How Does A-B Do It? On Organic Beer

Those
are the opening lines from the first article I wrote on
organic beer, over ten years ago. How things have changed.
“Organic beer” doesn’t sound funny at all any more, any more
than “organic carrots” or “organic coffee” does. The Amish,
well . . . we assume that hasn’t changed.

Organic beers
are taking off, one of the hottest segments of a sharply
rising organic foods category. “In 2005, organic beer sales
increased 40%,” says Susan Evans at Orlio Organic Beer
Company, a new wholly-owned subsidiary of Magic Hat Brewing,
in South Burlington, Vermont. “Organic beer was tied with
coffee for fastest-growing organic drink. You see more
organic in supermarkets, big companies have organic lines of
foods.”

The creation of
Orlio by Magic Hat is one more proof of the interest in
organic beers. If you need heavier, solid proof – maybe even
eye-opening proof – look no further than Stone Mill Pale Ale
and Wild Hop Lager. Yeah, that’s right: those would be the
new organic beers brewed by Anheuser-Busch (marketed under
the Green Valley Brewery label). Now that’s proof of market
interest.

Where’s the
interest coming from? Organic foods had a “crunchy” aura
about them for years, something you expected hippies to eat,
and they’d probably eat it raw and dirty. Organic foods were
a hairshirt you wore on the inside, something you did even
though it was unpleasant, because it was the right thing to
do.

That’s changed,
notes Morgan Wolaver, the organic-minded chief at Wolaver’s
Brewing in Middlebury, Vermont, one of the biggest and
fastest-growing organic breweries. “It’s not like back when
you did it to do it, and everything was bland and tofu. Now
it has to be good. If you’re going to spend an extra dollar,
it’s got to be good.”

Wolaver isn’t
saying that organic beer’s got to be better, just good.
That’s something Geoff DeBisschop, who brews a beer with
organic ingredients at the John Harvard’s brewpub in
Cambridge, Massachusetts, agrees on. “I hear a lot of people
saying ‘I buy organic tomatoes because they taste better,
but organic beer? That’s not going to taste good.’ It does
taste good, but it’s not going to taste better. It’s not
about that. It’s about saving the planet. Really. Living in
America, you can’t go off the grid, not realistically. But
you can make decisions that make things a little
better.”

Not everyone in
the business agrees. Jon Cadoux started Peak Brewing in
Burlington, Massachusetts, three years ago because of the
taste of organic beer. “The big reason is that it tastes
great. It’s delicious. Ten or so years ago there was a
perceived taste and quality sacrifice. But [organic
farmers] have really figured it out. It’s not a big
environmental/social consciousness thing. The organic stuff
tastes better, it’s a slight price premium but not much, and
it’s good for the environment and the farmers . . . why
wouldn’t I do it?” Cadoux brewed his first batches himself,
as a homebrewer, but Peak is brewed under contract at
Shipyard, in Portland, Maine.

Wow. That
doesn’t sound quite as crunchy. Wolaver does agree that it’s
not really about direct benefits, for healthiness of the
beer. “Is organic beer healthier for you? If you drank the
beer over the next 6O years, maybe. It is better for the
planet. Benefits in that way trickle all the way back to the
farmer. But when you’re sitting at the bar, do you really
give a shit about the farmer? It has to be a quality
beer.”

That’s an
encapsulation of the chain of thought that led to the point
where we are now, with organics suddenly attractive to a
wide spectrum of consumers. When stores first started
organic food sections, the produce was often still caked
with soil, smaller and not as ‘perfect’ in appearance as
non-organic foods. It was something you did out of duty. Now
that organic producers have become more focused on selling
the food as well as producing it, and the produce looks
great and tastes great, people are willing to listen to the
rest of the message, often with their mouths
full.

“I would say
that there is more awareness of organic products in
general,” says Holly Givens, who works with the Organic
Trade Association, based in – appropriately – Greenfield,
Massachusetts. “There’s also more understanding of how
organic products come from particular farming techniques,
and how they’re processed after that.

“Organic is
first and foremost about what happens on the farm,” Givens
explains. “The major focus is on building healthy soil in
ways that protect the environment. So they’re not using
toxic pesticides or herbicides or fertilizers. How we build
soil fertility could definitely have an effect on public
health. When people want a refreshing beverage, they’re not
thinking of soil health, but when you get down to organic,
that’s what it’s really about.”

That may sound
kind of heavy, but that’s the kind of thinking that drove
the first all-organic brewery. Pinkus Muller, of Munster,
Germany, has been all organic “since 198O”, confirms Craig
Hartinger, who works with Seattle-based Merchant du Vin, the
importer for Pinkus. “They were the first organic brewery we
know of in the modern era. Everything they brew is
organic.”

Looking at that
article from back in the mid-‘9Os again, I see that all the
American organic breweries I wrote about are no longer in
business. But Pinkus survived, chugging along with their
Pils, Munster Alt and Hefe-Weizen, still family-owned, still
organic.

Merchant du Vin
founder Charles Finkel told me how that happened in that
original piece. “The Pinkus brewery went all organic . . .
when the father suddenly found himself with three
environmentally-aware daughters. They thought that if one
organic beer was doing well, they should be able to do well
with a whole line. The ingredients are all organic, the
processing equipment is environment-friendly. The water
filtration system is incomprehensibly complex.”

That’s right,
there’s process involved, too. Organic is not just about
growing crops or raising animals without chemicals, it’s
about the processing as well. It’s like those little labels
you see on candies that tell you the candy doesn’t contain
nuts, but that it was made in facilities that process nuts.
Organic can be squeaky clean sometimes.

For example,
speaking of “squeaky” clean, Wolaver’s uses an organic
exterminator at their brewery. Breweries have a lot of grain
storage, and that’s very attractive to vermin. But, as
Wolaver says, “The brewery has to be certified organic, and
that means that the exterminator has to be certified
organic. This is part of sustainability, of social
responsibility. So when you look at it with that mindset, I
don’t want a lot of toxins around here to kill the pests. We
don’t have a lot of problems with pests, and it’s done
humanely.”

As you might
imagine, humane pest control costs more than putting down
some poison and rat-traps. Certification costs. Extra
equipment costs. Not using the usual caustic cleansers for
brewery equipment costs. Organic malt costs about 1O cents
more a pound, says Wolaver, and organic hops are two or
three times as expensive. “It’s not huge,” he says. “But
when you add it all up, it’s adding 2O% to the cost of the
whole product. The Wolaver’s sells for about a dollar more a
six than the Otter Creek. The margins are tighter than a
typical craft-brewed beer, but we’re starting to be able to
push that envelope. I feel it needs to go up a bit
more.”

As long as the
cost of organic materials remains high, that extra cost and
tighter margin will remain in place. And as long as demand
continues to grow, the cost will continue to go up. There
might not be anything available at all to the smaller
brewer.

DeBisschop
describes how hard it can be. “People think you can just go
out and grab some organic malts. Bullshit. There’s not a lot
of barley farmers that are certified organic out there, and
hops are even worse. There’s the organic certification for
the maltster, you have to have the grain certified, there’s
the GMO (genetically-modified organism) thing . . . it’s a
winnowing down, and when it’s over, your choices that are
left aren’t that much, it’s a tiny selection. Then there’s
suddenly this demand, and people can’t find it.”

“This demand”
may have come from Anheuser-Busch. The Green Valley beers
“have 1OO% organic barley malt, certified by the United
States Department of Agriculture (USDA) and the independent
organic organization Quality Assurance International (QAI),”
according to Andy Goeler, A-B’s Import, Craft, Specialty
Group vice-president. “This barley malt is supplied by
small, family-owned organic farms. Even the packaging is
made from 1OO percent recycled materials.”

Morgan Wolaver
felt the squeeze, but says it passed. “All of a sudden there
was just a tightening in the market for organic malts,” he
says, reminiscent of a Star Wars-like ‘great disturbance in
the Force’. “Then it came out that A-B was looking for
organic malt on the market, but they would have sucked up
everything. I understand that they went direct to the
farmers.”

When a big
company like Wal-Mart or Anheuser-Busch decides to jump in
the organic pool, there’s a huge ripple effect. Is it good
or bad for the organic producers who’re already in the
market, sometimes for years?

“It’s both,”
thinks Givens. “It definitely draws attention to organic
products, and makes them available to consumers that didn’t
have them before. We surveyed our members who are
manufacturers and they said it’s fairly consistent over the
past five years that one of the barriers to growth is
restricted supply of raw agricultural material. That’s
something OTA is encouraging, putting better infrastructure
and resources in place for farmers who want to expand their
organic production or get into organic production in the
first place. It’s a good option for getting really
high-quality product.”

Wolaver
understands that, but is obviously still working on
internalizing it completely. “It makes you angry, but at the
end of the day, if they grow the sector, there’s going to be
more farmers growing it, and the farmers are going to be
making more money. If everyone gets shut out, that would be
frustrating. But so far, there was a tightening, but it’s
relaxed. We haven’t seen any problem this year.”

What’s perhaps
the most interesting thing about the Anheuser-Busch beers is
that they chose to bring them out in a craft vein – a
relatively hoppy lager and a pale ale. Why not an organic
beer along the lines of Budweiser or Bud Light?

Goeler explains
the rather interesting reasoning behind that decision this
way. “Today’s adult consumers are open to, and have come to
expect, variety when selecting their beverage of choice.
Perhaps like never before, beer drinkers are also open to
trying a variety of beer flavors and styles, which speaks to
the gaining popularity of craft/micro brews and provides an
important opportunity for beer innovation. We make different
beers for different consumers and different occasions. While
the organic category is certainly an emerging market, it is
still very niche and we developed a beer that we know would
be well-received in this market.”

“Very niche” and
“well-received in this market”. Goeler proves that while
Anheuser-Busch may be more used to selling mega-amounts of
macro-brews, they are still masters at market analysis. It
just looks like organics are selling across the board. The
demand and interest is still a choice, not a pattern, and
the people who are making that choice are definitely not
your average consumer. It’s not a coincidence that the
market for organic beer looks a lot like the market for
craft beer: picky, well-informed, deliberately different,
curious, and willing to pay more for perceived
quality.

To get those
kinds of consumers, “you’ve got to go where the core
consumer is,” says Wolaver. “And you’ve got to be real all
the way through. They read labels, and they’re interested in
your company, too. ‘Here’s an organic beer,’ they’ll think.
‘It tastes good. But what’s Wolaver’s the company like?’
They really kick the tires.”

Organic
consumers that will buy organic because they believe solidly
in the “good for the planet” principles are Wolaver’s’core
consumers’, and he’s built his company’s success around
them. One of the brewers in my 199Os story that’s no longer
in business was the Riverosa Company, which made a beer
called Perry’s Majestic, and Wolaver took a hard look at how
they sold beer. “We read about Perry’s Majestic, and that
sounded more like marketing than brewing. Where were their
consumers? You could only sell so much at the local organic
co-op. That’s why we went to the metro areas, because the
core consumers were concentrated there.”

If organic
consumers are still that hard to get, do you want to bother
with organic beers? Absolutely. But don’t just add one or
two. Create a section, and make it worthwhile for that core
consumer to come to you. Jon Cadoux would love to see more
organic beers around his Peak brand. “Look,” he says,
“organic wine is now 1.5% of the wine category, and growing
like a weed. That’s a massive number. Fetzer was in really
early, and then there got to be a solid group of six or
seven wineries, and now it’s a category. When you get a
handful of people making great products, and consumers see
it and understand it, you’ve got something that can take
off.”

Who’s out there
to put in that section? Cadoux’s Peak beers include a brown
ale, an amber, and a pale ale. Wolaver’s has a brown ale,
pale ale, oatmeal stout, IPA, and a seasonal witbier.
Merchant du Vin brings in the Pinkus beers already
mentioned, and also the Samuel Smith Organic Lager and Ale.
Orlio is just getting started; they plan to have a Common
Ale out year ’round, with an IPA in the spring and summer
and a black lager in the fall and winter. Anheuser-Busch has
their two aforementioned entries.

You may also
find some much more exotic organics, like Cantillon’s
Lambic-Bio, an organic gueuze lambic, and the Sara Buckwheat
Ale, an organic beer from Belgium’s Brasserie
Silenrieux.

Finally, the
demand may be growing, but the supply is still questionable.
The major brake on organic beers in the future is going to
be the availability of organic hops. “It’s an unspoken
agreement that we’re going to have to push to get hops
growers to grow organic hops,” admits Wolaver. “That’s the
missing ingredient.”

Hops, however,
are a crop that is grown with major applications of
chemicals to fight insects, fungi and molds. So, says
Wolaver, “the push is to look at varieties that are
resistant. That’s why they’re having success in New Zealand;
it’s probably because those pests were never introduced
there. We do use some New Zealand hops.”

But Wolaver has
a secret plan that he hesitated to mention. Keep it under
your hat. “We have been approached by some fairly large hops
growers who are interested in growing organic hops, on the
west coast and the east coast. We’re working with them, but
it’s still all experimental.”

He’s optimistic
about the future of the project. “Pinkus has been doing this
for years, so you know it can be done. We have to be
involved in it. It’s like global warming: you can’t leave it
to the government, it’s too important. It takes us to keep
saying, ‘We’ll do it, we’ll pay for it’. As an individual, I
believe in it.”

But he’d still
like to make some money, if only to pay for those hop
projects. “Someone said, “Won’t it be great when the whole
craft beer industry goes organic?” Wolaver pauses, then
blurts out a hearty laugh. “Yeah, great, I just hope it goes
slowly!”

It doesn’t look
like that’s going to happen, Morgan. Better grab hold and
ride the organic beer tiger.