By Eric Peterson | Oct 19, 2020
Depalletizers, repalletizers, and brewing accessories
When Ska Fabricating launched, canning equipment was squarely aimed at the Coca-Colas and Anheuser-Busches of the world. Its depalletizer -- designed for smaller volumes in line with craft breweries' production -- was part of the broad industry adoption of the aluminum can instead of the glass bottle.
The product took off in a big way as a tool for upstart breweries to feed pallets of cans into their packaging lines. "It takes a full stack of empty cans -- which is 324 cases -- and it raises the cans up, rinses them out, and sends them out to the filling line," says Vincent.
CompanyWeek first interviewed Vincent in 2014, when Ska Fabricating had nine employees. As it nears a crew of 60 following six years of 25-plus percent annual growth, a question comes to mind: What propelled the company's rise?
"The explosive growth in the craft beer industry," answers Vincent, "in addition to the explosive growth of the aluminum can as the container of choice for beverages in general. We've expanded far beyond just beer. We're doing all kinds of beverages and different types of containers."
The depalletizer remains the primary product, but Ska Fabricating has significantly expanded its catalog along with its head count. In 2016, the company put out a repalletizer for can decorators who print on or sleeve blank aluminum cans to sell in smaller quantities than the six-digit minimums of the major providers. The repalletizer allows decorators to fill pallets with finished cans for shipment.
A customer asked, "Can your machine go backwards?" says Vincent of the repalletizer's genesis. "Can decorating has become a huge portion of our business, supplying can decorators with equipment. We've probably sold 20 to 25 of those machines."
Vincent says systems integration has also driven growth. "We've also expanded our offerings into doing complete line integration, so not just providing the depalletizer but actually doing all the conveyance and machinery that completes a packaging line," he explains.
The company integrates Ska Fabricating equipment with products from other manufacturers, including Wild Goose and Twin Monkeys. Vincent says integration projects now account for about half of all sales.
"With people diversifying their product lines, they can't do it all on one line -- they've got to have multiple lines within a facility to be able to be more diversified," he explains. "Right-sized equipment fits a lot better than big equipment."
He adds, "Some of the beer producers are starting to get into co-packing and doing other beverages, like seltzers, water, and other flavored drinks -- the beer propel are diversifying as well."
Ska Fabricating has likewise diversified, as more and more customers outside the brewing industry have brought manufacturing and packaging in-house. Vincent says about 25 percent of sales now go to non-beer customers, noting, "We've done yogurt containers, we've done spice jars, we've done peanut butter jars, we've done a whole gamut of different styles and types of containers."
While the 12-ounce aluminum can reigns, many customers use other sizes or materials (namely glass and plastic). "We've been doing a lot of custom projects," says Vincent. "Within reason, we can build to spec."
The company has expanded from 5,000 square feet to 20,000 since 2014, and now has in-house metal fabrication, powder coating, a machine shop for prototyping and design, and an assembly/QA line. About 40 of the company's 57 employees work in production. Lead times are typically eight to 12 weeks.
Vincent brought on Jim Mackay as CEO in 2018 to help manage the growth, and revamped the approach to manufacturing with the hiring of manufacturing guru Dan Trojan as COO in early 2020.
Trojan helped Ska Fabricating develop a better workflow by knocking down walls and establishing production "lanes," says Vincent, and now is spearheading the implementation of an MRP system. "We were doing it like grandma did."
As of 2014, the company had sold a cumulative total of 50 depalletizers. That number is now "somewhere in the 800s," says Vincent. The customer map spans 49 states and 27 countries.
"Our sales are all inbound," says Vincent. "We don't have any outbound sales. It's word of mouth and people hearing about us that has triggered all the growth and success that we've had, which is great. We aren't having to go out and knock on doors to generate sales."
While COVID-19 impacted the company, it also helped catalyze a broad brewing industry reallocation of beer from kegs to cans. Vincent forecasts about 40 percent growth in 2020 as it ships about 110 depalletizers for the year, up from 100 in 2019. "We're getting a ton of return customers that are growing and need to increase the capacity of their lines," he says.
Challenges: Struggles in the craft brewing industry. Vincent sees the current shortage of aluminum cans as "short-lived," but notes that it might have slowed some sales.
The longer-term issue is the impact of COVID-19 on small breweries, he adds. "We saw an initial drop at the start of COVID. Shortly thereafter, we saw a surge in business from people making that shift -- breweries that weren't in cans or they were just hand-canning and needed to upgrade because they saw it as their only outlet."
Opportunities: A continued boom in aluminum packaging; Vincent cites Ball's forecasts of 4 to 6 percent volume growth through 2025. That means Ska Fabricating will likewise need to continue to scale up to accommodate demand. "That's a good problem," he says. "It means a bright future for us."
Growing beyond beer is another opportunity, he adds. "I think we're going to see significantly more non-beer companies coming to us for solutions. We're still seeing growth in beer and that's still the bulk of our sales, but the increasing number of people making kombucha, coffee, seltzers, all of the functional beverages. Canning lines have gotten so much more accessible for small companies now. Before, they were all going to co-packers."
Needs: More space and capacity, says Vincent. Ska Fabricating bought land to build a new factory in 2020, but the pandemic pushed pause on those plans. With the newly streamlined facility, the company is taking a wait-and-see approach on construction as it holds onto the parcel. "We're taking a wait-and-see [approach]," says Vincent. "Space in Durango is hard to find."
Another need: "Engineers that are familiar with what we do."