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Sunday, May 26, 2024

Riverbend Malt House connects farmers, brewers for tastier suds

Founders Brent Manning and Brian Simpson started their Asheville-based business, Riverbend Malt House, in 2011 on a simple premise—that the exploding regional craft beer industry touted a local product but sourced a key ingredient, malted grain, from thousands of miles away.

“Asheville is all about local food, so why wouldn’t they be about local malt,” says Manning, who moved from the Wilmington area in 2009 about the same time as Simpson. The two had been co-workers for years, handling environmental assessments for a consulting firm. They view themselves as “sustainability geeks” who love the outdoors, great beer, and working for themselves.

“When we approached breweries,” says Manning, “a lot of them were like ‘Nope, we make German-style beer, so we buy German malt, or we make English beer using English malt.’” The pair also discovered they were up against an entrenched notion among craft brewers that quality malted grain came from outside the Southeast.

Beer has four primary ingredients: malted grain (mostly barley), hops, water, and yeast. While hops are difficult to grow in the hot, humid Southeast, grains such as barley, wheat, rye, oats, and wheat are quite suitable. Simpson found out via a grain specialist with North Carolina State University that none of the region’s grain was being malted for use in Asheville’s breweries.

“I thought well, we’ll just malt grain for breweries,” says Simpson, a hydrogeologist by profession. “I was super naïve.”

So began a couple of years of experimentation and market exploration before opening the doors of Riverbend in a 2,000-square-foot, former produce-storage facility in West Asheville near the Western N.C. Farmers Market. The first germination room for the grain had been the site’s “banana room.”

Hold on a minute. Why didn’t the beer lovers Simpson and Manning just start a brewery instead? 

“We loved the beer industry, but we didn’t want to be just another brewery in the city,” laughs Manning, a home brewer himself. Asheville had 13 breweries when Riverbend opened 12 years ago. Now it has 40. Craft malting is a $2 billion annual business in the U.S., yet only 1% of grains could be considered “craft malt.”

“That’s a sizable market with potential,” says Scott Hickman, a veteran tech executive hired as Riverbend’s CEO in 2016. “One to two billion dollars’ worth of malt consumed by the craft beer industry are numbers that get investors’ attention.”

The malt company’s success mirrors the ascent of the region’s craft brewing. They moved from their first location to a 10,000-square-foot plant in 2014, then to their existing 70,000-square-foot malt house in 2018. The company has added capacity since then, increasing it by 50% in 2022 alone.

Riverbend was the first and is the largest maltster in the state. Newer peers include Epiphany Craft Malt in Durham and Carolina Malt of Cleveland in Rowan County,

 

Brent Manning and Brian Simpson opened their business in 2011.

NATIONAL RECOGNITION

The company had $3 million in revenue in 2022, a 34% increase from a year earlier. Its growth sparked inclusion in Inc. magazine’s  August list of 5,000 fastest-growing U.S. companies, ranking 2,804 based on three years of revenue gains. Revenue has tripled since 2018.

Riverbend is owned by about 20 people, none of whom owns more than 20% of equity, Hickman says. North Carolinians own 75% of the shares.

In 2022, Riverbend provided craft malt to 296 different customers, mostly breweries and more than 30 distilleries. The distilleries use five-to-10 times as much malted grain than beer, per the same amount of liquid produced.

Riverbend Malt House founders Brent Manning and Brian Simpson. Photos courtesy of Riverbend Malt House.

Manning and Simpson weren’t initially focused on the brewing industry for their collaboration. They considered forming their own environmental consulting company or becoming coffee roasters. While still in Wilmington, they dabbled in a biofuel business.

The only certainty was that after more than a decade working on the coast, they were ready to live in the mountains. Simpson was an avid trail runner, while Manning loved mountain biking and fishing.

The idea of malting grain using area farmers struck a nerve. “We wondered what we could do to localize the supply chain and connect farmers to this nearly $2-billion-dollar industry,” says Manning. In concept, malting grain is simple. The execution is more complex and nuanced, depending on the variety of specific grain being used.

Malting involves germinating grain (getting it to partially sprout) using moisture and then halting the process by drying. Malting causes enzymes to develop and modify the grains’ starches into various types of sugar. The modifications are crucial to the character and flavor of the resulting beverage.

In a large room at Riverbend, Manning demonstrates how they use a large three-pronged rake to turn, by hand, twice-a-day, a several-inch-deep layer of barley on a concrete floor. This is germination, old-school-style, even though the company also has large drums that use moisture and heat to spur and stop germination mechanically.

Some brewers like the character that results when grain is germinated by hand. Either way, the barley Riverbend receives from farmers will ideally have 12% or less protein and at least 90% (hopefully closer to 95%) of the grains should germinate when processed.

LOCAL FARMERS

The attraction for farmers growing more challenging specialized grains under contract for Riverbend are the premium prices they receive. Whereas barley grown for livestock feed could fetch more than $4 per bushel, Riverbend might pay $8 per bushel.

Riverbend has 10 farmer-partners located in the Carolinas, Tennessee, Virginia, Georgia, and Kentucky who have a cumulative 2,000 acres. To receive those healthy premiums, the grain must meet criteria for protein content, size, lack of disease, moisture, and germination rates.

“There is more babying involved growing this specialty grain,” says Andrew White of ASR Grain in Shelby. ASR has grown barley and limited quantities of oats and wheat for Riverbend  for the past five years. 

The crop destined for Riverbend is monitored more closely with additional applications of nitrogen (fertilizer) or fungicides during the growing season. “We’ll make six or seven trips with our sprayer in the fields of specialized crops,” White says. That’s double the number of trips often required for a field of barley destined for livestock feed and more conventional uses.

Mature two-row barley variety Calypso in fields farmed by ASR Grain, a family farm based in Shelby. Photo credit: Des Keller

MALT WITH A MISSION

The business has come a long way since Riverbend’s founders began experimenting in Simpson’s basement. He had bought a couple of books on the topic and used an old metal washtub to steep and germinate the grain. He would then halt germination and dry the grain using an electric meat smoker as a kiln.

“Then I’d give the malted grain to Brent and he made beer,” says Simpson. “Every now and then it turned out good.” The two continued tapping the expertise and barley varieties available through North Carolina State and Virginia Tech. They also attended the Canadian Malting Barley Technical Center’s week-long Malt Academy in Winnipeg.

The two began malting 40,000 pounds of barley (20 acres’ worth from an area farm) in the fall of 2011. Then with products in tow, the two embarked on a sales pitch pilgrimage to numerous N.C. breweries.

Some beer style purists insisted their German-style beer required malt from Germany, and so on. But Riverbend’s founders also garnered interest from brewers who were starting to mix and match styles and liked the idea of a having North Carolina-produced malted grain. They made their first official sale to Grandy-based Weeping Radish Brewery, the state’s first microbrewery. Additional sales followed and business increased.

A second growth spurt arrived with the advent of “wild” beer styles in 2014. The idea goes back centuries in Belgium and the northern area of France where locals would make beer out of whatever grain source they had on hand. The resulting beers had a “rustic character” with distinct flavor profiles. To Riverbend’s favor, the market became more wide open for non-typical beer ingredients, including malt.

 “It is part of our identity to use locally sourced things whenever possible,” says Vince Tursi, co-owner of Dssolvr Brewing in Asheville. “Riverbend products make up probably 75% of all our grain used.” 

On balance Riverbend’s products are a bit more expensive than those from the large national maltsters, but it’s worth it, Tursi says. “In our opinion, we’re getting a higher quality and a different quality product.” Dssolvr’s lineup of beers includes an Italian pilsner and a hazy coconut IPA.

CEO Scott Hickman; Photo courtesy of Riverbend Malt House

By 2016, Manning and Simpson realized they needed help to plan and manage further growth. Enter Scott Hickman, a former Sun Microsystems executive who had moved to Asheville from Colorado to help manage a manufacturing company founded by his grandfather.

Hickman and Simpson met through a local investment group in which both were members. They quickly discovered a mutual love of trail running. They also began talking business.

On one of their earlier four-to-five-hour mountain trail runs, Hickman and Simpson came upon a mother bear and two cubs just ahead. The cubs scrambled up a tree while the mother headed off the trail out of sight — presumably to lead the human intruders away. Hickman, who wasn’t quite as strong a runner as Simpson, advocated for heading away from the area, which would add considerable time to the run. 

Simpson wanted to forge ahead despite the danger. “We should get out of here,” Hickman recalls himself arguing. “Brian looks at me, and understand we haven’t known each other that long, and he literally uses the line: ‘I don’t have to outrun the bear, I just need to outrun you.’”

Both lived to tell the tale and Hickman became Riverbend’s CEO.

“I give them the credit,” Hickman says of Simpson and Manning, “to have the maturity and humility to do that. They made the difficult decision as founders to bring in an outside CEO. All I’m trying to do is put guardrails around their vision.”

Hickman expanded the company’s fundraising contacts and helped expand into their present facility. “They were fully on board with what I wanted to do, which was to create more above living wage jobs in the community. That was my motivation, which aligned with their tagline: Malt With a Mission.”

Brent Manning in front of malted grain.

Riverbend now has 16 employees, all of them making a living wage as certified by Just Economics of Western North Carolina. To qualify, employees must earn enough to afford the basic necessities without public or private assistance. In 2022, that “living wage” was $17.70 per hour in Asheville. 

“Scott’s leadership has helped take this thing further than I thought we’d go,” says Simpson. “In this type of entrepreneurial environment, the first guy in the new venture is often the first guy out. But we’re still walking the path and figuring stuff out.

“I’m still blown away with the fact we are making seriously world-class malt with barley, wheat, and rye from the Southeast.”

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