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    Ölgerðin relies on cloud-based services for its new canning line

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    Ölgerðin Egill Skallagrímsson is Iceland’s biggest beverage producer and has just increased its filling capacity four times over. Krones handled factory planning and supplied a turnkey canning line – one of the first projects, for which Krones provides support during ongoing operation under a cloud-based Service Level Agreement (SLA).

    Andri Þór Guðmundsson is the CEO of one of Iceland’s oldest and biggest companies. Ölgerðin Egill Skallagrímsson was founded back in 1913, and its first product, the sweet Egils Malt extract, is still highly popular in its home market. Not even the label has changed. “The drink is inseparably linked to Iceland’s history,” says Andri with a smile. It seems that this more or less applies to the entire company. Ölgerðin’s IPO took place in May, and besides financial considerations the CEO gives this reason for it: “It has always been my opinion that a company of this size and age has such strong roots in the Icelandic community that it belongs to the public.” 

    “Ölgerðin” means “The brewery” in Icelandic, but the beverage company’s portfolio extends far beyond beer, ranging from still water, alcopops and a wide variety of soft drinks and lifestyle drinks right through to spirits. Ölgerðin not only produces numerous brands of its own like Gull, Borg, Appelsin or Brio, but also brews beers under licence and contract-fills beverages for international brand owners. In 2010, the microbrewery Borg Brew House was set up. “It was not until 1989 that beer was legalised in Iceland. Up until then, beer with an alcohol content was brewed exclusively for sale in duty-free shops. The country had a lot of catching up to do in beer culture. With the Brew House, we gave our brewmasters a playground for experimentation,” explains Andri. Further lines of business are imports and the representation of many international food and cosmetics brands. 

    Ölgerðin’s domestic business accounts for 95 per cent. But Iceland, with its 370,000 inhabitants, is a very small market. To supply it with a huge variety of goods, the company needs an ultra-flexible production operation, so there are frequent product change-overs. The 370-strong workforce keeps on creating new drinks. “That’s important to us. We pride ourselves as being pioneers, we spot trends and come out with new drinks all the time,” emphasises Andri and goes on to say that Ölgerðin aims to achieve more than five per cent every year of its revenue from new product development.

    A true high-flyer: the collagen drink

    The latest addition to the company’s portfolio is the COLLAB series, a lifestyle drink containing caffeine and top-quality collagen. It’s a quintessentially Icelandic product since the collagen is obtained from the skin of local cod. “We partnered up with a company called ‘FEEL Iceland’ in 2017, which specialises in producing collagen from this byproduct of the fishing industry. You get high-quality protein and reduce waste,” says Gunnar B. Sigurgeirsson, who as deputy CEO is responsible for commercial strategy at Ölgerðin. After two years of product development, the first COLLAB drink got off to a highly promising start with its market launch in March 2019 and has since evolved into a genuine success story, with seven million cans sold in 2021 alone. That is an impressive 19 cans per inhabitant. Ölgerðin intends to also export this creation in future. 

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    The COLLAB series is the latest highlight in Ölgerðin’s portfolio and a genuinely Icelandic product. Image credits:


    COLLAB – top-quality collagen in the beverage can

    Six grams of protein per can, plus caffeine and vitamin B; no sugar, no carbohydrates – that is COLLAB, the new lifestyle drink developed by Ölgerðin. The only calories it contains come from top-quality collagen, the most important structural protein in the human body. COLLAB is currently available in five different flavours: lime and elderflowers, mango and peach, raspberry and apricot, yuzu-lime with lemon and passion fruit, plus lime with and most recently also without caffeine.

    Observable shift on the market from PET bottles towards cans 

    The COLLAB series’ success and the plans for future exports were among the reasons prompting the capacity upsize, which has meanwhile been completed. But what finally tipped the scales was a marked increase in sales figures for 0.33-litre cans in Iceland. Ölgerðin has for some time now observed a shift in consumer preferences from large PET bottles towards single-serve units, and quite generally away from PET towards cans, says Andri, adding: “Today, we fill significantly more containers than five years ago. In 2021, we filled 49 million litres into 84 million units, mainly into 0.33-litre cans.” That is why Ölgerðin needs substantially more capacity for cans, not only for its own brands but also for those the company contract-fills for its partners. Prior to this project, two PET lines and one combined line for glass and cans have been up and running. 

    “It was never in question that we wanted a turnkey solution,” emphasises Andri, who goes on to say: “In the beverage sector, we rank among the relatively small companies and do not have the skills, experience and manpower to install such a line on our own.” And Guðni Þór Sigurjónsson, who is the director responsible for new products and quality and has co-headed the project right from the start together with technical director Margret Arndardottir, adds that this applied equally to planning: “When the project was kicked off in late 2018, we decided against doing the planning work ourselves. It has given us a sense of security to know that planning is done by experienced specialists. We talked to various vendors and in the end opted for Krones. The company served us very well and fast, the requisite specialists were available when we needed them and travelled to Iceland whenever necessary.” What’s more, Ölgerðin has been relying on Krones technology for decades now and, as Andri puts it, been won over by this supplier’s experience, service support and reliability. 

    First milestone: planning the new line

    The fact that Krones’ factory planning consultants provide advice that’s entirely independent of the group’s own machinery was not part of the initial considerations, says Andri, but has with hindsight emerged as a benefit, something that Guðni confirms: “We found very early on that the planning team adopted quite a neutral approach to our project. They were invariably focused on finding the best solution, whether that be achieved with products from Krones or another manufacturer.”

    The planning work’s lynchpin was to meet the stipulation that a single line can handle the entire intended range of different products. The limited space available on the company’s premises did not make it any easier. The new line was to fill slim, sleek and standard cans in different sizes from 0.25 to 0.5 litres and produce a huge number of packaging variants ranging from packs of four right up to 36 containers. “That was a pretty tough job. In the end, we had more than ten versions, and I believe we took a good decision,” says Andri. Ölgerðin ultimately bought a 45,000-cph canning line, which was installed in a new building specifically erected for this purpose. Moreover, the old combined line was updated with new mixers, labeller, secondary packers and a new syrup room.

    Actually, factory planning does not automatically result in a project order. But for Ölgerðin it was never in question that they would go for Krones as turnkey supplier, and so they directly placed the order for the new line. Then things really got going: The first sod for the new building was turned in April 2021, and six months later construction was completed. The canning line arrived in Reykjavík in October, commissioning started in January 2022, and acceptance-testing of the entire line was concluded in May. 

    The new canning line

    The line has been designed as a Connected Line like every new Krones line – which means it provides access to Krones’ cloud-based solutions. You will find more details on Service Level Agreement (SLA) Performance at the end of this article.
    Krones did not only supply the new 45,000-cph canning line but also updated some machines in the other line.

    Innumerable product variants on a single line 

    The new canning line has increased Ölgerðin’s total filling capacity four times over, from roughly 15,000 to 60,000 containers per hour. That enormously upsized capacity is not least due to the high product diversity, as Guðni explains: “I think it is probably very unique worldwide that so many different SKUs are produced on a single line. Since that entails many change-overs, the line rarely runs longer than two to three hours at a time, so we need the high speed.” With a wry grin, he adds: “For a German engineer, that’s most probably an efficiency nightmare.” The director spent a few years working in Heidelberg, so he knows what he’s talking about. 

    Almost all products, most particularly all soft drinks, are now handled on the new line, with the existing combined line used for minor batches. Beer can be filled on both lines. Ölgerðin will continue to fill the smaller brands on the old line, thus maximising production flexibility.

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    The new canning line fills slim, sleek and standard cans in different sizes from 0.25 to 0.5 litres. Image credits:


    I think it is probably very unique worldwide that so many different SKUs are produced on a single line. Since that entails many change-overs, the line rarely runs longer than two to three hours at a time, so we need the high speed and flexibility, plus short change-over times. Guðni Þór SigurjónssonDirector responsible for new products and quality at Ölgerðin Egill Skallagrímsson

    Guðni was particularly eager to see how the line would cope with filling the new collagen drinks: “The large amount of protein – almost six grams per can – led to a lot of foam in the old line. Fortunately, we have not seen this in the new line, which handles collagen very well. That’s also true for the CIP system: Since the collagen is obtained from fish, extra-thorough cleaning is vital at beverage change-overs. Of course, the drink does not taste of fish, but consumers that have fish allergies need to be absolutely certain that no residues whatsoever can be found in other products. All our tests show spectacular results confirming this.” 

    What’s special about the canning line is the high flexibility it provides in the dry end. Packaging variants range from 2x2- or 3x1-over-the-top-open and over-the-top-partly-closed, 10-container fridge packs and 12-container trays right through to wrap-around cartons with 24 or even 36 containers for export. The smaller multi-serve packs are handled on a multipacker from another vendor and then packed in wrap-around cartons or on trays in the Variopac packer.

    But no matter which packaging variant is processed on the line, it will definitely not contain any plastic material. “Right from the start, we’ve planned for no plastics whatsoever in the new line,” explains Gunnar. All products are packed exclusively in paperboard. The company no longer uses a plastic ring to hold six cans together in a stable pack as it constitutes a danger to many marine creatures. Nor are any packs wrapped in film. That fits in perfectly with Ölgerðin’s sustainability focus. The company has been a member of UN Global Compact since 2013 and has also set itself a clear target for limiting global warming to 1.5° under the Science Based Targets initiative.

    Digital safety rope between Neutraubling and Reykjavík

    Like all Krones lines supplied since 2020, the new canning line has been designed as a Connected Line, providing access to the Krones cloud and all its digital services. For Iceland, a remote island in the North Atlantic, this direct digital link is a significant aspect because it takes some time until technical help from Denmark, for example, arrives – which would mean long line downtimes in the event of a fault. Krones’ new digital options provided under its Service Level Agreement Performance supply the appropriate remedy. It includes not only various Digital Services  (see box for details), but also a fixed contact person in the technical consultancy team, monthly reviews of machine performance and suggestions on how to improve the production operation. “That gives us the reassurance and reliability we need. We can hook up with Krones online and join forces with them to tackle any questions arising,” emphasises Andri. Guðni also expects less downtimes because any faults can be remedied fast and production can be correspondingly optimised: “It’s really important to us that we can see at any time how the line’s performing. If there are any standstills, we can then use the data gathered to pinpoint the spots needing to be improved.” 

    Installation of the canning line was something special not only for the managers at Ölgerðin but also for Krones’ team of fitters working on site. That is because it was one of the first lines for which Smart Commissioning was used (see box). From Day One of commissioning, the machines have been connected to the Krones cloud via a VPN link, thus activating all digital services Ölgerðin will later on use under the SLA. Back home in Neutraubling, Tobias Schnell, the appointed service project manager for this site, went online every morning to see how the line in Reykjavík was performing. In close liaison with the site manager, he was able to respond directly if the software needed an update, for example. Once a week, the teams from Ölgerðin and Krones discussed the machine data and the progress of commissioning.

    Krones completed commissioning in May and left camp in Reykjavík. That was when the service level agreement was translated into everyday reality. Both parties meet up once a month, discuss the line’s data and work together to improve its operation. “All in all,” says Guðni, “we’re really very satisfied with this project. We’ve got great support from Krones. Friendships were made along the way, and I am very grateful to play a big part in this project.” CEO Andri has also taken the Krones site crew closely to his heart: “They mixed very nicely. I hope to see them again here in Iceland but then as visitors, as tourists, and not because the line needs them.”

    The Service Level Agreement gives us the reassurance and reliability we need, not least because Iceland is a remote island. We can hook up with Krones online at any time. Their staff see the same data as we do and can guide us. Andri Þór GuðmundssonCEO at Ölgerðin Egill Skallagrímsson

    Service Level Agreements – digital safety rope and performance booster

    With its Digital Services, Krones assists its customers in ensuring optimum line utilisation and minimising downtimes. The new Service Level Agreements (SLAs) are packages whose services have been optimally matched. They offer fixed, plannable costs and a fixed contact person at Krones who analyses the data recorded, interprets them and suggests possible measures. The prerequisites for an SLA are a Connected Line and the use of Krones’ own IIoT platform. Since 2020, every new line supplied by Krones has been designed as a Connected Line. The first product on the market is SLA Performance. It is aimed at achieving a systematic improvement of line productivity.

    The SLA Performance package includes:

    • Consultancy
      • Fixed contact person in the technical customer consultancy team
      • Monthly assessment (review) of line performance
      • Identifying measures for optimisation together
    • Digital services:
      • Access to Krones’ IIoT platform
      • Share2Act Connect as the central information and communication hub with all basic data of the production units (machines, lines or also entire plants)
      • Share2Act Performance: Live overview of the current machine status (line availability, production counter, efficiency, output per unit, production type, run rate, standstills including possible reasons); visualisation of the most important KPIs for the production process; identification of areas with unused potential in order to upgrade productivity levels
    • Service support agreement
    • Optional extras: further Krones Lifecycle Service modules

    Smart Commissioning: efficient, transparent ramp-up

    When installing and commissioning a Connected Line, the Krones service team uses cloud-based services and thus enjoys digital support on site from Day One. The digital service team provides remote support for the commissioning process, checks and updates the software versions of the individual line components, sees the same error messages as the colleagues on site and is able to swiftly remedy any faults together with them. Evaluation of the machine data starts with the first container. This creates transparency for customers, showing them the progress their lines make. They benefit from upgraded efficiency levels during production ramp-up.

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