Worcester Business Journal

www.wbjournal.com November 23, 2015 • Worcester Business Journal 11 than it needed. It brought its 400-cans- a-minute line into operation in 2012, planning on canning for other brands. Wachusett brews and packages the product. From there, the contracting company handles all the marketing and distribution. Wachusett contract brews for breweries such as New Hampshire's Smuttynose Brewing Company and Long Island's Montauk Brewing Company. This additional work is a key part of Wachusett's expansion. "We sell 98 percent of our beer in New England and 80 percent in Massachusetts," LaFortune said. "We have chosen a limited market. We are not rolling the Wachusett brand out and fighting in the craft brew brands of Oregon and California." For the current fiscal year, contract brewing is trending to exceed 20 percent of Wachusett's production, with the pos- sibility of more growth in the future, LaFortune said. House Bill 187 that would open up Massachusetts to tenant brewing, bringing in federal tax breaks and allowing outside beer to be canned on the line, would only accelerate the growth of this practice in the state, he said. The bill is currently being reviewed by the state committee on Consumer Protection and Professional Licensure. Benefits all around These contracts are a win for the com- panies whose products are being made, said Jeff Weston, vice president and general manager for Nestle Waters' new Polar Strategic Ventures. With the new arrangement, Nestle is able to make use of Polar's canning and distribution expertise. "Their supply chain is so much more nimble and capable in cans, and we just don't have that expertise," Weston said. "Manufacturing of it is extremely impor- tant, but the distribution is essential." Canning is a niche both Wachusett and Polar have embraced. There are a multitude of benefits to canning, LaFortune said, and the microbrew community has recently embraced cans as a delivery vessel for high-end brews. "We never wanted to get into it in bot- tling. We only wanted to do contract work in cans," LaFortune said. "It was definitely a bit of a gamble because if cans had come and gone, I wouldn't have had a market to sell to." By focusing on cans, Wachusett was able to secure Smuttynose, which has an extensive bottling line of its own but contracts with Wachusett to avoid com- mitting to their own canning line. Finding a balance There is a balance that must be struck, Crowley said, insisting that Polar remains the company's priority even as 50 percent of its production goes towards other brands. Polar maintains distance between the brands where it counts – in the sales staff who are differentiated between Polar and other drinks produced by the company. From Weston's perspective, as long as the products are differentiated enough in type and market level, they can be used to pull customers away from other drink types, such as traditional sodas, rather than cannibalize sales. "It's another weapon in (Polar's) arse- nal… it gives them more clout and space on the shelf," Weston said. "It's making the pie bigger, and it really works as long as we are attracting new users." Frenemies This opportunity to make use of additional capacity is present for many industries, said Crowley. With many larger companies focusing on their branding and marketing of a product, rather than actual production, there is opportunity to gain business that is being moved out of house. That is how Polar has been able to acquire fran- chises for major soft drinks over the years. However, the first place to look is the competition, he said. It might not seem to make sense, but Crowley said even the most hardened competition can become frenemies if they have run out of capacity and he has an excess. "If you're sitting there and own a manufacturing facility and have excess capacity, you might want to consider people you think of as your enemy as a business opportunity rather than your enemy," Crowley said. "If you're looking to grow your business, one great source of growth would be your competitors." n Brewers, soda bottlers rake revenues by packaging for competition >> Continued from Page 1 e Worcester Business Journal wants to know and is asking you to vote on the region's best B2B companies in our first Best of Business competition. We're conducting an Online Reader's Poll where you can vote for companies in up to 40 categories. e winners will be unveiled in the January 18, 2016 issue of the Worcester Business Journal, and honored at a special networking reception in late January. Go to www.wbjournal.com/BOBawards to place your vote today! Who are the best business-to-business companies in Central Massachusetts? The ones that truly offer the best service? Sweat all the details? Have customer-focused employees who deliver outstanding products and services? WE WANT TO KNOW! Awards W o r ce s t e r B us i n e s s J o u r n a l 2016 B E S T O F B U S I N E S S W o r ce s t e r B us i n e s s J o u r n a l VOTE NOW! Presenting Sponsors Wachusett added its canning line in 2012 with the idea that other brewers like New Hampshire's Smuttynose could pay the company to can its creations as well. P H O T O / C O U R T E S Y

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