Strange Brew: Beer Enters The Internet of Things

February 21, 2014, 4:55 PM ET

Strange Brew: Beer Enters The Internet of Things

By Clint Boulton

A startup is looking to save restaurant staff repeated trips to the cooler to check beer quantities, which can be an especially onerous task for large establishments where it’s not uncommon to have 30 or more barrels of brew. SteadyServ Technologies LLC outfits kegs with sensors that monitor beer levels and let managers know when it’s time to tap a fresh keg.

The Indianapolis-based startup is an early mover in the so-called Internet of Things, which refers to the idea of embedding Internet-connected sensors in everyday objects.

Although still in early stages, the Internet of Things will generate more than $300 billion in revenues by 2020, according to researcher Gartner Inc. SteadyServ is looking to tap a niche of this potentially huge market — The Internet of Beer.

With roughly 200 million kegs sold in the U.S. each year, “draft beer is insanely profitable,” said CEO Steve Hershberger, who in 2009 co-founded Indianapolis’ Flat 12 Bierwerks. But figuring how much beer is left in a keg is a tedious, manual process. Typically, managers will go to the beer cooler, often located in a “beer cage” in the basement, and begin shaking kegs to estimate how much beer is left. They write down estimates, such as 30% or 40%, for each container. They tally their beer inventory and place their order via phone or with a sales person making his rounds.

To automate this process, SteadyServ created the iKeg sensor, which resides in a round metal disk that restaurant managers place at the bottom of each keg. IKeg monitors the weight of the keg to within a few pints, tracks the date and time, and sends this data wirelessly to SteadyServ’s inventory management software, hosted by Amazon.com Inc.’s Web Services.

SteadyServ pushes a summary of that information to an application on the customers’ iOS or Android mobile device or PC. The summary includes pie charts that display most popular and least popular brews, beer depletion rates over time, and other information to help customers keep tabs on their inventory. Customers can also use the app to replenish inventory from distributors who use SteadyServ.

SteadyServ is emerging from beta this month. But for about a year, Ryan Kellerman, director of beverage hospitality at A Pots & Pans Production, an Indianapolis-based restaurant management company, said SteadyServ has helped him save time and reduce over-ordering at two of the six Scotty’s Brewhouses that the company manages. He said that he previously had about $2,000 worth of excess draft beer on a weekly basis — thanks to the traditional “shake the keg” method. SteadyServ’s accuracy enables him to purchase just what he needs. “It’s helped us control our inventory levels tremendously,” Mr. Kellerman said. Eventually, he plans to add the service to the remaining four brewhouses.

Although SteadyServ is just becoming broadly available, the company is preparing to put something new on tap in a few months: integrating with point-of-sale systems. Mr. Hershberger said this service will enable SteadyServ to calculate how much customers are spending on beer, and provide customers real-time insight into whether they are under or over-ordering certain beer brands. “We’ll be able to give you all of the intelligence on, and manage, inventory across all of your distributors,” said Mr. Hershberger.

SteadyServ also automatically sends messages to social media feeds of bars and restaurants. Customers who follow those establishments on FacebookFB -1.49% and TwitterTWTR -1.25% will see status updates telling them  that they’d “better hurry in because there are only 14 pints left” of a certain draft beer, he said.

 

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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