Last month while attending an event at Barley’s Brewcadia, Mary MacDonald, Executive Director of the Ohio Craft Brewers Association (OCBA), asked if I would be interested in a media pass to attend the Ohio Craft Brewer’s Conference in Cincinnati. I think we can all agree it’s a rather liberal interpretation of the term “media” to include the likes of me, but in a world where Rick Perry can be Secretary of Energy I figured why not. Of course the implied criterion for being a member of the media is to report on something, so here’s an outsider’s take on the Ohio Craft Brewer’s Conference.You might be wondering if a craft brewers conference is like the ultimate beer festival or more closely akin to a meeting of the American Dental Association. The answer it turns out is somewhere in between. To a seasoned conference goer some aspects would seem pretty familiar. It was held in a large convention center with sterile, reconfigurable rooms. The coffee served at the breaks was adequate, but not exceptional. There were talks on topics like tax law, signing a lease, liquor laws, and trademarking that only someone running a brewery could truly appreciate. Of the talks I did attend some were highly informative, while others not so much. Public speaking is after all not a prerequisite to being a great brewer. My friend Mark Richards, who works at Land Grant Brewing, even went so far to say that it was good for me to see that the meeting was not all tomfoolery and throwing back high gravity beers. While he has a point, I’d be neglecting my role as a “reporter” if I didn’t note some aspects of the meeting that I did not witness at last summer’s American Conference on Neutron Scattering.
The first deviation from the typical conference routine came when I registered on Wednesday morning. I received two drink tickets that could be redeemed either for either a bloody Mary or a mimosa, and was told they expired at 10:30 am. Morning drinking is generally not encouraged at the scientific conferences I attend. Then sometime a little before lunch they set up tables in the exhibition hall and start pouring beers that members had brought to the meeting, no tickets required. While I had resisted starting the day with a bloody Mary, I couldn’t pass up the chance at a pre-lunch glass of Little Fish’s Maker of Things Flanders Red. With a rotating selection of beers from all over Ohio, I sampled several beers I had not tried before over the course of the day. Finally, the evening activities, tasting events and opportunities to visit breweries in the Queen City, were all based around beer. While that’s hardly surprising, it’s always a treat to drink great beer surrounded by the people who made it.
The talks were for the most part well attended, and I saw many a brewer jotting down notes on topics ranging from tax law to barrel aging. For my own part I learned quite a few new things and had a good time in the process. In this post, I summarize what I learned in two talks that I found particularly interesting. In part two I’ll touch on some of what I saw during the extracurricular evening activities.
Bart Watson on the State of Craft Beer in Ohio and the Nation
Dr. Bart Watson, chief economist for the Brewer’s Association, kicked the meeting off with a highly informative talk, chalk full of statistics and insight on craft beer. Aspects of Watson’s talk have been reported in stories by Rick Armon and Dan Eaton. If you are interested in more details I suggest you read their articles (Rick’s allows you to access all of the slides from Bart’s talk), but here are some of the key points I took away from the talk.
Nationally it appears we are entering a period where the total volume of craft beer produced is going to grow relatively slowly. That means some craft breweries will have to sell less beer in order for others to sell more (my words not Watson’s). The slowdown in volume does not mean that we should expect the number of breweries to level off anytime soon. Of the 4258 breweries that brewed beer in 2015, more than 70% (3097) of them brewed somewhere between 1-1000 barrels of beer. Those breweries combined brewed less beer than Sierra Nevada alone, and less that 1% of the amount brewed by Budweiser. Although the country now has more than 5000 breweries Watson suggested somewhere in the vicinity of 8,000-10,000 breweries, most of them small, should be sustainable.
Ohio’s craft breweries impact the state economy to the tune of $700 million dollars per year, and generate the equivalent of more than 4000 full time jobs. In terms of both number of breweries per capita and craft’s share of the market, Ohio is very middle of the pack compared to other states. At the end of 2016 Ohio had 194 breweries, with another 40+ in the planning stages. That seems like a lot compared to the landscape 5 years ago, but to achieve the same number of breweries per capita as Michigan, which is a reasonable point of comparison, Ohio would need to have 445 breweries.
In Ohio retail sales from the biggest craft beer companies, defined as breweries that produce more than 1 million cases (72,570 barrels) of beer per year declined by 5.6% in 2016. Most, if not all, of these companies are national breweries (think Boston Beer Company, Sierra Nevada, New Belgium, …). At the same time, medium and small breweries, mostly based in-state, have seen significant growth in Ohio: +15% for breweries producing 100,000 to 1,000,0000 cases per year, +33% for breweries producing 10,000 to 100,000 cases per year, and +49% for breweries producing <10,000 cases per year. At several points in the talk Watson stressed a shift in consumer preferences to products produced locally. This seems to already be playing out in craft beer sales in Ohio and figures to increase going forward.
In Ohio on-premises (taproom) sales of draft beer have quadrupled over the last five years, going from roughly 7000 barrels in 2010 to 31,000 barrels in 2015.
Competition from wine and spirits is a real thing. Across the time period from 2000 to 2015 the amount of ethanol consumed per capita has been nearly constant, but beer’s share of that pie has slipped from 60% to 48%. Watson stressed the need to keep reaching out to people who are not currently regular craft beer drinkers.
IPAs are still king, and show no sign of fading. Nationally sales of IPAs account for 25% of all craft beer sales, which is nearly double what it was in 2011. Over the same time period total sales of IPAs have increased 4-fold.
Ohio Maltsters Scaling Up
Matt Cunningham of Rustic Brew Farms outside of Marysville and Andrew Martahus of Haus Malts in Cleveland talked about their efforts to produce malts in Ohio. Both facilities are still relatively new to the game, each in its second year of malting operations.
The first step in establishing a malt industry in Ohio is to convince farmers to plant barley instead of corn or soybeans. In that regard, Cunningham has a leg up because he is a farmer who has gotten into the malting game (note: they also grow hops at Rustic Brew Farms), whereas Haus Malts signs contracts with farmers to grow barley for them. They both agreed that barley planted in the fall, known as winter barley, is a better fit for Ohio’s climate than barley planted in the spring. Farmers like the higher prices that barley can command when compared to the typical commodity crops like corn or soybeans. Winter barley is also beneficial in that it provides crop cover over the winter that limits erosion. Because winter barley can be harvested in late June it also provides enough time to grow a different crop on the same ground in the same year. As an added bonus barley requires less fertilizer than many other crops, because too much fertilizer leads to nitrogen levels that are undesirably high for beer production. On the downside, it’s very difficult to get crop insurance for barley, and if the crop doesn’t meet specifications there are no good secondary markets to sell the grain. Those factors make it an appealing but risky option for farmers. They estimate that statewide 1000-2000 acres of barley will be harvested in 2017. To put that in perspective, Cunningham’s farm alone is 2600 acres.
Once the barley is harvested it is analyzed to see if it hits the right numbers for a dozen or so attributes including protein levels, plumpness, and moisture content. If it passes muster it can go through the malting process that begins with steeping in water for several days, after which the barley is allowed to germinate so it can begin converting its starches to sugar. Finally, the barley is kilned to stop the germination process, remove moisture, and add color.
In its first year of operation Haus Malts produced over 60 tons of malt, and can count over 30 breweries as customers. They hope to double their output in year two. Rustic Brew Farms has been operating with a pilot malt facility that produces relatively small 1000 lb batches. The setup requires quite a bit of manual labor and limits them to production of lighter malts like pilsner and pale ale. Cunningham is in the process of installing new equipment that will allow him to produce 4000 lb batches, as well as darker malts. The new facility should be installed by late March and will allow him to up his production to 100 tons annually.
Most local brewers are supportive, some enthusiastically so, about Ohio malts. Given the numbers presented by Maltahus and Cunningham, it sounds like the quality is already comparable to the much larger established malt houses. One sticking point is the higher cost, Ohio produced malts are currently about twice as expensive as comparable malts that come large commercial maltsters. Both speakers acknowledged that it will be very difficult to match the large companies on price. In response both are interested in branching out to more specialized types of malt, including unconventional grains like oats and triticale. Haus Malts is installing a pilot smoker for producing a variety of smoked malts to test demand for the product. They also noted that because of their small size they are able to work with small craft breweries to fill custom orders, an option that is not possible when working with the big maltsters.