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The Beer Industry in Iowa

posted on April 29, 2010 at 1:29 PM

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The $101 billion dollar U.S. beer market had a more than two percent drop in overall sales in 2009.  But that same year the craft brewing industry grew by more than ten percent. 

Craft brewers are small, independent businesses that include microbreweries and brew pubs.   Nationally, the number of small, independent microbreweries and brew pubs has grown to more than 1,540. 

Some of that growth has occurred in Iowa, where more than 20 craft breweries have popped up in towns of all sizes including: Ames, Des Moines, Davenport, Amana, Northwood and Shenandoah.

The Iowa Journal visited one of the expanding breweries in the state, as well as a business that is successfully marketing those and other specialty beers at the retail level.

Beer Crazy is a retail specialty and home brew supply store located in Urbandale.  It was created by a consumer whose desire for fine, specialty beers, was not being met.

Mark Nauman, owner, Beer Crazy: It was wine, liquor, domestic beers, and then oh yeah, we've got some specialty beers.  So, I thought well let's bring them up to the front of the store.

Beer Crazy has experienced rapid growth since opening its doors a little more than two and a half years ago according to store owner Mark Nauman. 

Mark Nauman, owner, Beer Crazy: The second year we saw a 50% growth over the first and now we're moving into the third year and we're on track at about 30% growth.  Also about a month and a half ago we -- we removed a wall and took over the next space.  So, we've not quite doubled our space but almost. 

With more than 500 beers to choose from Nauman makes it easy for costumers to learn what they like by selling beer by the bottle.

Mark Nauman, owner, Beer Crazy:  If you can break it down so you're only obligated to that one bottle you're much more receptive to trying new things. 

Mark Nauman, owner, Beer Crazy: . . . a very nice beer, the Millstream Bock

The selection of imported and domestic beers includes products from several Iowa breweries such as Millstream Brewing Company. 

Millstream, located in Amana, is Iowa's oldest microbrewery, it was established in 1985.  It also has the distinction of being the first Iowa brewery to win a gold award at the prestigious, international, 2010 World Beer Cup competition.  The brewery won in the Vienna-style Lager category with their Schild Brau Amber.

Olde Main Brewing Company & Restaurant is located in downtown Ames, where Jeff "Puff" Irvin is head brewer. 

Jeff Irvin, head brewer, Olde Main Brewing Co.: Right now we're mashing in and we're taking whole kernel grain and we're crushing them up in the mill room, dropping down through this auger, and we're adding hot water. 

Olde Main has eight different styles of beer on tap and also makes their own root beer.  85 employees work in the brewery and restaurant.  The company says it has doubled beer production nearly every year since opening in 2004 and now is distributed across the state.  The brewery is outgrowing its current space.

Jeff Irvin, head brewer, Olde Main Brewing Co.: We can't expand out or grow bigger in the building that we have now.  So, our plans are to increase our production capacity by moving off site and actually building a large manufacturing production style brewery.

The brewery would like to find a suitable site in Ames for their new facility, to maintain access to one of their key ingredients – Ames water. 

Jeff Irvin, head brewer, Olde Main Brewing Co.: About 92% of beer is water and we are so lucky in Ames the water here is fantastic for brewing. 

While Irvin buys many of the ingredients from around the world, he says he does try to purchase from regional and local producers when possible.

Jeff Irvin, head brewer, Olde Main Brewing Co.: I buy honey locally for our root beer and I buy rolled oats from the good people at the oat mill in St. Ansgar.  I'm buying as much local produce as I can to try to help with that trickle down theory.

Being part of the "buy local" movement may be good for the beer... as well as part of the appeal for consumers ... according to Jill Haverkamp, the brewery's marketing and public relations manager.

Jill Haverkamp brewery marketing and PR manager, Olde Main Brewing Co.: About five years ago there was only one brewery in the state that was packaging their product.  Now there are four and there are two on the way of doing that and so that just kind of shows that people are venturing out and want to support local and want to buy local and Iowa breweries are providing that option for them now.  They see what it does for the economy especially in today's economy so when people are supporting their Iowa brewery that money is staying in the state and helping grow Iowa's economy.

A recent change in Iowa law will allow local breweries to produce more styles of beer which could increase sales.  Now Iowa breweries will be able to make higher-alcohol beers up to 12 percent; there had been a five percent cap. 

Jeff Irvin, head brewer, Olde Main Brewing Co.: There was about thirty percent of the styles out there that we were really prohibited from making.  We just wanted a level playing field.  We wanted to be able to produce those here and sell them to Iowa consumers.

The potential increase in the volume of local beer sold could generate more tax dollars for the state according to Olde Main’s president, Scott Griffen.

Scott Griffen, president, Olde Main Brewing Co.: For every barrel that we brew we have to pay the state $5.98.  Budweiser isn't paying $6.00 a barrel to brew it in Iowa because they're brewing it in -- in St. Louis. 

Tags: alcohol beer business economy entrepreneurs food industry Iowa