In a deal on March 4, the local startup malting company Independent Barley & Malt agreed on an exclusive source for its barley as it starts production of malted barley, which is the main ingredient in brewing craft beer.
The Andersons, a diversified company with specialties in transporting and growing commodities such as corn and barley among other things, has agreed to be the sole supplier of barley to IB&M’s new malting facility in Litchfield, Michigan, as IB&M begins to start malting grain. The move cements IB&M’s supply chain in an area where local barley is hard to come by.
“It’s been over forty years since the last large malt plant closed in Michigan. Michigan farmers basically stopped growing malting barley. Today, Michigan’s malt industry is virtually non-existent, forcing craft brewers to import over $100 million per year from out-of-state or foreign suppliers,” IB&M board chair Hal Reid said in a statement.
Because of this, The Andersons will fill a crucial gap in the barley supply chain. The open-ended contract not only secures raw material for the firm, but helps establish barley cultivation nearby the plant in Litchfield and allows for the possibility of completely local craft beer in Michigan.
Craft beer contains 3.4 times the volume of malted barley than beers produced by major commercial brewers according to IB&M, and the emphasis on malted barley brings with it advantages to having more control over a crucial input for craft brewers.
“The Andersons has already begun working with farmers in Michigan to begin preparing a supply of Michigan-grown grain while they prepare to procure and store grain from out-of-state sources,” Director of Corporate Affairs for IB&M Mark Schauer said in an email.
Such agricultural development within the state is of particular interest to Hillsdale county officials. Litchfield City Manager Douglas Terry sees such diversification as a crucial component for sustained growth in the state and county.
“Michigan is an agricultural state with an abundance of rich soils,” he said. “We see the possibility of food processing as a great way to diversify the economy and strengthen employment growth in the area.”
Coupled with the revamp of barley production, IB&M’s repurposing of the old power plant in Litchfield provides numerous economic benefits to the county and state, according to Terry. As of now, an economic incentive package is in the works from the state and local governments, though the specific incentives are not yet specified, Terry said.