BURLEY — Despite a difficult sales year, MillerCoors sees advantages from its merger two years ago.
U.S. beer sales volume fell by 2.2 percent last year, the highest rate since the 1950s and the first decline since 2003. According to the Beer Institute, 2010 year-to-date U.S. beer production is down 3.9 percent from the same period last year.
But brewers are noticing that while consumption of the major brands is down, craft beer sales are up. Nationwide, craft beer sales are up 7 percent. Dennis Puffer, chief integrated supply chain officer for MillerCoors, told growers that sales of Blue Moon are growing by 20 percent. Blue Moon is a Belgian-style craft beer owned by MillerCoors.
“We’re having an okay year, but a difficult year,” he said. The Beer Institute reports that MillerCoors posted a 1.9 percent drop in shipments last year.
Bill Coors, grandson of Coors Brewing Company founder Adolph Coors and a member of the board of directors until 2003, spoke briefly at the field day held at the Burley elevator.
He said the industry is very different today compared to when Coors drew his first paycheck 71 years ago. Back then 70 breweries just like the one at Golden, Colo., had survived Prohibition. Of those, just three are left: Anheuser, Miller and Coors, and together they control 80 percent of the U.S. beer market.
“How did we do it? With all of you. We’re the only brewery in the world that has integrated operations back to the growing of barley, the development of barley,” he said.
The Moravian 69 line produced by Coors contract growers today, grown widely in southern Idaho, is a descendant from a single head of malt that Coors’ father acquired 75 years ago. Coors was concerned about the quality of malt in America and had imported some malt from a province in Czechoslovakia called Moravia. While the malt made excellent beer, the small company could not afford to buy more. But the importer who handled the sale had given Coors a single head of two-row barley that sat on his desk for months.
Finally, the office manager took that single head and planted it in his home garden. After six years of seed increase, the company had enough barley to meet the brewery’s production of 126,000 barrels annually. Today, production is 200 times that amount. The Burley elevator alone purchased 361 million pounds of barley in 2009, equivalent to a 23-mile line of rail cars.
“No other brewery worries more about malt and no other brewery worries more about barley than we do,” he said. But the company has also kept its commitment to support growers. “We knew we had to form a partnership and a friendship with the people who grow the barley.”
Jim Peterson of Carey has grown Coors barley for 30 years.
“This is a special outfit,” Peterson said. “These guys are great to work with, they really care. It doesn’t matter what time of day you call, they always answer the phone.”
Peterson earned Top Grower for Idaho honors for his 2009 crop but was beaten by 1/4 of a point for the company wide honor. He said he is paying more attention to the 2010 crop starting with irrigation management. One plugged nozzle could be the difference between winning company-wide honors and going home empty handed.