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Michigan Ag Supply Chain Could Grow by Capturing In-State Market for Craft Brewing

Saturday, March 4, 2017   (0 Comments)
Posted by: Kate Oesterle
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DETROIT — Despite the rapid expansion of Michigan farmland dedicated to growing hops and grains for the state’s craft beverage sector, experts say the industry has more room to grow.

A new Michigan State University Product Center study examines the potential economic impact for Michigan craft breweries to produce beer exclusively with in-state ingredients.

It found the craft beer agricultural sector could generate up to $60.9 million in total economic output and create more than 1,300 jobs if craft brewers in the state only produced beer with Michigan-grown ingredients.

Steve Miller, an associate professor at MSU, presented the study yesterday in Detroit at the annual Great Lakes Hop and Barley Conference.

The findings are based on 2015 state production figures showing Michigan breweries produced nearly 520,000 barrels of beer that year, according to data from the Brewers Association, a Boulder, Colo.-based trade group for independent brewers.

The Brewers Association said updated state production data for 2016 should be available by April or May.

Michigan grown and processed ingredients, including hops, malt and barley, accounted for approximately 7 percent of the beer produced in the state in 2015, or the equivalent of roughly $4.2 million in economic impact, according to the study. Miller estimates the craft beer agriculture sector employed approximately 96 workers in that year.

Despite the potential for growth in the agriculture supply chain serving craft beer outlined in the study, the industry still has a long way to go before that can become a reality, Miller said.

“It really depends on the consumer,” Miller wrote in an email to MiBiz following his presentation. “If consumers are willing to pay more for local ingredients, this can be a very viable market. But we really have not seen consumers show this level of interest. They do want beers brewed locally, but whether they will respond to locally-sourced ingredients remains to be seen.”

Read the full article via MiBiz

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