Goliath Watch Out: Craft Beer & Spirits Are Big Business

Why did I huff and puff my way up three long flights of stairs on the outside of an enormous building in the middle of the industrial bleakness of the Vancouver, Washington, riverfront? It wasn’t for the admittedly great view of the scrap processing plant next door, or for the satisfying clatter of the stamp of my steel-toed boots on each and every tread.

I was up there, clinging to the side of the Great Western malting plant—no, I’ll be fine, just give me a minute to catch my breath before we go in—to see firsthand just how huge craft brewing and distilling has become these days. I blame you, and you, and myself, I guess, for making these drinks such a success. This immense plant, which is so big we had to drive around it in pickup trucks and golf carts, is now selling almost all of its output to craft brewers and distillers around the country.

Westland Distillery invited me out to Portland last summer to see their operation and taste their American single malt whiskey (thanks for the trip, folks), but they also wanted me to see Great Western. Westland considers Great Western to be their partner in innovation. I don’t generally think of “innovation” when I drive into a huge, 80-year-old facility making agricultural products, but that was before I saw this operation.

GW has a high-tech pilot malting plant just off the small front entrance hall (they don’t get a lot of visitors) where they do experimental runs of new malt ideas. Malted barley is so much more than just the pale stuff that makes up the bulk of light lagers and Scotch whisky. There are light malts, dark malts, caramel malts, acidulated malts, Munich and Vienna malts, crystal malts, black malts…This plant makes 35 different types of malt alone, and the industry is constantly developing new ideas, because that’s what craft brands thrives on.

That’s all kind of amazing, especially considering that Karl Ockert, the founding brewer at BridgePort Brewing across the river in Portland, used to come by back in the ’80s, pick up malt in a cardboard box and pay for it with a case of beer. At the time, GW was making bulk malt for bigger breweries, and Ockert was just tapping off the tiniest thread from that river. Now, this massive plant exists to serve breweries like BridgePort, and distilleries like Westland. My how things have certainly changed.

When Ockert was bartering for malt, there were about 60 breweries in America. Today, there are more than 7,000, according to the Brewers Association (BA). The growth has been downright torrid. In June of 2017, for example, just 19 months ago, there were 5,500. That’s about three new breweries opening every day since then.

Now, you could get depressed, and say that kind of growth can’t last. Of course it can’t last. It will moderate, just like it did in the mid-1990s. But it will moderate at a much higher level than it did 20 years ago. In the meantime, think about how many jobs all those breweries represent: approximately 165,000 (again, BA figures). It spreads from there, too, like ripples.

The BA estimates that there are an additional 365,000 “indirect and induced” jobs that exist because of the craft beer industry: additional wholesaler representatives, graphic designers, draft technicians, tap cleaning services, equipment producers, publicists, hop farmers, microbiologists, lawyers, and, yes, maltsters. The GW plant was actually going to close down in 2008, “but craft sales ticked up,” Scott Garden, GW’s director of research and technical services, told me.

The company also, of course, benefits from the craft distilling boom, too. There are more than 1,800 craft distillers in the U.S., according to the American Craft Spirits Association, which is up more than 15-percent from 2017.

Trying to figure out exactly how many people are employed by the craft spirits industry is a bit harder, but it’s possible to extrapolate. There are 23 jobs per American craft brewery. However,  there aren’t any craft distillers the size of a place like Boston Beer, or Sierra Nevada, so let’s say there are 15 jobs per distillery, which gives us the rough estimate of 27,000 jobs. We can double that for the number of indirect jobs created (54,000), so a total estimate is about 81,000 jobs. Craft distilling isn’t showing much sign of slowing down, either, and I imagine those stats will only grow significantly the next few years.

But wait! There’s more!

Craft cider is growing, too. While nobody I could find tracks this drinks segment nationally, I talked to Emily Ritchie, the executive director of the NorthWest Cider Association. She estimates that her group represents nearly a quarter of the total country’s cider makers and almost half of the overall craft production. Her association calculated that its members employ 2,629 jobs, which if you multiply that by four for the rest of the country is about 10,000 jobs. Her members, in 2016, had sales of $690 million, which if you double is an estimated $1.38 billion for the whole industry.

Then there’s mead, the wine-strength beverage made from honey, which has recently attracted more attention than I’ve ever seen. I’ve spent the last 30 years pooh-poohing the idea that anyone would ever want to drink it, but suddenly there is interest. I talked to a local mead maker I know, Greg Heller-Labelle, who runs the Colony Meadery in Allentown, Pennsylvania. He keeps tabs on the industry in general. It’s small, but now no longer tiny.

“In 2013, there were maybe 40 meaderies,” he said. “Now there are about 400. They’re small, between one and five employees, mostly. A lot of retirees and part-timers ran things in the past, but that’s changing. It’s a full-time business.” He estimated that there are somewhere between 1,000 and 1,500 people employed in making mead. I almost fell off my barstool when I heard that stat!

From the relatively huge business of making craft beer down through distilling, cider-making, and the still small world of mead, craft has become a real force in the American drinks business. David may not be Goliath just yet, but the battle gets closer to even every day. People want choice, local options and more flavor, and they get more of it all every day.

So excuse me, I’m going to relax with a big glass of beer from a small brewery that’s part of a huge industry.

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