Australia’s GrainCorp to Double U.S. Malt Output to Capitalize on Craft Beer Boom

Australia’s GrainCorp announced it is investing $75 million to nearly double production capacity at its Great Western Malting facility in Pocatello, Idaho from 120,000 tons to 220,000 tons per year, to capitalize on the booming North America craft beer industry. Production capacity expansion is scheduled to begin in the third quarter of 2015 and should be complete by June 2017.

The planned expansion follows closely upon the company’s announcement that it will be working to diversify its business internationally in order to hedge against the damage that the impending El Niño weather system could bring Australia’s wheat crop.

Popularity of craft beers, produced by small, local breweries (and which requires larger amounts of malting barley to produce than traditional beers), has grown rapidly in the U.S. In recent years, annual sales growth has been between 10% and 15%, with sales increasing by 22% in 2014, reaching a value of nearly $20 billion. In 2014, craft beer accounted for almost 20% of all beer sold in the country, according to the U.S. Brewer’s Association.

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