28 Feb The International Implications for Indiana Craft Beverages
by Mark E. Lasbury for Indiana On Tap
There are important things going on in the world right now, and all eyes are on both the aggression of the Russia government/military against Ukraine and the implications that the war will have on us here in the states. The Indiana craft beverage industries pale in importance compared to these international affairs, but several items have come up in the past few days that indicate that there are links between the two, and that local news is almost always going to trump the news far away.
The News. The latest item I noticed emphasizes that Indiana craft beer is an important player here at home. The Indianapolis Star is a large paper, owned by Gannett News, the same people that run USA Today. They cover all national and international stories and are especially busy now that there are so many things going on domestically and in Eastern Europe. Yet the Sunday Indianapolis Star (2/27) front page story above the fold was about the expansion of Sun King Brewing to Florida.
image credit: Huff Post
I don’t mention this to diminish the importance of the Sun King story; in fact, it points out just how much craft beer, and Sun King in particular, is part of what makes Indiana work and grow. One, the Star took the time to develop and write the story, and two, they deemed it of great enough significance that it kept the front page despite it being day four of the Russian invasion.
Ukraine – breadbasket of Eurasia. When Ukraine was one of the Soviet republics, it provided grain for most of the rest of the USSR, and now they are the world’s fifth largest producer of barley. They are also very important in mineral deposits needed for high tech and low-tech industries, including aluminum.
Barley is crucial for the brewing of beer and the distilling of many spirits, so it can be expected that the invasion of Ukraine by Russia is going to disrupt the world’s barley supply at least temporarily. In fact, by day three of the conflict prices had already started to increase. Barley is fully 30% of the ingredient costs for beer, with some styles (barleywines, stouts, bocks, etc.) using even more barley and therefore drawing more of the ingredient cost.
True, much of the barley used by craft brewers is farmed in the US, Canada, and Europe, but if mega-brewers can’t get the amounts they need, they are going to start buying up local supplies. This may make barley harder to get for US craft brewers. Also, barley is a global product, and even if the supply isn’t disrupted significantly here, prices are likely to increase since they are tied to European market movements.
Prices for beer are going to be affected if the disruption lasts any time whatsoever, and it isn’t just beer. The higher alcohol content of spirits means that more sugar is used, and that sugar is derived from grain, including barley. More barley needed means a higher price when grains are scarce. Some believe the current conflict, if extended, could add a dollar to the price of a cocktail.
As far as aluminum goes, prices have surged to record levels in the few days since the conflict began. Ukraine produces and exports a decent amount of aluminum (less than the US), but Russia is the 3rd largest producer in the world. Disruption of Russian commerce and trade is definitely going to have an effect on aluminum – an industry that has already been hit hard by the supply chain problem and inflation. Just as so many craft breweries were increasing canned beer options to deal with the shutdown during Covid, the price of aluminum started to rise and has continued to do so. This latest issue is merely exasperating an already significant problem.
image credit: Cardinal Spirits
Russian energy. Less direct than effect of barley or aluminum, the removal of many Russian banks from SWIFT and disruption in shipping and production will undoubtedly drive energy prices up. The US imports almost 600,000 barrels of oil from Russia EACH DAY, and as oil prices fly past the $100/barrel mark, it’s going to cost more for many of the things that help to produce products here and move them to market. Whether your brewhouse is steam, gas, or electric, you’re going to paying more to boil your water and wort. If you’re looking to get supplies delivered or moving your beer/spirits into distribution, you’re going to pay more for gasoline – it’s just like putting gas in your car – which you well know you are paying more for now.
Russian Vodka. These last two issues are more about emotion and support of an oppressed people, but they are in some ways just as important as the purely economic issues described above. And even more, they can end up having monetary effects as well. It may be a small gesture, but bar owners around the country have made videos and taken pictures for posts of them pouring out Russian vodkas from their stocks and vowing not to purchase any more – why would they support the Russian economy now. True, it hurts some everyday Russians, but if it takes off, it will put more pressure on the country economically to try to entice them to reverse course.
Liquors stores too have started to remove Russian spirits from their shelves, suggesting that this is a slightly more than a symbolic activity. In Canada, where alcohol sales are controlled by the government, the Finance Minister ordered all Russian spirits to be removed from liquor store shelves.
However, it may be more important to consider this in the longer term. Indiana (other states as well) has a thriving artisan distilling industry and they don’t just exist – they make great products. The current situation offers a great opportunity for bars, stores, and drinkers to discover and embrace Indiana made vodka. There are over 40 artisan distilleries in the state, and just about every one of them makes better than good vodkas.
When Walter and I think of vodka in Indiana (I’m not a big spirits drinker, but Walter contributes her share and mine), we first think of the Cinnamon Vodka from Hard Truth Spirits – have you ever dropped a shot of that into the Common Necessity hazelnut porter? We call it Liquid Christmas.
image credit: NY Daily News
We also think of Cardinal Spirits in Bloomington, which always ranks among the top vodkas in the country, including a 2nd place finish in the 2021 USA Today top craft vodka distillery competition. Danny Boy’s Buddha Vodka has been a triple gold winner, and others have been equally lauded, 18th Street Distillery, Oakley Brothers Distillery, Hotel Tango Distillery, Edwin Coe Spirits – the list is long, so check out the distillery map at Indiana On Tap and go find out for yourself.
Russian Imperial Stouts. Will craft breweries start renaming RIS beers now, just as French fries became Freedom fries in 2003 after France refused to support the war against Saddam Hussein and Iraq? The Freedom Fries movement didn’t last that long as the support for the war waned quickly, but it is a precedent that could be followed. What would you call them? – Ukrainian Imperial Stouts, Resistance Stouts, Insurgency Stouts? These beers are often named for Russian characters or places, and could they go by the wayside, at least temporarily? Could sales of these beers be affected – maybe. Probably not Stalin’s Darkside from Evil Czech, since that yearly beer release celebrates the death of Josef Stalin.
I asked Richard Mendoza of 18th Street Brewery whether they had thought about changing the name or style of the Tsarina Valentina they served at 2Toms Brewing’s Frozen Firkin Fest on Saturday. He said that (rightfully and logically so) they had not considered it yet, but he also said I wasn’t the only person to ask about it. Such is the way of things, everything is connected, and people see those connections and want to make a statement. It may be beer, but it’s also a part of the great web of culture.
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