Is It Time for a California Malting Facility

This time of year a lot of brewers across the country are brewing ‘wet-hopped’ beers, using hops picked and used on the same day. Most brewers are using hops grown locally, mostly by home or small-plot gardens – far from the hop farming operations found in Oregon, Washington & Idaho. Done properly, this is a great opportunity for brewers to highlight the agricultural tie beer has. However, to tie a brewing operation to ‘local’ products in general can be a dicey and misleading issue.

For instance, few breweries that use local hops are also using barley grown and malted locally. There’s good reason for this, too – malting facilities are few and far between! Even in California where many tons of grain are grown, there are no malting facilities that can handle barley on a commercial scale (there is a tiny operation in the Reno area). I was reminded of this last year with Sierra Nevada released its first-ever “Estate” beer, which used hops and barley grown on SNBC property in Chico, California. While the barley was grown in Chico, it had to be shipped via rail-car to the Mid-West to be malted and kilned, then carted back for brewing purposes. To be perfectly clear, that endeavor was a labor of love. It’s clearly easier and cheaper to brew another way – but Sierra Nevada knew to do otherwise would dumb-down the meaning of “Estate”. I’m not implying the tail wagging the dog here, I don’t think SNBC came up with a name and figured out how to make it work.

We’re seeing more of this in California, too. Ruhstaller (the up-start beer makers in Sacramento) are making a harvest beer that uses hops & barley grown in-state. This is made possible by the new-found availability of California barley for sale to brewers. Still, these grains are sent across country to be malted and kilned.

With brewers large and small using California-grown barley, I am left wondering what it takes to make a viable malting & kilning facility. Is this a business that could succeed? Sadly, I think the answer is no – but I could be wrong. It all depends on the economy of scale factor, would enough brewers and distillers in California embrace such a novelty? I believe there’s a consumer market for California malt, but not if prices become out of reach.

Essentially, I don’t believe a small malting facility is a viable business. In whisky (whiskey) there is but a handful of distillers that use house-malted barley. Luckily, I’ve been to one – The Balvenie in Dufftown, Scotland (click to see photos of the distillery). This is part of The Glenfiddich operation, which is the bill-paying part of the operation, clearly. Walking through The Balvenie’s malting & kilning facility it’s clear that, even though it’s a fairly sizable building, not a lot of barley is being malted & kilned.

The up-front costs would have to be bore by a company with deep pockets. Then, to keep prices competitive, there would need to be enough California-grown barley to keep the malting facility in action year-round (malting one season a year is a pretty shitty business model). Finally, California brewers would need to ‘sign-on’ to such a project – opting to buy the  malted grains for use in their year-round operation. This won’t be a major issue, I believe, if the quality of malt is superior and priced competitively.

How It Could Work

Assuming a facility could be built, it’s unlikely that it’d be able to produce the volume to exactly match the price of larger facilities. That said, there could be savings realized in shipping costs. Not a ton, mind you, and brewers with grain silos (able to buy barley in bulk) should potentially see the greatest cost savings.

To offset added costs, a marketing focus on ‘locally grown & malted’ grains could target an audience with more disposable income – read: charge a bit more. Keep in mind, craft beer itself is a pretty small segment in the overall beer market and, according to IRI data, fetches an audience willing to pay slightly more for a superior product.

Again, I don’t see this happening anytime soon. But as California craft beer grows, as consumers focus  more on where the ingredients are grown AND processed (see: locally grown beef) there could be a market for such a confounded facility.

Until then, we’ll settle for California-grown grains sent long distances to be processed and returned to California. Ah, the price we pay for buying local.

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