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Alander Rum Punch

Farm to Bottle

How the boom in craft beverages is creating a market for locally grown barley, rye, hops and apples

By Brian Martucci
09-18-2015

More than five hours northwest of the Twin Cities, amid endless table-flat rye and canola fields, sits the aptly named Far North Spirits. Owner-operators Cheri Reese and Mike Swanson are the leading edge of a potent agricultural shift that could dramatically change the relationship between Minnesota beverage producers and their suppliers — and permanently alter consumer tastes well beyond the state’s borders.

A growing cohort of craft beer, spirits and cider producers is enthusiastically seeking out locally grown ingredients: apples for cider, rye for spirits, barley and hops for beer. Within each niche, high-end producers are willing to pay more for top-quality ingredients grown within (or just beyond) Minnesota’s borders, and are increasingly confident that their consumers will pay more to drink local.

Though it could marginally affect planting patterns in the short to medium term, it’s far from clear that it will have a decisive permanent impact on Minnesota’s crop mix. But it’s also likely that — five years hence — consumers will have far more choice in beverages made partly or wholly from locally grown ingredients. They’ll be far more vocal about demanding a local pedigree, too. It’s not a matter of whether this shift will affect Minnesota business owners involved in producing, distributing and serving craft beverages, but how much.

Apples for Hard Cider

Owner Dennis Courtier says Lake City-based Pepin Heights Orchards grows 20% to 25% of Minnesota’s apple crop. He doesn’t yet grow the small, fleshy “bitter sharp” cider apples prized by traditional cideries. Instead, he presses juice from his regular crop and sells it to local craft cidermakers, like Minneapolis’s Sociable Cider Werks.

“Juice for cider is increasingly important to our overall [6,000 gallon per day] juice business,” says Courtier, “which goes mostly to grocery stores.”

For Jim Watkins, co-owner of Sociable Cider Werks in Minneapolis, Pepin Heights’ relative heft, storage facilities and onsite pressing capabilities are key to controlling the cost of buying local. And it’s quite a cost, labor- and money-wise. Pepin Heights’ daily juice batches require about 200,000 apples or more, all of which must be hand-inspected. “That’s a lot of harvesting,” says Watkins.

But Watkins and fellow Minnesota cider-makers are willing to pay a bit extra to prop up the state’s apple industry. “We want to be the driver that makes Minnesota-grown apples available year-round, across the country,” says Watkins.

Meanwhile, Ameeta Jaiswal has ambitious plans to introduce authentic Normandy-style cider — eventually made with Minnesota-grown heirloom apple varietals — into the American craft beverage mix. She and fifth-generation Normandy apple farmer and cider expert Guillaume Vaucrecy are the brains behind Panache, a St. Paul-based upstart that began importing three varieties of French-made cider under the upscale “Billy” label this summer. The ciders are naturally fermented, gluten-free, and have no added sugar — attributes he expects will be well-received by health-conscious Americans.

Panache held tastings at the 26th Annual Polo Classic this August in Maple Plain. “By halftime, all our samples were gone,” says Jaiswal. “People really connected with the product.” Vaucrecy says that’s partially due to American consumers’ openness to cider in general.

Though Normandy “is among the world’s best cider apple growing regions,” he says, French consumers associate hard cider with the subpar, often sickeningly sweet mass-produced varieties that dominate France’s supermarkets. Vaucrecy has sampled dozens of U.S.-made ciders to glean insight into the American palette.

So whether they know it or not, Minnesotans enjoying Panache’s ciders will be indulging a centuries-old tradition. “Younger drinkers want something fun and contextual,” says Jaiswal. “We’re taking a traditional, sophisticated beverage and placing it in a cool package.”

Panache is working with the University of Minnesota to find local orchards with the space and inclination to plant Normandy-style cider apples; several have already planted trees. But since new apple trees take five to seven years to bear usable fruit, Panache needs to import for the next half-decade.

After that, says Vaucrecy, “the idea is to produce local and drink local.” He envisions the growth of a local cidermaking niche “that uses Minnesota-grown apples and traditional European techniques and technologies.”

Though it’s an ambitious goal, it’s not without precedent. “Back in the 1980s, many vintners from Burgundy [France] moved to California and Chile,” notes Jaiswal. Panache is just the latest New World outlet for European farm-to-glass craftsmanship.

Barley/Beer

Malted barley is the principal grain in most beer varieties. Brewers sometimes add lesser amounts of rye, wheat and other grains for flavor or texture.

Historically, barley has also been a principal crop for Minnesota farmers. According to Kevin Smith, barley breeding and genetics specialist at the University of Minnesota-Twin Cities’ Department of Agronomy and Plant Genetics, cultivation peaked at about 2 million acres in the 1920s and '30s. Competition from corn and soybeans, which are more predictable and better-covered by farm insurance, pushed total acreage under 1 million after World War II. Fusarium head blight, or “scab,” wreaked havoc on the local crop in the early 1990s, accelerating the trend. Ironically, corn is a key scab host: Farmers who plant barley in recently harvested cornfields invite crop failure.

Today, says Smith, Minnesota farmers plant just 100,000 barley acres in a typical year. Since barley is a short-season, somewhat drought-tolerant crop, production has shifted north and west, into North Dakota, Saskatchewan and Alberta. Local brewers fret that Minnesota’s historic barley malting sector will follow; Shakopee-based Rahr Malting is in the midst of expanding a major barley malting facility near its home office, but has also recently made substantial investments in an Alberta facility closer to barley’s current heartland.

Smith’s research could partially reverse this trend. In 2010, the U of M released Quest, a six-row malting barley varietal that has about 50% less scab toxin than other varietals. That’s still too high for malting, though judicious fungicide use and simply not following corn with barley can improve scab resistance.

Smith is also working on cold-resistant winter barley that can survive Minnesota winters. After a fall planting, the young barley goes dormant under the snow, then springs back to life as the weather warms. In southern Minnesota, the growing season may be long enough to facilitate double-cropping. After a late spring winter barley harvest, farmers plant soybeans in the same field.

“Double-cropping potentially keeps barley acreage in Minnesota without affecting farmers’ profitability,” says Smith. “There’s also an ecological case” for the practice, which improves soil health and reduces the need for fertilizer. Full scab resistance and reliable double-cropping are likely years off, though.

Casey Holley, co-founder of Able Seedhouse & Brewery in Minneapolis, wants struggling Minnesota growers to have an outlet for their barley now. “We’ve been going door to door [with local farmers] and saying, ‘If you grow it, we’ll malt and brew with it,’” he says.

Prairie Point Farm, an organic operation in Brown’s Valley, is already on board. Holley hopes to get growers’ cooperatives into the mix, extending Able’s reach among independent farmers. And he’s getting lots of interest from younger homebrewers in farming families.

“They say, ‘Dad grows all this barley, but it goes into a grain elevator’” for animal feed, says Holley. “‘Can you malt it instead?’”

Due to the vast amounts of barley necessary to produce a single batch of beer on Able’s 40-barrel fermenting system and the difficulty of securing piecemeal commitments, Able-brewed beer made only with Minnesota grains is still a long way off. Holley “would be quite happy with 5%” local malts in his early batches.

Though New Ulm-based Schell’s Brewery isn’t malting in-house, it’s no less committed to a local barley supply chain. The brewery has 40 acres under cultivation at a client farm. Head brewer Jace Marti says it yielded just 85 bushels an acre this year — not quite half a batch at Rahr Malting’s Shakopee facility. “If we can double what we’re growing now, we’ll have enough to make a special-edition beer with all-Minnesota malt,” says Marti.

The economic case for direct connections between growers, maltsters and brewers is clear-cut. According to Marv Zoots of the Minnesota Barley Growers’ Association, high-quality barley grown to malting specifications can fetch $6 per bushel, compared to $2.50 per bushel for feed-grade barley. “We’re very excited about the potential nexus between barley growers and craft brewers in Minnesota,” says Zoots, adding that the recent acreage uptick is partly due to brewing demand.

Hops/Beer

Hops, a pungent flower produced by perennial vines, is a key flavoring agent in beer. But despite Minnesota’s long, proud brewing tradition, the state’s hops industry remains in its infancy. Washington state dominates hops production: Its arid but fertile Yakima Valley produces the vast majority of commercially grown U.S. hops, with neighboring Oregon and Idaho accounting for much of the rest.

The interior Northwest’s dry, relatively long growing season is ideal for most hops varieties, and the region’s growers have happily ramped up production as the craft beer boom accelerates and the market price of hops rises.

Though production continues to increase, the Northwest’s hops industry is showing signs of strain. Since it takes several growing seasons to realize a plant’s full yield, pacing production with rapidly scaling demand is a constant struggle. Also, concentrating production in a small geographical area presents supply risks: A persistent drought or unusual cold snap in the Yakima Valley could seriously impact hops availability and prices across the country.

Mighty Axe Hops, a boutique growing operation in Ham Lake, wants Minnesota’s brewers to have a local hops alternative. Mighty Axe currently has an acre and a half planted, with plans to expand to six acres — its entire parcel — by 2018. Co-founder Eric Sannerud sells to a growing cohort of Minnesota breweries: Minneapolis-based Fulton Brewing, Minneapolis-based Fair State Brewing Cooperative and St. Paul-based Bad Weather Brewing, among others. Minneapolis’s Fair State Brewing Cooperative uses Mighty Axe for a “fresh hopped” ale, released like clockwork every harvest time — September this year.

According to Sannerud, local hops from boutique growers offer “concrete benefits for the brewer,” such as a powerful “grown local” advertising differentiator, lower environmental impact and better flavor due to more hands-on farming practices. Though Minnesota’s climate isn’t ideal for many hops varieties, Cascade and Crystal — both popular in American-made beers — tend to do well here. As with cider apples, there’s a terroir effect: Minnesota-grown Cascade hops taste different than their Washington-grown brethren. (“And better,” Sannerud brags.)

To sell quality hops for most of the year, rather than just after the early fall harvest, Mighty Axe requires expensive pelletizers and other preservation equipment. Partly for this reason, Sannerud and co-founders are in the early stages of planning a new funding round. Longer-term, Sannerud says, Minnesota would benefit from a locally based “hops hub” that serves as an aggregator, processor and distributor of locally grown hops. Such a hub, similar to the ag cooperatives scattered throughout the Midwest, would facilitate equipment and storage space sharing, and access to markets, for small-time growers.

“If we want to scale appropriately, we need to adopt successful ideas from other areas of agriculture,” like corn and soybeans, says Sannerud. “That doesn’t mean we have to compromise our core principles.”

Rye/Spirits

Back at Far North, Mike Swanson surveys his waving rye fields from just inside the front door. (Says Able’s Holley, who visited Swanson this summer: “The rye literally starts an arm’s length from the house.”)

“You can produce quite a bit of booze from a small amount of grain,” he says. Out of 1,200 acres, Swanson and Reese need barely 100 to cover their annual distilling needs. That rye goes into vodka, gin and rye whiskey, the first batch of which will be ready this winter. They sell much of their excess rye grain to other Minnesota distilleries, such as St. Paul’s 11 Wells and Isanti’s brand-new Isanti Spirits.

Rye is even hardier than barley. “Our rye remains viable at 20 below, with no snow cover,” says Swanson. “It can survive on [nutrient-poor] marginal land, doesn’t require a lot of soil inputs, and tolerates drought well.”

These characteristics make rye an ideal cover crop — good for preventing weed growth and soil erosion — for the Red River Valley’s canola farmers. But few Minnesota farmers embrace rye’s commercial potential because “there’s not much of a market for it.”

Swanson, a St. Thomas Opus College of Business grad, sees the future of rye in Far North’s “field to glass” model. “As a farmer, you’d much rather make a finished product than simply raise a commodity crop,” he says, because it’s easier to control the product’s price. And though it’s grown in pockets from the Dakotas to Maine, rye’s tenacity makes it an ideal match for northwestern Minnesota’s unforgiving climate.

Last year, Swanson won a three-year grant from the Minnesota Department of Agriculture to conduct an exhaustive rye study. He’s looking at the traditional agronomic properties (such as yield and hardiness) of various rye strains, along with flavor profiles and overall suitability in distilling. Swanson is particularly interested in applying what he learns to rye whiskey, which he anticipates will be Far North’s fastest-growing segment.

“Seed sellers can’t tell you anything about flavor, which is my principal concern,” says Swanson. “[Research into the flavor profile of rye grain and rye whiskey] either hasn’t been done, or is proprietary to macro-distillers.”

Swanson believes that — all things being equal — a whiskey distiller’s rye choice can substantially affect flavor. He’s convinced that, as with hops and apples, rye grown in Minnesota’s unique climate and soils tastes different than rye grown in, say, Pennsylvania or New York. “It may be that there are significant flavor differences, and that [geography] affects flavor substantially as well,” he says. “I’d love to put that information in front of Minnesota’s rye growing community, encourage them to produce suitable varietals, and ultimately raise the entire sector’s profile.”

With ample investment in local distilling capacity and marketing support from local and national trade groups, such as the American Distilling Institute, Swanson believes “rye whiskey could do for Minnesota what bourbon did for Kentucky” — create the perception of a world-class spirit-producing region built on Minnesota-grown rye’s unimpeachable terroir.

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