Lagunitas Brewing and the changing raw material supply game

tony magee barrels

Tony Magee kegstand (photo credit: Redtail Media, Jeffrey Neal)

(Petaluma, CA) – Lagunitas Brewing‘s Tony Magee has been tweeting up a storm this morning…


@lagunitasT
LagunitasT
A groundbreaking meeting@the brewery tday:10 of the best Alberta malting barley farmers here to build the first de-commodified pricing ever!


@lagunitasT
LagunitasT
Lagunitas opened the Hop farmers to direct buying (Anchor led us to it) 4 years ago & tday we’ll begin the same for malting barley as well !

 

After that tweet, I sent Magee an email to get more context on what happened four years ago. Here is the story in Magee’s words…

When the fake shortage started, one hop farmer (John Segal- His father planted the very first Cascade Hops!) was in a pub near his home in upstate NY and the brewer showed him a price list from Hop Union. The Willamette Hops that John Segal had just sold Ralph Olsen for a low contract price were listed there at $18/lb. John was furious and the next morning he called his one long-time craft brew customer- Anchor Brewing- (35 years a long-time customer! In fact, Fritz performed the eulogy at John’s father’s funeral) and spoke to Mark Carpenter there asking if there was another craft brewer that he would recommend a direct buying relationship with. Mark told him to call Lagunitas, which John did.

John is a cool renegade guy and I dug talking with him- he told me that he still had $250,000 worth of Willamette unsold and on the spot I agreed to buy them- even though I didn’t have either the money or the need- but I found the money right away because I thought that offer might never come again and I wanted to be John’s new customer right then and there. Since I didn’t have the need (it was right after we had set up all our contracts) I had the Willamette made into extract so that it would remain fresh to use for a few years.

Within the next couple of weeks we made arrangements to buy even more from him and also set up future contracts to buy even more as we worked our way out of the usurious pricing imposed on us be a couple of dealers. John Segal’s farm (+-400 acres in Grandville WA in the Yakima Valley) doesn’t grow all of the varieties that we need so I asked John if he would, as a trusted member of the growing community in Yakima, make some introductions for us, which he did. John also asked me about some other brewers who would be good for him to work with.

I suggested a few brewers names and contact info and those same brewers later formed something they called the ‘Hop Quality’ group… but they didn’t invite us! That doesn’t matter to me, what does matter is that I know and trust our relationships up there and even better; they now know and trust us. Today there are a lot of brewers swarming the farms in the valley and the doors, once closed, have swung wide open!

We will be taking the fair-trade type barley agreement (we and the farmers and Rahr Malting are calling it ChinookArch Malt, named after a good-news weather phenomenon that flows off of the Canadian Rockies to the west of the growing region) to the hop farmers as well.

More tweets followed from Magee about Barley Day…


@lagunitasT
LagunitasT
The old ways of buying won’t serve my brewery or our industry in the future, so, changing the status quo is a must…. cool, it is.


@lagunitasT
LagunitasT
BTW, Rahr Malting’s Alix Alberta people, truly great and artful maltsters, are our partner in it all too…


@lagunitasT
LagunitasT
How does this affect craft beer drinkers? It is a ‘fair-trade’ type pricing so you’ll know that your brewer cherishes the farmer and that…


@lagunitasT
LagunitasT
…the farmer is growing his barley SPECIFICALLY to become beer. When a typical farmer plans his growing regime, he often hedges his bet…


@lagunitasT
LagunitasT
…and fertilizes so that, if the barley is not malting quality, at least he has enough yield/acre to sell it as feed @ a lower price…


@lagunitasT
LagunitasT
…that means higher protein and other elements that are not best for great craft beers flavors. If we and farmers plan/price together…


@lagunitasT
LagunitasT
…from the moment of spring seeding, then the farmer makes a good and happy living and we will have the best possible malt !


@lagunitasT
LagunitasT
If the farmers aim hard to make malting barley and the it doesnt rise to the specification…


@lagunitasT
LagunitasT
Then they’re stuck selling a lower yielding crop @ the also low price o feed! Bad news 4 brewers AND 4 farmers. We’re now gonna be partners!


@lagunitasT
LagunitasT
Today will be a day among days for us. I believe we will end the day drinking contentedly with the soulful Canadian farmers… Lovin it.

 

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5 thoughts on “Lagunitas Brewing and the changing raw material supply game

  1. Great explanation of the biz; gives new meaning to Sting’s song. Do you plan rail shipments to new brewhouse?

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