Interview with Matthew Sebastionelli, 2016 March 11
- IntroductionPartial Transcript: Let’s start with your background; where did you grow up, who were your parents?Synopsis: Sebastionelli discusses his experience growing up in a military family, which involved frequent moves and a regimented lifestyle. This background gave Sebastionelli a sense of the importance of public service, which lead him to begin his career as a firefighter.
- Early Career - FirefightingPartial Transcript: What attracted you to firefighting?Synopsis: Sebastionelli discusses his decision to go into firefighting rather than pursuing a career in the military. The events of September 11th, 2001 inspired Sebastionelli to go into firefighting, and he discusses the trauma experienced by first responders who face losses during disasters. Following thirteen years’ experience firefighting in Washington state, Sebastionelli transferred to a fire company in Washington, DC, among the busiest companies in the country. Sebastionelli discusses a severe injury he sustained during his service, and the consequences it had for his career opportunities.
- Business PlanningPartial Transcript: I created a business plan. I actually sat down [and] took that time of injury and did a ‘what if,’ what would I want to do?Synopsis: Sebastionelli discusses the different business models he considered as he planned to get in to the craft beer industry. He ruled out initial ideas about opening a brewery, brewpub, or brew-on-premises business due to limits on capital and expertise. Learning of the compact canning lines being made to serve small craft brewers, Sebastionelli decided to begin a canning operation, and with assistance from a small business development center crafted a polished business plan and secured funding. Sebastionelli’s wife was an essential partner getting the business off the ground.
- Wild Goose CanningPartial Transcript: [They] created, you know, Wild Goose Canning… which is an OEM [original equipment manufacturer] for small-footprint canning lines.Synopsis: Sebastionelli discusses the origins of the Wild Goose Canning company of Boulder, Colorado, and the mobile canning industry that it helped spawn. The company began as a manufacturer of undersea camera components, but became increasingly involved in serving the craft brewing industry through their development of compact canning lines. Sebastionelli briefly discusses his collaboration with other early-adopters of the mobile canning business model.
- Starting Up River City CanneryPartial Transcript: Hugh Sisson at Heavy Seas…was our first partner brewery… They were large enough at the time to give us what I call ‘learning liquid.’Synopsis: Sebastionelli discusses the process of learning how to operate a mobile canning line, touching on the challenges of balancing the various factors affecting the canning process, and the special challenges associated with operation of a mobile canning unit. During this early period, Sebastionelli and his wife continued to operate their business on a part-time basis, and hired their first employee. Sebastionelli offers a summary of the chain of events that lead to the establishment of his business.
- Craft Brewing IndustryPartial Transcript: How did you get involved, start networking in the craft brewing industry?Synopsis: Sebastionelli discusses how he began learning about the craft brewing industry, and its needs vis-a-vis packaging. Conversations with local breweries operating their own packaging lines convinced him of the viability of his business model, and gave him necessary perspective on how to price his services. Sebastionelli then discusses how he began finding clients, or as her prefers, partners in the industry.
- Learning to CanPartial Transcript: What are some of the things that can go wrong when figuring out how to can?Synopsis: Sebastionelli discusses some of the challenges associated with the mobile canning business, including environmental concerns, air movement, airborne particulates, etc.; utility requirements, wiring, gas, infrastructure, etc.; product conditions; throughput timing and logistics. Sebastionelli shares some horror stories of what can go wrong in the mobile canning business, and suggests that effective cooperation between breweries and canners is essential to reduce resource waste.
- Investment in Packaging MaterialsPartial Transcript: Packaging is very capital intensive; from the equipment to the raw materials, your minimum order quantities, very select vendors...Synopsis: Sebastionelli discusses how the cost of packaging materials erects a significant barrier to brewers with limited working capital, and how he has responded to that implicit demand with innovative business practices. Sebastionelli remarks on the willingness of craft brewing businesses to cooperate amongst themselves, and how this has made him feel like an industry partner rather than merely an industry supplier.
- Mobile CanningPartial Transcript: I’d like to hear a little bit more about the canning process. Could you perhaps describe one of your canning lines and how it works?Synopsis: Sebastionelli describes his mobile canning equipment, how it is configured, and how it is operated. Sebastionelli details the technical process, and some of the reasoning behind each step. In brief, the steps are: depalletizing, sanitizing, purging; filling, and seaming. Under optimal conditions, they can fill 44 cans per minute, under difficult conditions they may average 35 cans per minute (12 oz. cans).
- Can TechnologyPartial Transcript: I understand that there have really been tremendous advancements in how good cans are, perhaps particularly for beer. What could you tell me about the actual can technology itself?Synopsis: Sebastionelli discusses the history of beer canning briefly, and details developments in the technology of beer cans. The manufacture of aluminum cans is reviewed, as is the effect of can technology on the final product in package. Sebastionelli notes that recent attention to and praise of craft beer canning in the media misses the longer history of the practice.
- Quality ControlPartial Transcript: You mentioned…some of things you do to maintain quality control over your process. Could you perhaps tell me a little bit more about that?Synopsis: Sebastionelli discusses some of the problems canners face to maintain quality control and assurance, and the methods he has developed to address them. Sebastionelli mentions foremost among these issues the presence of beer infections, for which they have developed an intensive CIP (clean in place) process, and ATP (adenosine triphosphate) swabbing regime to prevent cross-contamination between breweries. Sebastionelli further details the sampling and inventorying process by which they control for quality through the storage and distribution portions of the product lifecycle. Sebastionelli outlines his vision for River City Cannery as the equivalent of an in-house packaging department for its clients. The importance of data collection and analysis are also discussed.
- Training New OperatorsPartial Transcript: We kind of average anywhere between three hundred [thousand] to a half a million cans of individual training before we kind of turn you over as a lead operator.Synopsis: Sebastionelli discusses the process of training new canning line operators. The length of time required to hit training benchmarks has fallen from six-eight months to four-six weeks as the volume of work has increased. Sebastionelli details the data metrics collected during jobs, and the ways that information is used to inform training and operations.
- Client WorkflowsPartial Transcript: How many clients, partners do you have?Synopsis: Sebastionelli discusses his clients, their number (~54), and his working relationship with them. Sebastionelli explains that his business does not focus solely on beer, but also serves makers of other beverages, including soda, cider, wine, mead, tea, and coffee. For every ten to fifteen clients, he tries to have one dedicated canning line. River City operated three canning lines at the time of this interview, but had two more soon to come online. Build-time on the part of Wild Goose continues to cause a lag between River City’s needs for canning lines, and their availability.
- Additional Business Lines I - PackagingPartial Transcript: What about your other business lines? I understand you’re actually operating essentially three businesses here.Synopsis: Sebastionelli discusses the additional business opportunities he has seized while establishing his primary business line. The first of these additional business lines is in packaging, offering his clients low-minimum order, low cost packaging solutions. That business line, Lucky Clover Packaging, takes advantage of recent developments in digital printing of shrink sleeves to offer virtually unlimited design options. Sebastionelli discusses how the growth of each business line reinforces growth in the others.
- Additional Business Lines II - Non-Alcoholic BeveragesPartial Transcript: It’s been a huge success. 2016 will be, is kind of being categorized in the beverage industry as the ‘third wave of coffee,’ which will be cold-brewed coffee.Synopsis: Sebastionelli discusses the additional business opportunities he has seized while establishing his primary business line. The second of these additional business lines is in non-alcoholic beverages, extending his canning and packaging services to makers of artisanal teas and coffees. The growth of that market segment has created tremendous demand for packaging services, and Sebastionelli details his plans for Craft Pack, a small-scale contract production and packaging division within his company. The possibilities for canned craft cocktails are also discussed.
- EmployeesPartial Transcript: How many employees do you have?Synopsis: Sebastionelli discusses his employees, their number, origins, and contributions to his business and its culture.
- Contract Label DecorationPartial Transcript: I’m interested in the shrink-labeling. Is that a new technology, or a new technique, or has it been around a while?Synopsis: Sebastionelli discusses the chain that links branded products through manufacturers, labelers, distributors, and retailers to the end consumer. Contract label decoration is a well-established business model, and Sebastionelli describes how his business has adopted its techniques.
- Consumer CostPartial Transcript: Hopefully we can stop the trend of increasing six-pack cost at the consumer level.Synopsis: Sebastionelli briefly recounts the steady increase in consumer price point for craft beer in the years since he began in the industry. He describes his hopes to reverse the trend by making his services less expensive.
- LocationsPartial Transcript: How did you decide to set up shop in Baltimore, and also then to choose to open another office in Philly?Synopsis: Sebastionelli discusses how he located his business in the Baltimore area, and the developments that lead to the opening of an additional plant in Pennsauken, New Jersey. Considerations that went into the decision included commute time, service region, and brewery density. Sebastionelli compares and contrasts the business he enjoys in the two different locations, and considers relative price and security of various locations.
- Craft BrewingPartial Transcript: What is craft brewing? ... Craft brewing is risk.Synopsis: Sebastionelli discusses the definition of craft brewing, emphasizing the risks involved. Sebastionelli suggests that an appetite for risk in a variety of aspects of the business under-girds the craft brewing industry, and motivates its participants. Patterns of investment in the industry may be disconnected from its operational reality.
- Craft Brewing BubblePartial Transcript: Bubbles, to me, obviously burst. I don’t think there will be a burst.Synopsis: Sebastionelli discusses possible developments in the craft brewing industry, ruling out continued double-digit growth, as well as industry collapse. He suggests that there will be an industry re-set, but when or how is difficult to determine. The seriousness, determination of the individual brewery owner may determine the longevity of a given enterprise.
- DiversificationPartial Transcript: Is getting into non-alcoholic beverage lines in part hedging your bets against the ups and downs of craft brewing in the future? … I would say it was an insulator… Any successful business should have three separate revenue streams.Synopsis: Sebastionelli discusses his reasoning for diversifying into additional business lines beyond craft brewing. He suggests that the craft brewing industry is likely to continue to do well, but that he sees under-developed markets beyond craft beer that he can move into and profit by serving.
- CompetitionPartial Transcript: With the beer industry, our biggest competition is not another mobile packager, it’s the manufacturer of our own equipment.Synopsis: Sebastionelli discusses how packaging line manufacturers represent the biggest competition to his business as they attempt to sell their wares to breweries he may be serving. The culture of independence, and the do-it-yourself spirit typical of craft brewers, represents a kind of structural challenge to his business.
- Business VisionPartial Transcript: I want to create a business that our employees can work up into being senior managers… I always want to push our business offering to where we are viewed as an off-book asset for the company, for the brewery, for the client.Synopsis: Sebastionelli briefly discusses his vision for River City Cannery as an institution with longevity and value to its employees. Sebastionelli also discusses the importance of how his clients perceive his business and their role in serving breweries.
- InnovationPartial Transcript: There’s so many unknowns left in this industry that are yet to be explored… For instance, we are the only people in the world that have canned a nitro beer without a widget.Synopsis: Sebastionelli discusses the room for innovation in the craft brewing industry. He discusses his newly-developed technique for nitrogenating beer without a can widget, and the exciting possibilities it opens.
- Facing UncertaintyPartial Transcript: Can we continue on this really great discovery and growth curve for everybody? It’s a huge unknown.Synopsis: Sebastionelli discusses what he has learned from his business experience, and offers some words of advice for those considering starting their own business.
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