Are beer companies that use corn or rice simply trying to increase their profit margin?
Or do they think it improves the quality of the beer?
As craft beer has grown in popularity and favored by those who consider themselves true “beer geeks,” historically, paler beer, made from corn and rice, has been the most popular.
Even as pale beer sales are stagnating, it still dominates the market.
According to the Brewers Association, craft beer still only accounts for 12.3% of the market by volume, and 22% of the market by retail dollar sales.
The consumers often prefer the lighter beers, and therefore the use of corn or rice by breweries is more than just a cost-cutting initiative, but a response to popular demand.
Where we know there’s more interest in actual barley-made barley is in China. As Brennan mentioned this week in an interview with the Western Producer, he thinks that Canadian barley exports to China this year are the reason is that AAFC will have to raise its barley export numbers.
So conclusion, demand for malt barley is being limited by the negative impact of substitution effects from the likes of corn and rice, especially the latter since the hipsters and millenials are bigger fans of that than anything it seems.
Thus, domestic demand for malt barley has trended a bit bearish, but the international opportunities are certainly exciting.
Why Do Some Brewers Use Rice or Corn in Their Beer?
Traditionally, barley was the main grain used in brewing beer. For the most part, it still is. However, many brewers use other grains along with barley.
Most of the beer sold in the world is made with rice or corn making up a healthy portion of the grain bill.
Beer geeks accuse the big brewers of doing this as a way to make cheap beer which they then push on the beer drinking public through relentless marketing. I cannot deny that marketing is a big part of the big brewers’ strategy to move beer. And, I must admit that I do not like most of their beer.
But, I just do not buy the argument that they add the rice and corn simply to increase their profit margins. In the first place, they do not make a secret of it. Anyone touring their breweries is told openly that these ingredients are used. Budweiser bottle labels brag about the quality of rice used to make the beer.
I believe that they believe the grains make their beer better.
The grains certainly make it lighter and that seems to be the goal of most makers of pale lager. The lighter the better is how that market works.
To those of us who like flavorful beers, this might seem like a careless way of brewing bad beer but, to brewing companies who for more than a hundred years have strived to make the lightest beer possible, it probably seems like the best thing to do.
You and I might disagree but it is hard to break a habit that made so much money for so long.
Since the Nineteenth Century the formula seemed simple, the lighter the beer the better it sells. It has only been a few years since this strategy appears flawed. Every year for the past few years sales of pale lager is been either in decline or stagnant while sales for craft beer has been leaping up by the double digits.
All that being said, pale lager still dominates the market. There are still plenty of people out there willing to pay for that lightest of beer styles and I doubt that that will change anytime soon.