Norland International made the decision to get into the beer-making equipment business a little over two years ago -- and it's a decision that has paid off big time.
The Lincoln company that built its reputation on bottled water is getting ready for a big expansion thanks to growth in the craft brewing industry.
Norland plans to break ground in a few weeks on a more than $2 million expansion that will add 27,500 square feet of manufacturing capacity to its plant at 2001 S.W. Sixth St.
"We've just outgrown our current facility," said Mike McFarland, the company's president and one of its founders. Norland moved to its current location in 2004.
McFarland said to-date sales in the company's current fiscal year, which ends June 30, are up 60 percent, and it has grown its workforce from 48 to 80 in the past year.
Some of the growth has been in Norland's home and business water delivery service, but most of it has been in its American Beer Equipment division, McFarland said.
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You don't have to look far to see why. Three new craft breweries have opened in the past four years in Lincoln, and two of them have already announced expansions.
Lincoln's oldest and largest craft brewery, Empryean, also is in the midst of an expansion that's expected to eventually triple its workforce.
Overall beer volume sales grew only 0.5 percent in the U.S. last year, but craft beer sales were up 17.6 percent.
Bruce Kucera, vice president of American Beer Equipment, said he went to a conference in Portland, Oregon, recently attended by more than 11,000 people representing hundreds of craft breweries, "and all of them are looking to grow."
When Norland decided to get into the beer equipment business a couple of years ago after a fortuitous meeting with its neighbor, Blue Blood Brewing Co., the company invested heavily in the endeavor because it knew there was a lot of growth potential, McFarland said.
"We weren't sure how much growth, but we knew it was going to be rapid," he said.
Brian Podwinski, president and co-founder of Blue Blood, said the craft brewing industry has grown so fast that the mostly small companies making equipment haven't been able to keep up, which has led to "horrible" customer service.
Norland has been successful in large part because it provides great customer service, he said.
"These guys have been phenomenal," Podwinski said. "We buy all our equipment from them."
He said that whenever he needs something or has a problem, Norland takes care of it quickly.
While he conceded that's easy to do when you are less than a block away, "I know that's how they treat their other customers, too."
Podwinski, whose wife works for American Beer Equipment, said that the company's relative lack of experience in the industry was no issue because its more than 20 years making water bottling equipment gave it the necessary experience to jump into producing beer-making equipment.
"There are so many similarities ...," McFarland said. "It was a natural line extension for what we already do."
Norland manufactures entire water treatment and bottling systems for companies and does almost the same thing for brewers.
It focuses on bottled water, for beer it's cans.
The expansion will allow Norland to move its beer equipment manufacturing, including the fast-growing canning segment, into one building.
Right now, the water equipment and beer equipment lines are packed into the one manufacturing building, with some manufacturing done in one of three warehouses the company rents offsite.
McFarland said he's planning for the expansion to last the company for many years but would be OK if the need arises to expand sooner.
The company expects to ship 150 full brewhouse systems this year and that number could easily grow in the future.
The company is testing a couple of products that would allow it to serve larger breweries, McFarland said, and after initially focusing most of its sales efforts on the U.S., the company is putting more effort into global sales.
American Beer Equipment has already done deals with breweries in Bolivia, Panama and New Zealand and just recently signed deals with distributors in Australia and the United Kingdom.
Kucera, the company's vice president, sees that as a huge opportunity.
"Craft beer is starting to mature here, but overseas it's barely beginning to grow," he said.