Wednesday, June 27, 2007

Anheuser-Busch, USDA & Organic Hops

Disclaimer: While this is not kind to a large brewery in the US, I need to say that they were the only brewery to return my email with some substantial thought. Some smaller brewers did reply with an "I'm busy now" message, which I understand and respect. I do want to say thank you to A-B for taking the time to write a thoughtful reply.

To begin, I can't say I'm an expert on organic foods, but when possible (and feasible) my wife and I buy organic and local foods. For about a month now I've been following the story about the USDA allowing non-organic materials to be 'certified' organic. Being a beer enthusiast my focus is on Anheuser-Busch's role in this and their goals with regards to adding hops to the list of allowable non-organic materials. Knowing a thing or two about beer I originally misunderstood the intent thinking that Anheuser-Busch were hoping to label beers "Organic" if they were made primarily with organic materials, and with this I didn't have a big issue. Then I realized what they were trying to do, what they are in fact doing. Anheuser-Busch and Kraft (along with others) are seeking not to call their products 'organic', but instead are seeking to call the hops that are not organic 'organic'. This is flat out insanity and a gross mis-use of the organic standards the USDA is supposed to represent. At least, this is my impression as it stands right now. Again, I am not an expert here; however, I believe I have a better grasp on this than most major news outlets spewing out anything they can.

Here is the issue, essentially, as paraphrased on an organic foods website:
Nonorganically produced agricultural products may be used as ingredients in or on processed products labeled as "organic" when the product is not commercially available in organic form.
This seems somewhat reasonable, but only somewhat. When I consider A-B's role in this and their desire to label non-organic hops as organic and I begin to feel my blood boil. Why? I live not far from Bison Brewing, have been to Ukiah Brewing and have tried other USDA certified organic beers - certified under the CURRENT rules. These small companies have worked hard to source organic materials for years, paying the premiums and working on much tighter profit margins. I know Wolavers has done this too. These guys are essentially proving that product is commercially available, but A-B is insisting otherwise. Sure, if Anheuser-Busch want to market their organic beers they'll need exponentially more hops, and there may not be a market for that right now. But why not change that? Why not contract with the farmers and have them grow the organic hops to meet their business needs? Why not? Profit margins.

Changing what is called organic is a horrible model for the USDA to accept and it appears that there is little public input into this matter. What this will do is essentially remove the market demand for USDA organic beers that smaller companies are currently filling. Bison, for instance, is experiencing unparalleled growth with the more health and environmentally aware market. They operate on tight margins because they spend time finding the hops and grain and reformulating their recipes because the organic materials have an inconsistent yield and quality year after year. They're working their butts off and only now seeing their product widely accepted. What has A-B done? Well, seems as though they didn't want to do that kind of work and figured it was more cost-effective to lobby for this insane change in our governments organic certification for hops. Gee, why didn't Bison think of that? Probably because they had their consumers interest in mind over their profit margins.

Now, according to a recent MSNBC article, small organic beer producers agree that organic hops are not currently available in the quantities A-B is most likely hoping for. This quote is from Amelia Slayton of Santa Cruz's Seven Bridges Cooperative.
"If a large brewery were forced to use organic hops, they would have a very difficult time getting the mass quantities they were looking for right away," Slayton said. "But Anheuser-Busch also has more resources than a small company like us. They are in a better position to start developing more sources for organic hops."

Slayton calls the USDA's proposed rule "shortsighted" because of simple laws of supply and demand. While organic hops aren't yet commercially available on a large scale, she said they would quickly become plentiful if demand was there.
That second paragraph sums up my concern. If Anheuser-Busch is really dedicated to producing a line of organic products for their consumers, they have the influence to make things happen. Additionally, these recipes are their own. If there are hop alternatives that are organic, or were available when they developed the recipes, they should have taken this into consideration when creating these beers.

A compromise should be available. According some organic education and promotion sites, they understand that not all varieties will always be commercially viable in organic form. So, what if Anheuser-Busch simply lobbied for these varieties? I don't know the answer, but I do feel as though adding all hops to this USDA list is a major oversight.

I emailed Anheuser-Busch for some clarification on their part, also to let them get their side in this piece. They replied, thoughtfully, with some of the following insights.

To put this issue in perspective, Anheuser-Busch brews two certified organic beers, Stone Mill Pale Ale and Wild Hop Lager. They are the first of any brewer to be nationally available and both have been growing in popularity since they were launched in September 2006.
So, again, it appears that the concern is not that Organic Hops are not commercially available, but instead that they are not available in the quantities needed to saturate the market. I actually sympathize with this a bit. Afterall, A-B is a business, a big one at that, and they need to do whatever they can to increase their currently decreasing marketshare. This current niche market allows them to do that. Now, as previously stated, my issue here comes in that their ability to use non-organic hops to subsidize their product means their production costs will be significantly lower, while their profit margins remain apparently greater. That just doesn't seem fair.
With proper substantiation, the USDA has allowed for certain non-organic ingredients to be approved for use in organic-labeled products if the organically grown ingredient is in limited supply, or is not available in appropriate form or quality. Our organic beers have always been in compliance with this allowance. Beginning June 6, the USDA’s National Organic Program requires a more specific review process for any exempted ingredient, and those that pass are added to its regulatory list (7 205 606). As a result, several companies, including Anheuser-Busch, petitioned to have hops added to the list as well as several other products.
Again, I have some understanding here. Apparently the USDA opened this door themselves, if I read this right. I don't fully understand why they would do this, but if they did then it only makes business sense that A-B would do what they can to legally make a product for a market they are entering. I'd love to know more on the background here, but I suspect (as previously alluded to) that there was a fair amount of lobbying involved to have the USDA open this door to begin with.
Recently we learned that the USDA’s National Organic Program’s (NOP) National List of the proposed 38 exempted non-organic ingredients, including hops, have not been posted in the Federal Register yet. Since the deadline passed, Anheuser-Busch has not received any communications from the USDA regarding the reason for the delay and we await further clarification on future requirements on organic ingredients and labeling for our organic beers. We have now begun brewing our nationally available organic beers with 100-percent organic hops, although at this time we have a limited amount of organic hops available. We will continue to be in full compliance with USDA NOP requirements for our organic ingredients and labeling for our organic beers.
So, it seems A-B and the rest of those with stake in this have come to a standstill as the USDA considers further their next step. I read this morning that the USDA has extended the period of time before the registry updates will be made, apparently to allow for more public input. I am happy to hear this and hope that those concerned (on either side of the issue) take a moment to email or call the folks at the USDA.

I admit that I largely represent one side of this argument and that I largely don't understand the other side. That said, I generally don't like to bash Anheuser-Busch, they actually do a lot of good for beer in this country, but this seems completely irresponsible and short sighted. Is it their fault? I suppose not, the USDA should have consumers in mind more than corporate interests, but the gall displayed by A-B's lobbying seems offensive for a consumer like me, and so many others who actually care what they ingest. I hope this issue will covered by more mainstream media outlets, and I hope that A-B does right in the end, but the way it looks I don't see that happening. So, look for A-B to market their USDA certified organic beers soon, sold at a higher price with much higher profit margins than the smaller companies who genuinely care about their product's integrity and who have been serving this niche market for years.

- Rick

What can you do? I suppose the only thing to do is to write your representatives and senators. Ask them how the government can allow this to happen and have them explain in what way it makes sense for the consumers. We know how it will benefit big-business.

Additional Info: I found this in an online petition and think it says pretty clearly what needs to be said.
Hops (Humulus lupulus) should not be included on the National List in such general terms. Only specific low-supply varieties should be listed. Although organic hops is in high demand, there are over a dozen varieties of organic hops available on the market (available in both pellet and whole flower form).

Hops is one of the main ingredients in beer. It is misleading to allow a beverage to be labeled as "organic" when its main ingredient was grown with pesticides and synthetic fertilizers. By including hops on the National List, consumers will not be able to distinguish truly organic beer from a beer with a main ingredient that is conventionally grown.

Also, putting hops on the National List offers unfair advantages to large-scale breweries. There are many micro-breweries now selling truly organic beers (with organic hops). These companies cannot compete with the prices of larger companies stepping into the "organic" beer business, like Budweiser, who will be allowed to use less expensive, conventionally grown hops (non-organic hops costs less than half as much as organic hops). Breweries need to put more effort into developing organic hop resources here in the USA before they try and make organic beer with inorganic hops.

We believe specific varieties of hops that are in well documented low supply on an organic level could be listed here, but including all varieties of hops on the National List is unnecessary and harmful to organic hops producers.
Petition link & additional info found here: