Thursday, May 7, 2015
YOLO COUNTY NEWS
99 CENTS

Point of Brew: Craft brewing is going global

MichaelLewisW

By
From page A6 | April 25, 2013 |

Up until very recently all brewers of whatever ilk have more or less used the same raw materials.

That is barley for making malt, malt itself and hops move in an ever-swirling global trade across the borders of countries and continents; those materials are grown and processed and brought to market by large international companies and conglomerates that are comfortable at home and abroad even though they may have an inexact idea where home is. Some large brewers own malting capacity or hop farms but that production falls far short of their total need for beer-making materials.

In some places (the USA being a good example) as a result of global warming and the development of new varieties of competing crops, other more profitable crops have now overtaken the acreage on which malting barley was once grown. For the most part these matters are of small concern although, when ravaged simultaneously by poor yields, as a result of declining acreage, drought and disease, a price bubble can appear as happened a few years ago with hops.

Brewers themselves, these days, are international companies operating on a global stage on which a perceived opportunity in one country or even another continent is an opportunity to be seized. The current deal by which Anheuser-Busch Inbev will buy for $20 billion the 50 percent of Groupo Modelo it does not now own, is a case in point.

However, for some years now, big brewers have been losing sales and market share in the USA to other alcoholic beverages; part of that loss has been to the small but growing craft beer industry.

Predictably, big brewers have responded by making craft-style beers themselves because it is no secret how that is done and it is not difficult to do. The difficulty is in persuading beer drinkers that a craft beer made by an international brewing conglomerate is authentic (whatever that means). Nevertheless craft brewers are starting to ask themselves what authentic craft brewing really means and what craft-brewed beers really are; this becomes of interest as individual craft brewing companies achieve considerable success and grow and so can no longer truly define themselves by their smallness alone.

And so the global trade in brewing raw materials (malt and hops) is potentially an embarrassment for craft brewers because, as they grow, it makes it more difficult for them to distinguish themselves from the big brewers. Also growth takes craft brewers away from the communities where they first established themselves; for example several California breweries, including Sierra Nevada, are building new production facilities in the East to accommodate demand from their markets in many states and even abroad.

Some craft companies are, in fact, becoming big brewers.

What to do? How do craft beers maintain their point of difference?

Craft brewers have traditionally stressed their localness or being the neighborhood brewery making beers just for one community. That story hardly holds water (or maybe beer) any more. And so to establish a point of difference with the big brewers, craft brewers are turning instead to local, small-scale and privately owned sources of raw materials. A good-sized hop yard next door to the Sierra Nevada brewery in Chico is an example; now, whether that company will undertake to grow all its own hops in the future I don’t know but that strategy would make a huge point of difference from the global brewers. Many smaller breweries are doing the same thing because a useful supply of hops can be grown in a small space. There are small hop yards springing up around Davis: you can recognize them because they look like a forest of telegraph poles.

It is not quite the same for barley for malting because beer-making requires up to 100 times more malt than hops.

Nevertheless, small operations for making malt are springing up here and there. Because malting demands a supply of malting-grade barley, potential maltsters must find a cooperative farmer with acreage to devote to it in a region where barley grows well. It also raises the specter of what barley variety to plant because, clearly, growing heritage barley varieties for craft brewing is so much more persuasive than growing current commercial varieties that are available anywhere. Thus, the first challenge is to find (or become) a farmer and then a suitable barley variety. Many craft maltsters are focusing on a popular heritage variety of barley called Klages, though it is not easy to get the wheels turning.

But here is a story that demonstrates the complexity and interest of the case and demonstrates the power of large corporations: a couple of weeks ago at the Craft Brewers Conference I met a former student, Ralph Judd, who is now Director of Raw Materials for Anheuser-Busch Inbev. It turns out that gigantic ABI is also a craft brewer through their ownership of Goose Island Brewery in Chicago; Ralph has been busy growing and malting Klages barley for Goose Island beers for some time.

The giant is also a craft brewer. Just goes to show that brewing is brewing. Period.

— Reach Michael Lewis at [email protected] Comment on this column at www.davisenterprise.com

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