Worcester Business Journal

W hen consumers look at beer and soda bot- tles on store shelves, they see several brands competing for the same dollars, but to Central Massachusetts firms like Polar Beverages and Wachusett Brewing Co., all those bottles and cans mean money. "Virtually all the private labels in the northeast and the southeast come out of our factories," said Polar CEO Ralph Crowley Jr. "It's an important part of our business." In this concept known as co-pack- ing in the carbon- ated beverage industr y and known as contract brewing in the beer industry, large bot- tlers and brewers use their excess capac- ity not taken up by-house brands to package, label and sometimes distribute their competitors' products. This adds a different source of revenue for firms like Worcester-based Polar and Westminster- based Wachusett and enables their com- petitors to sell in the region without the pricey infrastructure. In the brewing industry, it specifically has led to the rise of the number of microbrews in the market. "Even though there's friendly compe- tition amongst our brands. We still feel we are working against the big power- houses of the world," said Ned LaFortune, founder and president of Wachusett. In July, Polar entered into a hybrid- ized venture with Connecticut-based Nestle Waters to bottle and distribute certain products, such as Nestle Tea, in cans while Nestle continues to make the bottled version. The deal could be worth upwards of $50 million in the next five years, Crowley said. Crowley wouldn't disclose an exact figure, but he said co-packing consti- tutes roughly 50 percent of Polar's reve- nues from its facilities in Worcester, New York and Georgia, having quietly built up an array of brands since the 1990s, like Dr. Pepper and Snapple. "You get dramatic efficiencies if you are running the plants at full speed. There is nothing worse than a machine that is sleeping," Crowley said. "The more you run the machines, the more your cost structure comes down for everything you do." A relative newcomer to the practice, but a company that has built it in to its fundamental growth plan, is Wachusett Brewing. When the company was look- ing to expand, it decided to put money into a canning line with more capacity Foreign Investment 9 e region's companies are expanding to new markets through foreign purchases and new client deals. WBJ >> To Subscribe Central Massachusetts' Source for Business News November 23, 2015 Volume 26 Number 25 www.wbjournal.com $2.00 Central Massachusetts is set to reap the rewards as the state's life sciences push enters the manufacturing phase. 12 Q&A with Geoffrey Dancey, who rose from intern to president in 14 years. Shop Talk 8 Polar, Wachusett use excess capacity to make money off other brands BY EMILY MICUCCI Worcester Business Journal Staff Writer Focus: Health care Framinghan officials and local legislators are pushing for a new downtown satellite campus for Massachusetts Bay Community College. Framingham pushing for $34-million downtown MassBay campus COMPETITOR'S PROFITS Wachusett Brewing Co. is using its 400-cans-a-minute canning line to package its own Larry Double IPA and other in-house brands, but the company is building a business model on per forming a similar task for competing microbrews, under a system known as contract brewing. BY SAM BONACCI Worcester Business Journal Digital Editor >> Continued on Page 11 Ralph Crowley Jr., CEO of Polar Beverages L ocal stakeholders are in the process of re-pitching a $34-million down- town Framingham satellite campus of Massachusetts Bay Community College to the Baker Administration after a host of community college capital projects across the state have been put on hold. The bidding process is winding down for a new campus with 50,000 to 100,000 square feet of academic space. Wellesley- based MassBay needs a new home for its satellite campus since the space it now occupies next to Fuller Middle School on Flagg Drive will be used to accommo- date the town's growing middle and high school student population starting in 2018, said Framingham Town Administrator Robert Halpin. There's been speculation that the state P H O T O / C O U R T E S Y P H O T O / E D D C O T E >> Continued on Page 10

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