes place under pressure and they have been extremely lucky that there have not already been serious accidents.”

'Our production is up by 35% and our costs are going down.'

Next step

The PUM expert expects El Güin to be ready for the next step, at the start of 2019. “The situation has exceeded all expectations, but at present the business is still more like a hobby, that has grown out of control. Up till now, the owners have only been willing to invest their own money, and the question is how much of a risk they are willing to take. The changes will at least make them profitable, and that alone is a step forward. If in a year’s time they decide they are ready to open up a new brewhouse, I will be happy to provide any assistance I can.”

José Manuel Gutierrez - Cervecería El Güin: "One of the best results of the expert’s visit is the fact that our business is growing. Thanks to Frits’ advices we are now saving up to 5000 US dollars a year on yeast recycling and we were able to almost double our fermenting capacity. Our production is up by 35% and our costs are going down. Sales have increased by 20-30%. All of this is creating new job opportunities for people in Quetzaltenango, especially in our departments of sales and distribution. We are currently applying for another PUM mission. We hope to keep on improving our processes and production facilities while decreasing production costs. Our first experience with PUM showed us there surely is even more to gain!"

Frits Slotema (70) worked for Heineken for 42 years, of which the last few years as technology manager. Since 2015 he is active as a PUM expert. Besides Guatemala he also visited Colombia, Peru, Bolivia, Kosovo and Albania for PUM.
This mission has been made possible thanks to our partnership with the Argidius Foundation (www.argidius.com). Argidius aims to help entrepreneurs to build profitable businesses and contribute to the sustainable development of their communities.