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23rd April 2024

New Era of Beer

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How do small players brew more choices of beer for the lager-loving Filipino market? One microbrewery described the process as a “revolution”.

 

To understand how craft beers work, you need to get into the detail of the brewing process from four best friends who left their jobs for beer.

 

Raffy Taruc, Miguel Buling, Kiyo Miura, and Brett Lim have put their faith and future in producing microbrews – the kind which you can make at home. It will be an underestimation though to say that their beers are homemade. One year after introducing Katipunan Craft Ale to the public and going full time in the business, their “subversive” brand has now become the largest local microbrewery in the country by volume.

 

Taruc, Buling, and Miura explained that a beer has four key ingredients – malt (germinated barley), yeast, hops, and water. Lim was not around for the interview.

 

Brewing

 

Malted grains are boiled in a process called mashing to let the natural enzymes break down starch into sugar. The grains are filtered out and you have a highly sweet juice called wort. This will be boiled with hops that balances the sweetness with bitter notes. After which, the wort is combined with yeast to start the fermentation process. From here, the two styles of beer emerge. Bottom-fermenting yeasts produce lagers, while top-fermenting, ales.

 

Microbrewers like Katipunan experiment by looking at certain ingredient qualities and playing with the process. You can have chocolate and espresso notes when malts are roasted, said Taruc. One can bring out the natural flavors of barley, similar to how wine can taste like fruits and oak. The quality of water also adds characteristic. For instance, high sulfate levels in your local tap water is best for pale ales. Moreover, process variables, such as temperature while mashing, affects beer quality.

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The only things untouched are the four ingredients. “To a lot of craft beer drinkers, it’s a sacrilege to add extra ingredients to your beer,” said Miura. Germans adhere to what they call as the Reinheitsgebot, or Purity Law, first proposed in 1497 that only allows local beers to come from water, barley, and hops.

 

Yeast was only discovered by Louis Pasteur in the 1800s. This ingredient would later be included in the newer law called Provisional German Beer Law.

 

Expensive

 

Each microbrewery has its own perfected recipe from the permutation. You can just imagine hundreds of craft beers on a shelf, each with its color, aroma, and bitterness that even the newbie can easily distinguish.

 

Enter The Bottle Shop and that is exactly what you will find. Jim Araneta, owner of the retail shop and Global Beer Exchange, Inc., a distributor, has at least 200 beverage products, mostly beers, in his shelf. He opened his business in 2008, when rarely anyone knew about craft beer, save for beer enthusiasts who had come from the U.S.

 

“It’s brewery that before profit looks at the quality of the product” is Araneta’s definition of a craft beer. “And if they include ingredients – such as preservatives, chemicals, and substitute ingredients –  that will bring down cost then for me, that will no longer qualify [as a craft beer].” According to him, beer costs can substantially fall because of product substitution. The imported barley would be replaced by the low-cost rice or corn, although big companies also have the advantage of economies of scale that slims down unit price.

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Craft beers are generally more expensive than the mainstream brands. Katipunan’s suggested retail price alone is more than 300 percent that of a regular 330 ml. The high-switching cost has limited the market to the upper-tier classes. Loyalty to the regular brands also made craft beers less appealing for beer drinkers in their 50’s, revealed Araneta. The more experimental type of crowd, who are professionals in their mid-20s to late-40s, will find the experience as different. “When you’re drinking Katipunan or Bogs, that’s veering away from the big players. When you get into that, it’s hard to go back to the regular beer,” he said. Bogs Brew is a Bacolod City-based microbrewery that began in 2007.

 

Against the giants

 

They’re watching us for sure…  They have to watch.Jim Araneta | Global Beer Exchange, Inc.

 

The rise of microbreweries has been feted by lifestyle media as a David-versus-Goliath battle with the giants. But unlike the biblical epic, the “revolution”, as Katipunan’s founder put it, isn’t as easy as a swift victory by poking Goliath in the eye. Anecdotes from players hint that supply is still limited vis-a-vis demand. Additionally, since Bogs opened six years ago, the number of players has only grown to four. In the U.S., a more mature market, 310 microbreweries have opened in 2012 alone according to the Brewers Association, an American trade organization.

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This year’s news may accelerate the trend. In August 29, a new Filipino microbrewery will be launched. A few months before that, Katipunan Craft Ales relocated to a bigger production space and expanded its distribution network to 10 outlets in Metro Manila. Local microbreweries and distributors welcome the growing shelf.

 

“We’re following the U.S. model, where microbreweries, instead of competitors, are colleagues,” said Miura, who said that consulting the pioneering local microbrewers was crucial to their initial success.

 

More than 120 years after San Miguel Beer brewed its first set, the beer scene is confronting a slow revolution of choice, the same revolution that enabled the 2,360 American craft beer makers eat up six percent of share in the U.S. beer market, which takes a 10-percent share in terms of sales in dollars. The Philippines is far from getting there, said Araneta. It took the U.S. around 30 years of development to reach that figure, but this hasn’t stopped Goliath from peeking twice at David with its one eye.

 

“They’re watching for sure,” Araneta said. “They have to watch.”


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