Words - Frank Curtis | Photos - Matthew Curtis
Throughout a lifetime of working in the cereal seed and grain industry, one of the most consistently difficult jobs I’ve had is to convince growers and end-users of grain crops that they need to adopt new cultivars. With one or two notable exceptions, the barley varieties that farmers have been growing for the last decade or more are not designed to meet the increasingly demanding standards required by today’s markets.
The craft beer boom in the United States has placed unprecedented demands on malting barley supply, in terms of both quality and quantity. Barley varieties developed and widely used by the major domestic US brewers have a different biochemical makeup to the varieties sought by the craft industry and are not transferable. Adjunct brewing requires a different malting profile to that needed for all malt brewing. Malt imports from Europe have provided an important bridge for craft brewers during the last few years. But as the malt market grows to match brewers’ demands, it is becoming increasingly clear that larger and more affordable supplies of consistent quality malt are going to be needed.
"The craft beer boom in the United States has placed unprecedented demands on malting barley supply."
Fortunately for the industry, times are changing – after decades of indifference, it really is a delight to be involved in a new, exciting and dynamic period for grain marketing. Over the last year or so, hardly a day has gone by without a call from a seed merchant, farmer, maltster or a brewer enquiring about how they can get involved in new malting barley varieties that are adapted to the developing US craft brewing industry. It appears that, just as beer drinkers are becoming more open to trying new and challenging styles, farmers too are becoming more open minded to new opportunities: but can they - and will they - keep pace with demand?
Let’s start by having a look at a few rudimentary statistics to work out if this is achievable:
According to the Brewers Association website, craft beer accounted for 11% of the total US beer market, or 21,775,905 barrels (bbl.) in 2014. (2015 stats are not published yet). This market share was up from 8.9% in 2013.
This means each 1% of the market is approx. 1,979,628 bbl. Each bbl. contains 31 US gallons (= 26 imperial gallons or 117 litres)
I asked a couple of my friends who brew at Odell and Horse & Dragon here in Fort Collins how much malt is needed for a barrel of “average strength” craft beer – of course it varies a lot according to style and ABV, but a reasonable median figure is 40 lbs. (18kg) of malt per bbl.
Simple maths tells us that each 1% of the market occupied by craft beer uses 79.2 million pounds or 39,600 US tons = approx. 36,900 metric tonnes of malt.
Between 20% and 25% of the weight of barley “disappears” in the malting process through respiration, removal of rootlets and reduced moisture, so approx. 46,125 tonnes of barley are needed to produce the 36,900 tonnes of malt that supplies 1% of the craft beer market.
That means the US craft beer industry as a whole used over half a million tonnes of US barley in 2014 and if (or when) craft beer reaches a 20% market share, annual consumption will pass 1 million tonnes of barley. Current opinion in the industry is that this will happen by 2020.
One million tonnes of barley! Now let’s consider where all that barley might be grown – and who is going to convert it all into delicious, sweet, crunchy malt…
The average annual yield of barley a farmer can expect to achieve in the US is around 70 bushels, or 1.5 tonnes per acre (3.75 tonnes per hectare). This is a little over half of the average yield achieved in Northern Europe, so any increase in US barley production is going to need a lot more acres. In fact, allowing for crop failures (e.g. high protein, sprouted grain etc.) the extra 500,000 tonnes of malting barley needed to satisfy the craft industry will need at least an additional 400,000 acres of farmland that is currently being used to produce other crops.
According to USDA statistics, the barley production area in the US has remained relatively stable between 3.0 and 3.5 million acres for the last three years, so an additional 400,000 acres represents an increase of 12 – 13% in the area of land producing barley. Will the growers produce this much extra? Only if their customers pay them enough to do it. Here in Colorado, in only the last 12 months, we have seen barley buyers increase their offers to farmers to encourage them to grow more barley. One local company I spoke to was able to attract extra growers - but only by offering around 1.5 times the normal market price for barley.
"Hard on the heels of the booming craft beer business, is a rapidly expanding brewery supply industry."
The capacity for extra barley production is there, provided the customer makes it sufficiently attractive for the grower. If they don’t, he can make more money by growing wheat, corn, beans – or almost anything other than barley.
So, if US growers have the potential to produce the barley that the craft industry needs, does the malting industry have the capacity to convert all that barley into the high volumes of base malt, and the wide range of specialty malts that the craft brewing community desires? The short answer is: no – not yet anyway.
Over the decades of domestic lager domination, the major brewer-maltsters (AB-InBev, Miller Coors and others) have rationalised their malt production in the interest of economics. They have concentrated on a very narrow product range and have closed down uneconomic maltings over the years, to the extent that the US malting industry is now working very close to full capacity. One large maltings I visited a few months ago is working 365 days a year, simply to keep pace with existing orders, and the site manager told me this is pretty much the case for the entire industry.
Perhaps it’s not surprising then, that hard on the heels of the booming craft beer business, is a rapidly expanding brewery supply industry. Although I’m concentrating on malt supply in this article, there is also a proliferation of suppliers in other areas – bottles, cans, kegs, distribution, and specialist retailers – all cashing in on the rising market.
The increasing capacity in the malting trade appears to be following equally diverse patterns to the craft brewing industry that it ultimately supplies. Just as we have the Sierra Nevada and New Belgium sized brewers with pan-American and sometimes international distribution, we are seeing ambitious new malting companies that are gearing up to supply base malts in large quantities at competitive prices. At the other end of the scale, however, are numerous small craft malting companies, looking to supply the more unusual niche products. These specialty malts may be needed in much smaller quantities, but they sell for much higher prices.
I spoke to Debbie Kleinman, Director of the US Craft Maltsters Guild. She told me that the guild is open to maltsters with a capacity of up to 10,000 metric tonnes per annum. The guild currently has around 30 members, but a number of maltings still under construction are expected to join in the next 12 months. A couple of years ago, the Guild didn’t even exist.
One of the members, Troubadour Malt, is located in Fort Collins, Colorado and I’ve followed their development with interest from the very first ideas to the consistent delivery of product – all produced from locally grown barley. Troubadour Malt is owned by Steve Clark (the engineer and scientist who designed the plant) and Chris Schooley (the artist and craftsman who kilns and roasts the malt to a wide set of specifications). It’s perhaps a bit unfair to pigeon-hole Steve and Chris in this way as they are both involved in all aspects of the business, but there’s no doubt that their skills are complementary.
Troubadour Malt started out with a small Saladin Box malting unit with a 5 tonne capacity, constructed from cast concrete. This is accompanied by an adjacent steep tank, plus a small but powerful gas-fired furnace that drives hot air through the modified grain for kilning and roasting.
They source all of their barley within a 10 mile radius, the preferred variety being LCS Genie. Troubadour Malt contracted with local farmers to grow the grain specifically for them at a price the growers found attractive. The company I work for (LCS) supplied the seed to the farmers, and the barley is delivered to the maltings by the growers as needed by Steve and Chris.
"There has to be an economic formula that will work for every link in the chain - from barley grower to beer drinker."
The number of breweries in Fort Collins, with an estimated population of 158,500, is now around 20. Most of these have already started to use Troubadour malt in some of their brews. The quality and diversity of product is proving very popular, but by far the biggest motivation to use malt from Troubadour is the opportunity to tell customers that the barley was grown, malted and brewed all within 10 miles of where the beer is served.
Of course, sourcing malt in 50 lb. bags, delivered on pallets from the company down the road is fine for a 5 or 10 bbl. brewing system – but what about the breweries that need to order malt by the truck load? I spoke to Dale West of Proximity Malt, who is also building a facility in Colorado – and another one in Delaware. Proximity Malt is another recent start-up, but in this case on a completely different scale.
The central location of the Colorado maltings and the placement of the Delaware plant on the densely-populated U.S. eastern seaboard has been well thought out, as both locations are close to a lot of malt-hungry brewers. The projected volumes, too, are impressive, with Proximity planning to deliver around 50,000 tonnes of malt from the two plants – or 10% of the forecast increase in malt volume, starting in 2017.
Troubadour and Proximity Malt are very different companies in their outlook – and they represent the extremes of investment in a developing industry. They have something very important in common, however: their businesses are inspired and driven by the evolution of craft beer.
There is no doubt, that in order to support the necessary growth in barley production to satisfy the increasing demand for malt, farmers will expect to be paid more for their grain. But when you consider that the cost of the raw barley grain needed to produce the malt used to brew your favourite beer is just 3 cents per pint, there has to be an economic formula that will work for every link in the chain - from barley grower to beer drinker.