Providing new ways to generate cash flow for distributors and restaurants alike, the new technology in mixed gas dispense systems can improve the pour and taste of draft beer.

Hollow fiber membrane technology is used to separate oxygen molecules from air to produce high purity nitrogen gas.

A system being inspected by a dealer technician.

Gas, carbon dioxide, soda syrups, food service equipment, and draught beer equipment distributors have one common thread: They serve the restaurant industry. When distributors combine contacts and accounts, synergistic products or services, and the ability to lead customers to improved draught quality, they will have happy hospitality providers.

What Is Mixed Gas?
Mixed gas is used in the draught beer business to describe a blend of nitrogen and CO2 gases, a method of pushing beer from the keg to the tap. This blend has been used to maintain brewery fresh quality and taste. Different gases have been traditionally used to push draught beer, including compressed air, CO2, and a mixture of the two. Neither gas is optimal and can result in changing the brewery-intended level of carbonation, and therefore taste and presentation.

Compressed air exposes the beer to oxygen, which results in oxidation and loss of CO2. The beer then goes flat and loses taste. If the beer is pushed by straight CO2, it can become over-carbonated resulting in a foamy pour and altered taste.

In years past, bar and restaurant managers have real-ized benefits of pushing draught beer with a nitrogen and CO2 mixture. The optimal blend of nitrogen and CO2 depends on the design of the draught beer system (temperature, length of beer lines, elevation change, and required gas pressure) and the carbonation level of the beer being pushed.

Nitrogenated beers, such as Guinness and Murphy, require a 75 Ni-25 CO2 blend. Beers pushed by this mixture pour well and their taste is preserved. Most non-nitrogenated beers (lagers, ales, etc.) pour well and maintain their taste with a 40 Ni-60 CO2 mixture.

Supply of Mixed Gas
Typically, mixed gas has been supplied as a blend of 75 N-25 CO2 pressurized to more than 2,000 PSIG in a high pressure cylinder. Although this is good for nitrogenated beers, domestic brands become under-carbonated and pour flat.

Membrane Technology
The primary technology for generating nitrogen from compressed air is "hollow fiber membrane technology," which has been used in industrial applications for the past 15 to 20 years. This technology has been integrated with a high precision gas blender into the Puredraft Mixed Gas Dispense System, available from Parker Hannifin, Tewks-bury, MA . The system, which is installed at the bar or restaurant, generates high purity nitrogen from compressed air, and blends the nitrogen with CO2 to provide two distinct blends for pushing draught beer.

The separation of oxygen from compressed air, a passive process, is based on different permeation rates of the gas molecules through a specifically designed polymeric membrane. The membrane used is in the form of small diameter hollow fibers. Oxygen, water, and CO2 molecules pass through the fiber while nitrogen molecules are left in the pressurized gas stream. The oxygen enriched permeate stream is vented to atmosphere at low pressure. The process occurs at normal compressed air pressures of about 100 PSIG. The pressure is constant and the process requires no moving parts.

Alternative to High Pressure Cylinders
The Puredraft system is an alternative to high pressure cylinders for mixed gas supply. It provides a 25 percent CO2 blend for nitrogenated beers as well as a 60 percent CO2 blend for domestic and imported ales and lagers. The latter blend delivers a more properly carbonated domestic draught beer than other types of gas.

Reduction of reliance on an external delivery service, improved safety, reduced floor space requirement, no downtime from cylinders runout, no required deliveries, elimination of labor to move and change cylinders, and a consistent quality of mixed gas are all benefits.

Maintenance and Service Requirements
Required maintenance for the system is to change a filter element once a year, which requires about 15 minutes of labor and an inexpensive filter element. System dealers are suggested to schedule one preventative maintenance visit per year.

This one-hour visit allows a technician to confirm the satisfactory performance of the system while checking for potential problems such as leaks in the mixed gas lines to the keg cooler. Unscheduled service calls are often traced to mixed gas leaks in fittings, regulators, and keg couplers in the keg cooler.

Distribution of the System

To meet the industry requirements for the system, a network of distributors who install, service, and maintain the system for a monthly fee has been developed. Distributors typically provide an ongoing service to restaurants and bars. For these businesses, the system represents an opportunity for incremental growth with existing customers and a way to win new customers.

The most successful businesses for distribution of the system include industrial gas companies, carbonic gas companies, soda syrup suppliers, and draught beer equipment installers. Gas companies involved in service to the restaurant industry provide products such as high-pressure cylinders of mixed gas and CO2. These companies have the required infrastructure to service the hospitality industry including trucks, drivers, and office and sales personnel.

Carbonic gas companies have many of the strengths as industrial gas companies, but with the advantage that customers are primarily in the hospitality industry.

Renting is Always an Option
Many restaurants lease or rent much of the equipment used in the facility. The system is suited for rental on a multi-year contract. Most restaurants can't afford the capital outlay required for a system. But, the monthly reductions in wasted beer and the increased revenues from improved draught quality will fund a monthly fee for the system with savings beyond the monthly fee. The typical cost of a system to the retail establishment is $3 to $5 per day.

Installation and Maintenance
Installation of the system is simple as the primary component is a 25-lb., wall mount cabinet. The nitrogen storage tank and compressor are usually placed on a floor. The installation requires two to four hours depending on the installer and site.

Maintenance requirements are an annual replacement of the compressed air filter, and by recommendation of Parker Hannifin, one preventative maintenance visit per year, which should include checking for normal operation, operating pressures, and locating and repairing any fitting leaks in the keg cooler.

Training and Support
A training and support program is in place to assist distributors interested in the program. The objective is providing the marketing and technical training required for a distributor to become the market-leading provider of the system in their region. The program is a partnership approach; if a distributor commits the required level of selling, installation and financial resource to the program, then Parker provides the necessary information for each of those facets to become a market leader.

The program includes an ongoing marketing support. The distributor is able to take advantage of experience on a national level. Benefits of the Puredraft program include leads, access to national references and national accounts, presence at national shows and assistance at regional shows, trained technical support and support from national and local sales managers. The program is designed to assist the local distributor in converting local establishments from the use of dated approaches to the new technology.

The Puredraft Mixed Gas Dispense System is a solution to the problem of pouring a draught beer, which meets expectations in terms of taste, presentation, and cost. Effective introduction into the hospitality industry presents an opportunity for distributors.

Edited from information supplied by Parker Hannifin. For more information, log on to, or contact Robert Daly at (800)343-4048.

Return on Investment

Parker proposes that prospective dealers review the Puredraft program using two common methods, the simple rate of return and the time-adjusted rate of return.

Simple Rate of Return:
The simple rate of return does not use discounted cash flows; it focuses on net income. To calculate a simple rate of return, estimated operating expenses for the program are deducted from estimated revenues to arrive at a net income. The net income is then related to the initial investment as follows: Simple Rate of return = (Incremental Revenues - Incremental Expenses)/Initial Investment.

The incremental expenses should include depreciation.

Example: A typical distributor might install 100 systems per year at a total equipment cost of $300,000. A typical monthly fee for a system is $120. Annual operating expenses including the initial installation labor and preventative maintenance would be on the order of $200 per unit. If the $300,000 investment is depreciated over seven years on a straight-line method, the annual depreciation is $42,857. The Simple Rate of Return is calculated as follows:($144,000 - ($20,000 + $42,857))/$300,000 = 27%

Time Adjusted Rate of Return:
This second, more complex approach to evaluating the program determines the discount rate that will equate the present value of the incremental investment with the net present value of the incremental income. This does not consider depreciation nor income tax effects.

Example:Consider a program with 100 units installed for a seven year period with an initial investment of $300,000 and an annual net income of $124,000 ($144,000 - $20,000). First, calculate a Time Adjusted Rate of Return Factor by dividing the initial investment by the annual cash inflow. This factor is $300,000/$124,000 = 2.42. Then, refer to a present value table with the seven-year basis to determine the Rate of Return at about 35 percent.