Investors aim to build $15 million malting facility in Butte; could employ 10-15 people
Mike Smith
[email protected] Jan 17, 2017 Updated Jan 19, 2017
Butte businessman Ron Ueland is joining other local investors to build a $15 million facility that will produce a variety of malts for a craft brewing industry that is booming in Montana and beyond.
Their venture, Montana Craft Malt, is looking for a site in or near Butte to build their plant, which will use only Montana-grown barley to make specialty malts.
The plant will be able to produce 10,000 tons of malt per year, more than twice the amount used now by craft brewers in Montana. That’s why it will be marketed outside of the state as well, Ueland said Tuesday morning.
Ueland said it is too early to name other local investors, but they hope to announce a site for the plant in the coming month and be operational by next year. It would employ 10 to 15 people.
He said Montana has arguably the best growing environment in the world for barley — sophisticated growers, strong logistics infrastructure and plenty of water.
“Craft brewers have this need for diversity which they are not getting with the macro-malters,” he said. “On the other hand, you have these good farmers out here with the talent to grow this sophisticated barley.
“They are looking for these types of opportunities. Montana agriculture is looking for them, and then with my seed genetics background, I said, ‘This can be done’ and we have a nirvana. Everything lined up.”
Ueland is a consultant for Butte-based Northern Seed LLC, which provides seeds, seed treatments and services to growers.
The malt plant will be designed to produce smaller batches of malt for craft brewers, allowing for flexibility and versatility absent with large-batch, production-centered approaches used by macro-malters.
Ueland said the Montana Connections business park and tax-increment financing district just west of Butte are being “strongly considered” as a site for the plant.
They also are identifying a select group of craft brewers to partner with going forward that includes at least one in Butte and others in Montana.
The beer industry as a whole is down slightly, but sales in the craft segment of the market have been growing for the past 10 years and were up nearly 13 percent in 2015, according to the Brewers Association.
Jennifer O’Brien, the marketing leader for Montana Craft Malt, said the growth was initially seen as a “flash in the pan,” but the trends have held up.
“If you walk down the aisles of any grocery store you will see that craft brew is really starting to take up shelf space,” she said.
The growth has led to demands for high-quality, specialized malts in order to deliver sugars for fermentation and provide additional flavor for each beer variety.
O’Brien said craft brewers prefer not to buy from commodity markets where ingredients are not widely differentiated and their origins are unknown.
They want to buy diverse varieties locally so they can “differentiate their product without paying import taxes or high shipping costs,” she said.
“It is a completely different experience than what is offered with macro-brewers,” she said. “It’s about flavor and heritage and experience and ambiance that comes with the craft product.”
Brandon DeShaw, who is leading engineering and operational aspects of the project, said “buying local” is a genuine trend.
“It’s getting to know your local brewer and wanting to buy food that is grown locally,” he said. “If I can buy beer that is grown locally or is Montana beer, I will do it.”
The investors used marketing data from the Montana Department of Commerce and surveyed numerous craft brewers to validate the opportunity.
They plan to partner with Northern Seed and a barley lab at Montana State University under the direction of Jamie Sherman to identify and test base malts and specialty malts.
The Montana Grain Growers Association welcomed the news.
“Specialized malts for the growing craft brewing industry, made from our members’ high-quality barley, will be a fascinating addition to Montana’s ag community,” said Lola Raska, the group’s executive vice president.
Ueland said the venture will help meet malt needs in Montana and nationwide, which is why the plant will be able to produce twice as much as the market inside the state uses now.
It will add value to Montana grains before they are shipped out of state, he said, helping growers, craft brewers and the local economy. The plant will create construction and operations jobs, bring people to Butte to do business and use local utilities and supplies, he said.
Kristen Rosa, administer of Butte-Silver Bow’s industrial taxing district, said county officials are hopeful the Montana Connections business park is chosen as the location for the plant.
The district board just committed to extend a road and utilities such as electric and gas to a central area of the park, which will be needed once the National Guard relocates its Butte operations there in 2022.
Those utilities would be extended quickly if the malt plant is located there, she said.
Whatever the site is, Ueland said it’s possible a ground-breaking ceremony could be held this spring, with the first batches of malt possible by the spring of 2018.