#262 - Beverage Manufacturing Lessons with BevSource's Bob Williams

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1:18This was a leaker issue. I asked them for their seam check report. They showed me, and all the seams were in spec, by the way, so it kind of baffled me a little bit. Went back into the lab and I said, okay, walk me through your process on how you're doing these seam checks. And they were using kind of old school hand micrometers that weren't calibrated and whatnot. And they were getting variations in the results. And so in this particular case, it came down to the equip, right? And so I was able to show them, you know, by taking the micrometer and passing it around that, hey, we all got different answers here.

1:53And then you're, what's the correct answer? so that there was no repeatability, no reliability there. Hello, startup CPGers. I really think I have the best job in the world. I get to build community. I do my best to help early stage brands, but I wouldn't know how to do any of that if I hadn't run a brand myself. I was the CEO for a beverage brand, launching from scratch, getting into nearly 3 ,000 retail doors, and I learned so much. Along the way, I met some incredible people, and today I get to introduce you to one of them. It's Bob Williams from BevSource. I refer to Bob as the beverage oracle.

2:28He knows more about beverage manufacturing and production than anyone I've ever met. And today on the podcast, he is going to share so many of these lessons for us. Whether you're a beverage brand or a food brand or anyone else in the ecosystem, I think you're going to find these insights very valuable. And for all you beverage entrepreneurs out there, I highly recommend a call with BevSource. They are the experts on all things beverage, formulation, sourcing, packaging. They go so deep on production with in-house technical experts like Bob who are available for on-site QA, QC and operational support.

3:02And they even have their own pilot facility. You can make a few hundred samples even to test out your product and even get sales samples. I did that for my brand so that I could start selling into retail six months before I planned our first full production run. It was a huge help. Okay, I hope you love this episode. Please feel free to reach out to the team at BevSource if you want a consultation. Again, I really recommend it. Their website is BevSource.com. It's in the show notes. All right, here we go.

3:31All right, Bob, welcome to the podcast. I am so excited to have you here because your reputation precedes you, but I also know a lot about you because I got to work with you at a previous brand. And in my mind, you are always this mystical oracle that people spoke about of like, there is one guy who actually knows more about beverage production than anyone on this earth. And he is the person that you send in when you have a real problem. So I'm very excited that we get to pick apart a lot of the knowledge that you have here today so everybody can hear it, because that is my wish for everyone is for them to benefit from the experience here.

4:06So do you mind just hitting us first with a quick Bob's background? Daniel, thanks for having me. That's quite an intro. So thank you. Yeah, I have 25 plus years in the beverage industry, most of that in and around co-packing, spent a lot of time around quality and manufacturing operations, building systems, implementing quality procedures, working on lean Six Sigma projects, etc. are built out a total of, I think it's now like eight high speed cam lines. And again, seen quite a bit when it comes to quality manufacturing, some of the mistakes that can be made and what you can do to prevent them, you know, going forward.

4:48So again, happy to be here. All right. And so Bob, I imagine that a lot of people, if they're like me, they come across you because they have a problem, not right. Cause for me, like ideally, I wish I had done this. I would have recognized we're going into production. We're going to have this product that we obviously want to be extremely high quality. Let me just go and get someone really experienced to go to the production. We have this co-man. They should know how to do everything, but let me just go and get somebody really good for some insurance on that. We did not do that. Instead, I called Bob because we had a big problem.

5:20Is that how it usually goes? Yeah, typically that's how it goes. So what do you think are some of those differences? Let's say you have a co-man that is not one of these that has been around for decades and absolutely knows what they're doing. Like interesting for me, sometimes you'll meet a co-man and they actually feel a lot like a startup brand. They're like, yeah, we were doing this other thing. We realized there was an opportunity. So we created this co-man operation, or maybe we had a brand and we saw the extra capacity. So we started doing that and realized we liked it more than the brand.

5:47What are the kind of things that they often aren't as good at about manufacturing as those top best in class co-mans that have been around for a long time? Yeah, that's a great question, especially now, Now, not to pick on the breweries, but there's a lot of breweries out there with lagging or slow beer sales that they decide they want to get into the co-packing space to offset some of their costs, which is great. You know, like I said, there's some really good co-packers out there. But then the problem I see with a lot of them emerging into that new space, for example, breweries answer to the Department of Agriculture and the TTB.

6:21The moment they move outside of beer and they're making a sparkling water or an energy drink, now you got to report to the TTB, right? Or not the TTB, the FDA, okay? And that's a whole other set of regulations that they're not accustomed to, right? And, you know, you go into a typical microbrewery and you see people walking around in shorts. They might have their dog following them through the manufacturing facility. You typically can't do those things, right? Those aren't good GMP practices, and it's hard for them to get their head around. In addition to that, some of them lack the appropriate equipment.

6:58So, for example, most of them don't have high shear mixing. Most of them don't have agitation in the tank. You know, most of them don't have reverse osmosis water systems. So those are capital investments they're going to have to make in order to run products, you know, other than beer. So, Bob, let me ask you, what are those top problems that brands are running into when they reach out to the Oracle, Bob? I'd say the biggest one that I see most often are leakers. It's funny because typically I get a call and they said, hey, we have a leaking issue. And off the top of their head, they believe it's a can problem.

7:38They feel that the can integrity is compromised because when they find these cans, it's like two months later, it's sitting in a warehouse. They go over, they find a pallet, the whole pallet's wet and leaking, and they start tearing it apart, pulling out cans, and naturally it's leaking from the sidewall, right? So naturally they think it's a can issue. But a lot of times, one of the first things I'll do is ask for all the documentation. I go right to the seam check reports, and I would say 90 % of the time, based on my experience, all the seams are not in spec. So when you find that can in the warehouse, most likely it's due to secondary corrosion, and you're not looking at the primary cause or the primary leaker.

8:23And then when you go back and look at the seam checks, you can find out they're not in spec. Let's just dive into that a little bit. I want to make sure we're all on the same page for this. So Like you're saying, you discover there's a leaker. It's in the warehouse somewhere. If you didn't know all the stuff that Bob knows, you might even first wonder, is this an issue at the warehouse? Like, did they let a bunch of stuff get on it? Probably that's not what actually happened. And you're saying, so really what it often is going to be 90 % of the time is the actual seam, which is when you're putting the end onto the can and sealing that, which happens right after you fill that can.

9:00Because basically, like when you have an aluminum can, you buy the actual can, which does not have the end on it, and then it's filled. And then a machine comes down and seams basically the can end, which you can buy separately, onto the top of the can. And so that is usually the most common source when there are leaks is that it's happening because of an issue with that seaming, meaning it like wasn't configured correctly or it's not tight enough or something like that. Yeah, correct. You know, when you seam a can, the end manufacturer will give you a series of specification testing to be done to ensure that you're getting a good hermetic seal on it.

9:34So you're testing various points of that seam, whether it's the thickness, whether it's the length, the cover hook, the body hook, the countersink, etc. And they give you upper and lower spec limit to follow. And a lot of times when I go back and I look at those reports, a lot of times they're not in spec. And I can tell you, based on my own experience, I've seen some specifications out by two-tenths and leaks. So what amazes me is that when I find these reports and I see that they're out of spec, there's no immediate corrective action on it. I mean, it's okay if you find something out of spec, but normally you put the product on hold, you go back to your last good check, and then you ensure that whatever the root cause is fixed, and then you can move forward.

10:20But I've had conversations with co-packers, unfortunately, where they've said, hey, I've had somebody from my can supplier come in, the technician, and he told me that this is fine. I've had that too in the past. And I'll be the first to tell you, should that product leak, all of a sudden that technician is going to have amnesia. All right? They're not going to remember telling you that. And then your supplier is going to say, hey, you know, it's not in specification. You didn't do anything about it. It's going to leak. so unless you get it in writing from that technician you really don't have a leg to stand on and this is really like a whodunit case often because even if bob probably knows like look i know what it's the seam it's very hard to actually prove that right because like to actually prove that it was the scene you almost need to disprove everything else in a way where the co-man would be liable right like okay so was the can itself in spec right was there an issue on that or the liner the warehouse or the temperature, like the actual production as well.

11:22Was that all in spec or was there a low fill? Was there just like, did they not fill it up high enough? Or did they fill it too high? And that was a problem, right? Like all these things that you would also look at? Yeah, there's lots of things. And these are all those things, Ben, that I take into account as well. So you're constantly looking at things that can cause a potential leaker, even though I point out the same, which again, most of the time is the root cause. You want to ensure that there's nothing else that's contributing to it. So for example, we'll take a look at a formula, you know, and if there's high levels of copper or high chlorides, you know, those can be contributing factors to corrosion, high amounts of dissolved oxygen.

12:03I know the can manufacturers, you know, will only warranty it to, I believe it's 1.2 parts per million right now. So anything above, again, it's just going to exponentially help, you know, that corrode that product and form a leaker. So these are the things that we do look at to ensure that they aren't contributing factors, right? So, and then a lot of times we land on the seam checks. I will tell you this too. I did have an interesting case where a very large corporation had called me up and they were running some private label stuff. It was their own brand, their own manufacturing facility. I think reached out like on a Tuesday at 2 p.m.

12:42Said, hey, can you be out here tomorrow morning, right? So jumped on a plane. And it was out there in the morning and we got to the root cause of it before lunch. But when I had asked for, and again, this was a leaker issue, I asked them for their seam check report. They showed me, and all the seams were in spec, by the way. So it kind of baffled me a little bit. Went back into the lab and I said, okay, walk me through your process on how you're doing these seam checks. And they were using kind of old school hand micrometers that weren't calibrated and whatnot. And they were getting variations in the results.

13:16And so in this particular case, it came down to the equipment, right? And so I was able to show them, you know, by taking the micrometer and passing it around that, hey, we all got different answers here. And then you're, what's the correct answer? So there was no repeatability, no reliability there. So turn them on to the use of some equipment where it won't differentiate between users and you can get consistent results each time. And it can be calibrated daily, which, you know, was huge for their quality program and gave them some accurate results that they can rely on. Yeah. The reason it's important, there are two things going on, right?

13:53Like, one, you've got a problem with some inventory that's out there. And I think you're trying to figure out how pervasive is it? If we have leakers, how many more leakers are there likely to be? And also, what are we going to do with that inventory? And actually, can we get compensated for it if it was actually somebody's fault? then you want to figure that out because typically there'll be a couple of things here one your co-man is responsible for delivering you product that's in spat two you have a can provider and the cans are guaranteed typically you'll have like a warranty for them up to a certain amount of time but all of these things you would have to prove whose fault it is as well as like oh well what is it an ingredient supplier's fault or so you're trying to figure that stuff out but then also i mean the main point is you want to fix it so it doesn't happen again in the future because these things, just they absolutely are a nightmare for your entire supply chain, right?

14:41It impacts your, like hope, God forbid, you have to do a recall. But even before that, it's going to start impacting your relationship with the distributor and your retailers. And you might then be out of stock because you can't send them quality inventory. Yeah. And you nailed it right on the head there. It's really trying to find the root cause of that and not place blame first, but let's truly find out what the problem is so we can fix it. And then, you know, we have a certain level of confidence that it's not going to happen again moving forward. Because, again, that can snowball into greater problems, greater losses, problems with your retailers, your distributors, et cetera.

15:17So let's fix this as soon as possible, and then we'll figure out who's going to pay for it and how we're going to pay for it too. So that's a whole other conversation too, by the way, where it doesn't necessarily have to be money out of pocket. If it's co-packed or spalled, sometimes they'll offer you, we won't charge a tolling fee on your next production or something, right? So there are different ways to kind of work through it. Yeah, creative solutions. I love it. And Bob, in your experience, how often is it one smoking gun? Like, yes, this was it. The actual micrometers or whatever were out of spec versus it's not really clear one exact thing.

15:52There are 10 things, though, that need to be fixed. And if we actually just work on a litany of things that do need to be improved, then we are going to see fewer problem areas. And in some cases, it's kind of like that perfect storm, right? a series of events leads up to the problem. You know, as I mentioned earlier, too, when it comes to SIEM checks, you know, if you see they're out of spec, hey, fix it, get them in specifications. So sometimes it's not following procedures. Sometimes it's a training issue. But, you know, a lot of times with taking the time to really go through all the documents, all the records, interviewing people, you know, it really starts to tell a story, right?

16:28And it kind of takes away some of that speculation and that data ends up being the proof needed to show you that, hey, yeah, we got it, right? Yep. So, Bob, do you have any other good stories for us about stuff that you've run into? Obviously, we don't need to name any names here, but any other situations that Detective Bob came in to sleuth out? Yeah. I had one, too, where a company calls up. They had a micro issue, okay? And, you know, it was like an energy drink and had a process authority letter. needed tunnel pasteurization, 160 degrees, 10 minutes, right? And they had this micro issue. So I'm like, okay, send me all your micro data.

17:09And again, I asked for all the batching, the QA records, et cetera. So I'm going through it all and I get to the thermal process report and it just, it's handwritten in, it says 16010. And I'm like, what am I looking at here? Right? So for those of you who don't know, if you have a tunnel pasteurizer, you typically have a data logger that they put in the can, they fill it with the product, they seam it, run it through the tunnel, and you will get real-time data, you know, whether it's every 10 seconds, 30 seconds, however you have it programmed, and it will read the time and temperature so you ensure that you hit that 160 degrees for 10 minutes.

17:46So I wasn't seeing it. So we have a conference call, called these guys up. This is before I even stepped foot on site. And I'm like, where's your data logger information? They're like, oh, we don't have one. I'm like, why don't you have one? And they're like, well, we don't have a tunnel pasteurizer. And I'm like, well, I'm like, well, hold on. You know, the process authority letter specifically states you need tunnel pasteurization for 160 degrees, 10 minutes, and you don't have a tunnel pasteurizer. And they said, no, but we figure we could just take it and we can heat it up in our hot liquor tank to 160 degrees, and then we'll fill it.

18:20And that's exactly what they did. So again, for people who don't know, tunnel pasteurization will thermally process not just the liquid, but the entire package. OK, and this specific co-packer was also a brewery and breweries have a very high amount of yeast and mold in the air naturally. So basically, they packaged it with all this stuff in the air before they seamed it. And again, it grew out in the product. That is wild. And probably most people listening to this, if you're still listening to this, you probably do know what a tunnel pasteurizer is. But in case you don't, it is just something that is going to sit on the line.

18:55It's a kill step. And it basically just your can after it gets filled and seemed is going to roll through something that just heats it way up. So it's going to be a temperature of 160 degrees and it's going to take 10 minutes to pass through there. And that is typically if you're like an organic product, then you aren't using preservatives that could otherwise do that. And so that is the kill step is it's basically going through that tunnel pasteurizer to make it a safe product. And so if it doesn't do that and they don't treat the package, then you can have these kind of issues, especially if it's in that kind of a harsh environment.

19:26Yeah, absolutely. So my advice is if you're a co-packer and you definitely want to make sure if somebody comes to you and they do not use preservatives, that they have a process authority letter that you follow to a T, do not deviate from it. And then also for the brand owners, I've seen brand owners deviate from the letter as well. They tell the co-packer that, hey, I want higher CO2 in my product. But the co-packer says, I can't give it to you because based on the pressures that are going to build up, it's going to blow the tops off. So they say, OK, we'll just reduce the temperature. And the co-packer does it.

20:03And then they have a micro issue and they're scratching their heads wide. So I've definitely been in that situation as a brand, too, where we're like, no, I know if you if it's more carbonated, it tastes better. So could you please carbonate it as much as possible? And they're like, a couple of them are going to blow. I'm like, well, that's just let some of them. I want to push the edge on this one, please. Like until some of them are blowing like that's better than it not tasting as good. So it definitely is a discussion there. But isn't that interesting that the brand would not have known or just been OK with the fact that they didn't have it?

20:33Like for me, like you go and do a site visit as a brand. You're like, can you show me this? Can you explain how the process works? Where's this thing? Oh, you don't have a tunnel pasteurizer. Well, then I shouldn't even be here looking at this, first of all. But I mean, you must have some advice for brands about like, what I need to look at this stuff before I sign an agreement. Yeah, absolutely. In fact, you know, there's a lot of databases out there now and the help of AI that can help brand owners find a co-packer and they'll check off all the boxes. But there's something to be said about having somebody with the experience or industry depth of knowledge to be able to go in there and identify things for the customer.

21:15But I will tell you that if you are a customer and you're going to use a co-packing facility, I've seen brand owners sign agreements before they've even stepped foot into the co-packer, which I would advise against. If you're thinking of using a co-packer, schedule a visit with the co-packer. Have them walk you through the entire process from, hey, this is where I'm going to receive my ingredients. This is where I'm going to receive the primary, secondary packaging. Have them walk through the batching process. Have them walk through the lab. Have them show you every piece of equipment, what it tests and how they're going to test your product.

21:52Walk through the production line. Ask them, again, the process flow, what this does, how it works, its capabilities. And then even walk through the warehouse of where your product's going to be stored. Then I would also take time, sit down with the QA manager and have them walk through their food HACCP plan. Again, any SQF or other GFSI certifications they have. Also traceability recall programs. I would ask them all these things. But the reason why it's important is because it's going to generate a lot more questions for you. to ask your co-packing partner there, right? So I would definitely do that.

22:28I'll give you an example. You know, I had conversations where, yes, we have a master sanitation program. I get on site and I see slime mold hanging from, you know, conveyors or fillers. I see mold growing underneath product holding tanks. That's not a facility I'm going to recommend to anybody. I was in a facility that had an RO system, walked into the RO room, and it looked kind of dark and dingy, looked like nobody's been in there for a while. And I asked the QA person that, I said, look, when's the last time you back flushed your carbon tower? I don't know. Okay. When's the last time you changed out your carbon or steamed the carbon?

23:06Maybe three years ago. Walked over, looked at the RO system, and I'm like, when's the last time you changed out your membrane? Probably three years ago. Hey, I noticed your UV light's not working. When did that go out? Oh, I didn't know it went out. When's the last time you cleaned your buffer tank? And so at the end of the day, they probably would have been better off just running straight off city water than running it through the system they had because it wasn't doing anything for them. And in fact, it probably harbored certain micros over time. Again, that's not a facility that I want to recommend until they fix it and they show me that they've got good processes and practices in place.

23:45Yeah. And I think it just gets back to that point of, I don't know. I think you're a brand and you find there's a cool man out there that wants to work with you. And it's very exciting because often it can be hard to find somebody who's okay with your minimums and is going to take a bet on your brand and has capacity and has the stuff you need and is in the geography more or less that you're looking for. So I think people just get excited and maybe like, great, you're going to like take me to the dance. Let's go. Let me sign this thing. Not knowing that I need to go and check the reverse membrane osmosis.

24:16Like, you know, we don't know those things. And so I just I really encourage brands at the early stage, even for you'd think beverage would actually be pretty straightforward. Like you're not going to run into so many issues because it's not, I think, as complicated as certain food products that might require different kinds of equipment. But yet you still like you have a lot of these problems and people saying like, yeah, the co-man just can't make it taste the right way. Like there really can be tons of problems. And I always think it just makes sense to get somebody in there at the beginning or helping you find the co-man because they know a lot of the co-mans that can do good, consistent, high quality work.