At Great Western Malting Co., converting barley grains into malt is a fairly automated, passive process.
“Making malt is like watching grass grow – literally,” said President Greg Friberg, who got his start in the industry 27 years ago at a grain elevator in Montana.
But spurring new growth at the 74-year-old Vancouver company required a lot more effort.
Time-honored tradition
Barley often sits for days at a time, sprouting buds and converting kernels at the speed of nature. It happens in bins large enough to hold rail cars at the Great Western Malting factory on Port of Vancouver property.
Factory workers follow a 500-year-old process to finish the conversion, which is organic and kosher, Friberg said.
That process has served the company well for more than seven decades. But the global malting industry has struggled with significant changes in the new century with malt plants opening in developing nations.
Between 2005 and 2010, beer consumption was predicted to grow 2 percent or less in North America and Western Europe. But in Asia, projected growth for that period is significantly higher at 29 percent.
In Africa, the Middle East, Eastern Europe and South America, projections are between 13 percent and 17 percent.
“When a young population is booming and making more money, they’re more likely to buy beer,” Friberg explained.
That change initially left well-established companies like Great Western Malting in the lurch as they lost product demand.
“We had to recover from a changing industry,” said Jim Anderson, chief executive officer of United Malt Holdings, Great Western Malting’s parent company.
Dealing with changing demands
Corporate brewers have been in lower demand as specialty beers have grown more popular. In 2005, the Vancouver plant was operating at about one-third of its capacity with 40 customers, Friberg said.
Sixty percent of its business came from one of the world’s largest and most well-known brewers, which Great Western Malting declined to name.
The company wasn’t quite to the point of having to close the plant, but it knew there had to be an aggressive change in strategy and business plan, said Jay Hamachek, director of North American business development.
That meant maximizing the plant’s processes, storage and transportation infrastructure, Anderson said.
Now weekly efficiency reports show how Great Western Malting’s processes are affecting its customers and the company.
“It develops ownership because all of us need to know what those numbers are,” Hamachek said. “You get tired of explaining the numbers so you learn how to make them better.”
Friberg said the plant’s 88 employees are improving processes with a “team concept all the way down to the shop floor.”
“To get through this difficult time in the industry, we had to work together to create efficiency and survive,” he said.
During the difficult period, Great Western Malting examined the possibility of developing an ethanol plant on the eastern side of its property at the port. It has abandoned the project.
“We determined that we’re really good at malting and serving our customers, and that was a really good thing for us to focus on,” Hamachek said.
Looking up
Now the factory’s operating capacity is at 100 percent, and the company is selling products three years in advance. Traditionally, the brewing industry has year-to-year contracts – so this is a positive change, Hamachek explained.
Its customer base has grown to 500, and still includes four of the world’s largest brewers. Microbrewers have grown to be the company’s second largest client sector, with annual growth of 7 percent to 10 percent for the last three years.
Hamachek said the growth is due to both the acquisition of new customers and the fact that the company’s microbrew clients are doing very well.
Many of the microbrew clients are local, which is bringing Great Western Malting’s customer dynamic closer to what it looked like in the early days, when independent brewers loaded small malt batches into pick-up trucks and hauled them off to craft unique brews.
It is the company’s policy not to name its clients.
“We’re working with scientists and artists all the way through the process,” Anderson added. “Beer is getting to be almost like wine in its variety and artistry.”
Anderson said he’s seen nothing like Great Western Malting’s turnaround in his 30-year career. The company, which is privately held, declined to reveal its revenue or revenue growth.
“It’s almost like a Harvard business case study,” Anderson said. “It’s the sheer will of the people that made it happen.”
Charity Thompson can be reached at cthompson@vbjusa.com.
— Additional reporting by Megan Patrick-Vaughn
