Tapped into the industry

Random Lake beer tap handle maker to expand operations

Posted on Nov 1, 2016 :: Small Business Spotlight
Sharon Verbeten
Posted by , Insight on Business Staff Writer

A guy walks into a bar …” or so the joke goes.

Mark Steinhardt, general manager of AJS & Associates in Random Lake, tells a different bar story, one that has served his company well for three decades.

“When people walk into a bar, the first thing most people look at, if they’re a beer drinker, are the tap handles,” Steinhardt says. We firmly believe that the tap handle will sell the first beer. It (sways) the person looking to try something new and different.”

Whether or not his assumptions are true, business at AJS, which makes beer tap handles and related accessories, is going strong. The company is adding 16,500 square feet to its 26,000-square-foot building in Sheboygan County, which should be open by the end of this year, in time for the company’s 30th anniversary in 2017.

Making American products

Andy Sanfelippo founded AJS in 1987 and sold the company in 1999. Today, the company, which employs 45 to 50, is a wholly-owned subsidiary of Hankscraft, an international design, engineering and manufacturing company located in Reedsburg.

“We produce 80 to 85 percent of our products in Random Lake,” Steinhardt says. Some more labor-intensive pieces are made at Hankscraft’s plant in Suzhou City, China.

While beer tap handles — crafted of wood, plastic, metal or urethane — are a big part of the company’s business, it also makes related point-of-purchase signs, lights, chalkboards and promotional items. Large national clients include Miller-Coors, Anheuser-Busch and Oskar Blues, but Steinhardt says AJS has a “soft spot” for Wisconsin companies, including New Glarus Brewing Co., Hinterland Brewery in Green Bay and 3 Sheeps Brewing in Sheboygan.

“We were very lucky to have AJS in the state,” Grant Pauly, owner of 3 Sheeps, says. “We try to buy local as much as we can, but when one of the best tap handle companies in the country is down the road, it makes it a very easy decision.”

He agrees with Steinhardt’s assessment of tap handles.

“Having a great tap handle will pique someone’s interest. Then we have to hope that the staff will tell them about the product and they buy the beer.”

Craft brewing business booms

The craft beer industry has grown stratospherically over AJS’s three-decade history, which has increased demand for taps. According to the Brewers Association, a nonprofit trade organization representing large and small brewers, about 4,500 breweries exist in the United States. Much of the growth has been in the craft beer segment.

The association’s chief economist, Bart Wilson, was quoted in an online association article stating, “I think the evidence points to craft being a net positive for the beer industry and suggests that craft beer is likely to be the key segment going forward in keeping the U.S. beer industry in the black.”

Steinhardt optimistically agrees.

“Things were a lot different when this business was started,” he says. “Back then, large breweries were the main customers. You had a few small breweries.

“Our business model has changed. We still serve the big guys … but (there has been) an explosion in the craft beer industry.”

Now, instead of getting big orders from the big players, Steinhardt says more orders come in at any time since there are more niche players, though the average quantity per order is smaller.

Custom orders require a minimum of 100 taps; most of AJS’s business is custom orders.

“It’s not a highly automated process,” Steinhardt says. “A lot of tap handles are touched by many hands,” including designing, sanding and hand-painting.

Going green

AJS is proud to produce products in the United States. The company also embraces sustainable practices. Tap handles made from North American hardwoods use a well-managed and sustainable resource from Forest Stewardship Council-certified suppliers. Much of that wood, Steinhardt says, comes from Wisconsin whenever possible.

“It was both a conscious decision to be green and to cut down on shipping costs,” he says.

Byproducts from the company’s wood manufacturing are recycled and reused. For example, wood shaving and sawdust are used by area farmers for cattle bedding and mulch. Rejected wood items are sold for craft and school projects.

“Individuals use (our scrap wood) in their wood burning stoves and fireplaces,” Steinhardt says.

Whenever possible, water-based paints and coatings are used. “We recycle solvent from painting by distilling the waste material so it can be reused, thus reducing material that needs to be disposed of,” he adds. “Minimizing our energy consumption has always been a focus.”