Malt Preferences of the Craft Brewing Industry - Agricultural ...

IntroductionMalt barley is an important economic crop to agricultural producers in Wyomingand the West. Malt barley is an attractive alternative for Wyoming growers because of itscompatability with sugar beets in a crop rotation system, as well as the cash flowprovided in late August or early September (Bastian et al., 1994). Historically, thebrewing industry has been the major purchaser of this commodity. However, the growthin demand for beer has been relatively stagnant since the 1980’s. The market for maltbarley has become less profitable for producers in recent years, given the flat demand forbeer and the increased use of barley malt substitutes such as corn and rice by macrobreweries.The investigation of alternative markets for this crop is important to maltbarley producers.While the demand for beer has been relatively flat, the craft brewing industry hasenjoyed growth in market share in recent years. During the mid-1980’s approximately90% of all U.S. manufactured beer was produced by six major companies. Annualcombined production of these megabreweries exceeded 171 million gallons in 1986(Beverage Industry Supplement, 1995). Large processors are characterized by efficiency,uniformity, and mass marketing. The product they produce is rather homogeneous, anddifferentiation occurs primarily through advertising and promotion.Craft brewers hold a minute share of the market as compared to megabreweries,but their market share is growing rapidly. In 1994, craft brewing comprised 1.3 % of thebeer market. By 1995, the market share had increased to 2 %. In 1996, 108 newmicrobreweries and 209 new brewpubs began selling beer in the United States. Overall,the total number of domestic specialty brewing companies exhibited a growth rate of1