Montrose - Daily Press

MONTROSE — The advent of widespread craft beer appreciation has produced many fine flavors and refined palates. It's had a positive impact on many of Colorado's roughly 100 breweries.

"Volume is up tremendously," Chad Hatlestad of Brewers Supply Group said. "I would say the growth rate in Colorado is averaging 30 percent per year — and that's been quite consistent over the past three years."

Belgian ales, Hefeweizens, stouts, bocks and India Pale Ales are stealing some of the thunder from familiar American lagers. Sales of craft beer increased 11 percent in the past year; beer sales in general increased only 1 percent, according to Brewers Association statistics.

(Use arrows above to view more photos) Advertisement

And the sensational uprising of malted hops isn't confined to the United States alone; China's 2007 beer production is up 10 percent, according to a market report from the International Hop Growers Congress.

Along with the rejuvenation of an ancient art, the demand for ingredients is finally exceeding the supply. Factors such as poor barley harvests, stagnation of hop acreage and the incentives for farms to grow ethanol-producing corn have accelerated shortages.

Local fermentations

Brewers Supply Group supplies hops and malted barley to virtually all of Colorado's craft breweries in some aspect. It imports its hops from nine countries —including Slovenia, Czech Republic and Germany — but buys most out of the Yakima Valley in Washington.

The company is asking its clients for three- to four-year commitments so it can give farmers an idea of what the demand will be, Hatlestad said.

"What you're seeing right now is an inflated market due to massive shortages," he said.

Brewers not already contracted could pay for hops close to 400 percent the prices in 2006. A pound of the popular Cascade aroma hops was between $4 and $5 six months ago; now it's $15 or more, Hatlestad said.

"We've been saying for years it's going to happen — some people took our advice and some people did not."

He said the 2007 hops crop is an increase over 2006, but not by much. And macrobreweries such as Molson Coors Brewing Company have been "dabbling" with varieties geared toward craft consumers that require more hops and malts.  

Though the ingredients' prices have slowly increased over the past few years, the "huge increases" started in August, he said.

Jim Jeffryes brews at Kannah Creek Brewing in Grand Junction. He said his grain prices increased 40 percent and the hops price doubled.

"We're affected in a huge way — we're just a small brewery and all the big ones get first dibs on all that stuff, and if there's any left over we get that stuff," Jeffryes said.

"There may be some breweries out there that are just on the edge that won't be able to support price increases. I hope that doesn't happen because craft brewing is such a good thing."

Kannah Creek brews about 700 barrels per year; there are about 250 pints in a barrel. The price charged for a pint at his brewery will increase from $3.50 to $3.75 next week. The brewery opened in 2005 and has a significant following of loyal customers Jeffryes said.

"People kind of get into a habit and want that one beer they always get, so I think if I explain (the price increase) to them they'll understand that," he said. "You have to know your local market and you have to not price yourself out of your local market."

He said craft beer is here to stay and that people are learning to drink more responsibly, for example: drinking one or two "good beers" as opposed to "12 Old Milwaukees."

"People are looking for something better," he said. "They're getting wise to the marketing from the big three brewers — it's just sort of over-the-top — you buy and it just kind of lets you down."

Chris Fish brews at Smuggler's Brewpub in Telluride. He said the price of a pint there will have increased from $4 to $4.50 by the beginning of December.

He said he contracted hops through BSG in May for 2008 and that it has been predicted 2008's crop for 2009 will be sold out by January. Smuggler's will brew about 1,000 barrels this year and has expanded significantly since it opened in 1999.

"From what I could tell — I took over five years ago and record keeping wasn't so solid before I got here — (they) didn't even make 200 barrels (per year)," Fish said.

Kenny Martin brews at Steamworks Brewing in Durango, where prices are to have increased from $4 per pint to $4.25 per pint by the end of December. This brewery has been in business since 1996 and expanded to production in Bayfield in 2003. It will put out about 4,500 barrels this year and sells its product by the bottle as well as by the glass.

"I don't think there's any breweries that aren't affected by it (price increases)," Martin said. "Craft as a segment is definitely on the rise and I assume some bigger players are taking more of the share. We're definitely increasing sales."

Each of these brewers has sustained growth in the past few years. None expect to cut back on the special blends of hops and barley in their recipes.

Crafted with care

A craft beer's character often stands out against the mass-produced in a store's cooler as well as on one's palate. Labels have demons, monks and bike tires. Ralph Steadman's bizarre art adorns bottles from Flying Dog Brewery.

The products inside are as diverse as their labels; one may sample two IPAs of differing brands and notice distinct characteristics between them — from color to clarity to after-taste.  

Andrea Gray-Hoover is secretary for the Black Canyon Homebrewers Association in Montrose. She said American craft brewing is defined by its flavor profiles.

"The big boys want the most amount at the cheapest price and the little guys are looking for specialty hops to build a beer on," she said.

She said the craft brewers are hit hardest by the shortages because they'll often use 60 lbs. of malt per barrel versus 30 lbs. and refuse to use cheaper ingredients such as corn and beechwood.  

"But it hits them the hardest because they have to pay for this quality," she said. "But the beer geeks — we're gonna pay. We'll stop buying milk if necessary."

Hatlestad said craft brewers could be inclined to cooperate in times of trouble.

"We've helped out a lot of people and I think that people in this industry are willing to help each other out in a pinch," he said.

And despite the craft brewers' appreciation of diversity, they continue to obtain their ingredients from the same sources as the rest of the world. Few malt houses supply a massive number of brewers. Jeffryes said he knows several farmers on the Western Slope that grow barley, but that barley for brewing must meet certain stringent requirements.

"Malting barley is pretty scientific and it takes a lot of expertise to do it right and consistently," Jeffryes said.

Gray-Hoover said she sincerely wants to see the process more localized.

"To buy from a large corporation isn't the ethic of craft brewing," she said.

She said Colorado State University once had a small-scale malt house on the Western Slope that cost a whopping $6 million.

"That's why the big boys can control it," she said of the cost.

Gray-Hoover wishes to start a malt house of her own.

"I will find a way because I don't really like farmers being so separated from brewers and basically big people controlling — it's an anathema to craft brewing."

Contact Robert Allen via e-mail at roberta@montrosepress.com

Comments