I recently took a trip to Chicago and had a tour of the Goose Island Brewery anticipating anything but blog topic inspiration. It ends up that on the tour, as the brewing process was being explained by my tour guide Cormick O’Connell the brew specialist; I learned there are a TON of supply chain and strategic sourcing obstacles being faced in the beer production industry. Aside from the intricate processes of malting, milling, fermenting, and packaging, I recognized some distinct sourcing boundaries that have been tackled by many brewers and distillers, including Goose Island.
Cormick explained that recently, there has been a huge uprise in the sourcing of European specialty malts. This is particularly interesting since European ties are part of Goose Island’s history— as the company was founded when Goose Island founder John Hall traveled across the continent and decided “America deserves some damn fine beer like this, too.” With roots in Europe and a growing demand for Europe’s malt market, tons of American brewers look to strategically source these resources for a competitive stance. Depending on the flavor and color demands of the brewer, there are endless amounts of yeast strains and malts to choose that require extensive storage facilities. If these facilities aren’t managed properly, there is a danger of malt spoilage brought about by improper aging or even sediment distributing during global shipping. With a completely different tasting beer, a beer aficionado can be turned off from a brand for a silly supply chain incompetency hiding the true taste. Luckily, Cormick informed me that Goose Island has never had to respond to this type of issue.
From some independent research, I was able to grow increasingly aware of further demands within brewing supply chains. In regards to challenges sourcing European specialty malts in particular, I found that there are even firms who specialize in the barley-malt-beer industry supply chain since it has become so convoluted. The Malteurop group, for instance, serves global brewers who wish to maintain sustainability and value in their supply chains. Since brewers’ expectations and demands surrounding malt involve certain quality levels, pricing needs, and availability, there are a good amount of challenges that can be addressed through strategic sourcing and precise buying strategies.
According to Cormick, one area that Goose Island and the industry as a whole has taken advantage of is the sourcing of hops from hop unions. In beer, hops are female flowers that are used for flavoring and typically leave the bitter sensation experienced from stronger IPAs or ales. Through sourcing their hops from hop unions, they were able to reach cost savings and utilize high quality hops that they wouldn’t be able to get anywhere else. Cormick told me this was a great tactic for quite some time—that is, until they started using their own hops and developing some of their direct materials in-house.
One interesting piece Cormick shared dealt with the barrels used in the aging process for some of the reserve brands the brewery produces such as Sofie or Matilda. At one time, barrels weren’t seen as conducive to mass brewing, and thus weren’t a desired component of the beer production process. More recently, Cormick explained that the fine-beer market boomed and barrels were seen for their ability to contribute to the taste of the end product. With that, barrels are commonly purchased from a broker, and involve a unique buying process dependent on the requirements of the broker. Due to varying processes, there is room for inconsistencies and variety from one supplier to another. Attention towards supply chain optimization and supplier management were two assets in tackling the complexities of barrel broker agreements.
Whichever sourcing issue they confronted as the beer industry shifted, Goose Island seemed to evolve and grow with the developing landscape. Since I don’t too often have the opportunity to chat with brewers who understand a robust supply chain process, it was pretty interesting to catch a glimpse of some of the nuances of an industry I didn’t realize had such an intense supply chain. If you find supply chain and strategic sourcing interesting, the next chance you get to learn about product development, take advantage of it! You’d be surprised the hefty role strategic sourcing can play in a seemingly cut-and-dry industry.
Image courtesy of www.thrillist.com