A brewing boom amid challenges
Craft beer industry’s local ingredients, pricing concerns
Brent Ridge and Josh Kilmerpurcell — owners of the specialty farm craft store Beekman 1802 — stood in front of an audience in downtown Schenectady to spotlight a new product and partnership.
The couple, flanked by representatives from Brewery Ommegang, one of the oldest craft breweries in the region, unveiled their new goat milk stout beer.
Aside from quenching the thirst
of locals on a particularly steamy September afternoon, the event highlighted the rapidly growing $3.4 billion New York craft beer industry and the impact it’s having on communities throughout the Capital Region.
“The craft beverage explosion has really done something to establish community,” said Jay Larkin, an assistant professor with the school of hotel, culinary arts and tourism at Schenectady County Community College. “Because of collaborations like this one, you’re seeing more and more (that)
they’re using New York-based products. So now you have the agricultural component. You start drawing people all over, you get the tourism component. It’s more than just putting liquid in a bottle or in a can, really.”
The industry’s growth was kickstarted in 2013 with the passage of the state farm brewing law, which created a farm brewing license. The license allowed farm brewers to operate taprooms, make and serve hard cider by the glass, as well as operate up to five regional
“The craft beer scene in America and New York state is absolutely at a fever pitch.” Doug Campbell, president of Brewery Ommegang
branches to sell beer, wine, spirits and merchandise.
The law also required that at least 20 percent of ingredients farm breweries used be grown in New York state.
The law, modeled after the 1976 Farm Winery Act that spurred the growth of wine production in the state, has been a rousing economic success. Between 2013 and 2017, the number of breweries in New York nearly doubled to 329 from 165, and by this year had topped 400, according to the Brewers Association. Of those, 188 were farm breweries.
New York’s production rate of more than 1.2 million barrels of craft beer per year ranks sixth in the country, according to the Brewers Association, while the $3.4 billion of total economic impact in the craft beer industry is the fourth highest.
“The craft beer scene in America and New York state is absolutely at a fever pitch,” said Doug Campbell, president of Brewery Ommegang, which opened 21 years ago. He added
that some states now have more craft breweries than existed in the entire country when Ommegang launched. “Fifty percent of the breweries alive today (were) not here four years ago.”
The industry boom, though, does not come without a number of concerns.
The farm brewing law requires all farm breweries to boost the percentage of New
York state-grown ingredients in their beer to 60 percent by Jan. 1, and to 90 percent by 2024.
Several local breweries, malt producers and industry experts expressed confidence that New York hop and barley farmers will be able to meet the rising demand for locally grown ingredients, but a two-part study conducted by Cornell’s Cooperative Extension on the craft beer industry raised concerns.
To meet rising demands for New York state malt, another 1,584 acres of barley will be required by 2024. That’s in addition to the 2,021 acres currently used for malting barley in the state, though the study identified more than 2,600 potential acres that could be used for barley production if farmers were “given a favorable market.”
Also, only certain hops and
barley can thrive in New York’s climate. Brewers using locally sourced ingredients have only a limited choice of hops or specialty malts like high-kilned malts and wheat and rye malts — limiting the range of beers brewers can craft, according to the analysis.
Pricing of regional ingredients is the second biggest concern brewers have after concerns over quality. New York state malt continues to cost brewers 96 cents per pound, about 40 cents more than out-of-state malt. That price gap may widen further as local ingredient requirements increase, the study predicted.
But Larkin of SCCC says he doesn’t see higher ingredient prices becoming a major problem for breweries. Consumers, he believes, are willing to pay higher prices for good, local brew.
“The price point for craft already is a little different from your macro-brews, but it’s still
something, again, you’re buying quality,” Larkin said. “The ultimate craft and ideal consumer is someone that’s looking for quality, not quantity. Anybody can sit down and drink a fistful of beers in the afternoon, sitting in their backyard. It’s another thing to pursue it for the quality of product.”
For malt producers, the artificial demand created in 2013 has been a major boon. While the lack of variety in New Yorkgrown hops and barley was an issue, the Cornell study projects farm brewery production will double by 2024.
“There’s always shifts to be made, but I think (malt production) will keep growing,” Erin Tones, manager of 1886 Malt House in Fulton, said. “The demand for local products is still increasing ... It means a lot for every facet of the industry.”
The Troy Restaurant and Craft Beer Week, which continues through Saturday, Sept. 15, features 16 breweries, restaurants and vendors, and is one of several ongoing events in the area celebrating the flourishing beer scene. Albany will hold its tenth annual Oktoberfest block party on Sept. 29, and the Hudson Valley Wine and Food
Fest in Rhinebeck winds down on Sunday.
Larkin, who developed the degree program at SCCC for craft beer brewing and beverage management, said his students have had no trouble joining the 13,000 full-time employees within the New York craft beer industry, saying “the jobs are there.”
Both Campbell and Larkin worry that the rapid growth in breweries could lead to a market glut. But Kevin Mullen, owner of Rare Form Brewery in Troy, said he believes the industry can adjust.
“I think (farm brewery law), it’s really good for New York breweries. It’s really helped us grow. I think the thing is, we have to remember that this is an experiment in its own,” Mullen said, “And that’s what’s going to benefit, not only the breweries, because what we’re really trying to do is benefit the farmers, too.
“So if we want to benefit everybody across the board,” Mullen added, “then we just have to look at it on a year-to-year approach and see what works the best.”
diego.mendoza-moyers@ timesunion.com 518-454-5323