When it comes to consulting, brewing raw material sourcing is high on the list of topics I want to address with my client. Be it working with an existing brewery or getting a new brewery operational.
What is more I’ve found many existing breweries, I have worked with, have been introduced to a particular supplier and then sticking with them without shopping around.
Brewing is a multi-functioning job, and with so much to take care of, some easy wins for your brewery can be overlooked. This includes the issue of brewing raw material sourcing.
Take brewing in China for example, there are new craft breweries opening up all the time. As the craft beer revolution continues to gather momentum over here, new suppliers want to get a piece of the raw material pie.
Now these often aren’t new players, they’re suppliers with a track record. Actually, they’re established raw material suppliers from overseas working with agents within China to open new routes.
Similar situations are happening elsewhere be it South America, Eastern Europe, Central Europe or the African Continent. With new suppliers comes more competition and often cheaper prices.
A brewery should be taking advantage of this increased competition for their own benefit.
More Craft Breweries = More Suppliers
When I first came to China in 2010, the choice for malt was limited. With most people use one particular German malt supplier. This was established supplier known for quality malts.
There’s no doubt, that you can make great beer with their malt. Especially if you’re making traditional German and Belgium beers. As an established player of the Chinese craft beer scene this supplier will always have customers.
However, in the last 10 years they have been many other players from Europe that have entered the Chinese malt supply market. Established well-known brands who can supply malt cheaper than this German brand.
Amongst craft brewers I know in China, few now use the original German supplier, because malt for a cheaper price, of similar quality can be purchased.
In the last few years, the number of malt suppliers has grown significantly in China. There are European suppliers from Germany, UK and Belgium who offer malt that has been processed in Europe.
Then there are Chinese suppliers that grow and malt their barley exclusively in China. These suppliers offer the cheapest prices.
Then there are suppliers that use barley grown overseas that’s then malted in China. The cost is cheaper than malt processed in Europe but more expensive than that solely grown and produced in China.
A European View
I found similar when I was brewing in Armenia last year. The brewery I worked for used suppliers that were tried and tested. They hadn’t looked at new players able to supply Central and Eastern Europe.
As an experienced brewer who was also concerned about the environment too (buying ingredient shipped a long way). I wanted to look for sources closer to Armenia that could supply raw material for the brewery potentially at cheaper costs.
Some of you might not know, but in Central and Eastern Europe there has been a boom in craft brewing. With the likes of Estonia, Romania, Bulgaria, Georgia and Poland seeing a lot of new craft breweries open.
Mad Scientist out of Hungry are worth seeking out if you’ve never heard of them.
This has led to new suppliers opening up. I found one Polish hop grower, who with this new craft beer boom, saw a chance to re-established long forgotten Polish hop varieties for a new generation of brewers.
This hop grower is even supplying his products to a new wave of US Brewers seeking different hop varieties. I reached out to them and got great service.
I highly recommend them, if you’re from the Central or Eastern Europe. Check out Polish Hops!
I just wanted to use this example; that brewers should always keep looking. As new suppliers are always popping up. I found malt suppliers out of Slovenia and Russia too when I was in Armenia.
There were of good quality and offered competitive pricing. At the same time, it allowed us to experiment with new ingredients too.
Anyway, I wanted to stress, wherever you are based, it pays to regularly review where you’re buying your raw material from as you might be leaving money or improvements on the table.
Brewing Raw Materials Sourcing – Finding the Balance
When it comes to raw materials cheaper doesn’t always mean inferior quality. With the right technical knowledge and brewing practices using your skill as a brewer, is what makes a beer sing.
Let’s review the Chinese situation, with malt we looked at earlier:
- Chinese grown and malted barley (cheapest 4 RMB per Kg for base malt)
- Imported Barley that’s malted in China (middle ground 6-7 per Kg base malt)
- Imported Malt that’s grown and malted overseas (most expensive (10-12 RMB per Kg base malt)
Which option would you go for? This is where you test, it doesn’t have to be a cut and dry decision.
If you have a pilot brewery, try out malts from different suppliers for “experimental brews” that you can still sell.
Keep the recipes pretty basic so, you can test the malts. Brew a simple pale ale to see how different ale malt perform for example. If the base malt is to your liking there is scope to try some of the specialist malts from the same supplier.
Yes, but Neil it might change the whole taste of my beer by switching brand. Well you could slowly transition from one malt to another incrementally. Start with a larger percentage of your old brand and slowly transition to the new brand over time.
I Halved My Clients Base Malt Costs
I did this for my last client. We managed to half the cost of the base malt he was using. The transition we went through meant that regular customers were none the wiser.
We went with a supplier that used imported malt processed within China. I was bought by them (as a brewing consultant), as they set up a new 20HL production brewery. The client was expanding from a 5HL brewpub.
Reducing their malt bill by 50% whilst keeping customers happy was a big win for them. They were going to be producing much greater volumes of beer on their production brewery.
If the costs of making that beer was cheaper it meant greater profits at point of sale for them.
I also transitioned my client from using hop pellets to a CO2 bittering liquid extract for all their production brewing bitterness additions.
It led to a further reduction in raw material costs, with less space taken up by stock and cheaper transport costs. Furthermore, we reduced the number of raw materials they had to carry.
I shared this information with a few of my craft beer friends in China and they also made the transition too. All thanked me for lowering their raw material costs without loss in beer quality.
Furthermore, the bittering liquid gave a smoother bitterness in the final beer and was preferred to hop pellets by the brewers who made the switch.
Literally this last week I was in Wuxi and met a brewpub owner and he just went with the malt supplier I recommended. It saved the owner money plus the supplier was closer to him too.
Brewing Raw Material Sourcing – A Conclusion
As craft breweries continue to pop up around the world. Companies spring up to supply these breweries. If you’re aware of these changes in the supply market it can work to your profit.
It makes sense to regularly asses your suppliers. If you find a company that looks promising then small scale testing can be done to asses if the quality is good enough for you to maintain your product or even improve it.
If it is, then a slow transition can be carried out to keep your beer consistent and your customers happy. It might seem like a lot of work but, if you could half your raw material costs then why wouldn’t you?
If you would like help with sourcing new suppliers then please get in touch. I have helped a number of brewers save a lot of money with their brewing raw material sourcing.
I’ve had the time as a brewing consultant, to seek out new and credible suppliers and have done the testing so you don’t have too.
Get in touch today and see if I can save you money going forward for your raw material costs.
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