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What is supply chain risk, and how does it affect a brewer’s decision around malt? Now more than ever, brewers are assessing their malt supply, and understanding the value of Proximity:
Cost – is your malt supply susceptible to multiple segment logistics and commodity pricing volatility?
Quality – is your malt supply chain susceptible to unpredictable quality?
Caution – is your malt supply chain secure?
Conscience—is your malt supply earth friendly and sustainable?
Over the last few years, our industry’s been made painfully aware of the uncertainties and costs that international trade policy negotiated at the highest levels can bring to procurement of essential items, like aluminum cans. The same concerns arise for brewers’ raw materials well before the beer is packaged, though. Barley, wheat and other brewing grains—especially imported grains–have a complex supply chain that is increasingly at risk for disruptions caused by weather, political and economic realities, and now, pandemic. By design, Proximity Malt protects brewers’ grain supply chain — seed to brew kettle. At two full-scale domestic locations ideally suited to source regional grains, we manage a highly flexible, secure and sustainable malt source from base to black. It’s no coincidence that our two malthouses are located in the heart of premium barley growing farmland. In other words – Proximity offers end to end visibility, and more supply chain control over cost, quality, conscience and caution.
“The unfolding COVID-19 pandemic is so far having little impact on the global food supply chain, but that could change for the worse – and soon – if anxiety-driven panic by major food importers takes hold, the World Food Programme (WFP) warned on Friday.”: UN New Report – COVID-19: The global food supply chain is holding up, for now
While Romania isn’t a malt exporter, the above story strikes at the heart of global concern around agricultural security of supply: Bloomberg Rpt., 4/3/20: Romania became the first country to cut off grain exports during the coronavirus pandemic, a dramatic move that could fan worries about the global food supply. The government passed a decree banning the sale of grain to countries outside the European Union during a state of emergency, which is expected to last until at least mid-May. “We can’t afford to be left without wheat because of the greed of some grain owners,” Prime Minister Ludovic Orban said in a televised address on Thursday. “If necessary, I’m determined to ban these exports and even seize them.” Bloomberg Rpt., 4/3/20
Now is precisely the moment for breweries reliant upon global supply chains for any portion of their business, to assess options and adjust for tomorrow. Companies – from commercial mega-brewers like ABI, all the way to the newest nano – that import raw materials such as malt and hops are part of a global agricultural supply chain. As importers, they are increasingly subject to supply chain risk, from crop issues related to global warming and soil degradation, to global disruptions caused by pandemic, political or economic risk. These are today’s realities to acknowledge, understand and mitigate, where possible.
We didn’t see a global pandemic in our crystal ball, but from our inception, Proximity Malt’s primary vision was to help customers limit risks inherent with imported grains -whether from Canada or Europe. The problematic scenarios are all out of the individual player’s control. By design, our entire supply chain, from seed to harvest, malthouse to brewery – is domestic and visible to our customers. Our commitment to ‘Made in the USA’ isn’t out of an idealized sense of patriotism, or a gimmicky sales trick. It’s a core value to provide our customers with true security of supply for their most fundamental raw material: malts processed in the USA, from regionally grown barley.
Switching malt supply is not always easy. Brewers need assurance that a new malt will perform in the kettle, pass the sensory tests, and beyond all of that – be reliable, consistent and cost efficient. The Proximity Malt technical and sales teams are here to help you take the first steps. Talk to your Proximity Sales Rep about our full portfolio of malts – and ask him or her what a successful pathway to migrate from an imported malt supply might look like. She’ll help you identify a malt to begin with, discuss the steps to trialing that’ll best suit your brewery, and define a timeline and plan. It’s time to get serious about controlling malt costs and proactively managing supply chain risk. Better Beer, Better World.