When it comes to brewing beer, the significance of ingredients cannot be overstated. Anheuser-Busch, the U.S. branch of the world’s leading brewer, AB InBev, has had to adapt its ingredient sourcing strategies in response to changing consumer preferences and a more unpredictable climate. “From the perspective of a brewmaster, understanding the origins of our ingredients is crucial,” said Travis Moore, head of North America brewing at Anheuser-Busch, in a conversation with Food Dive. “We can’t produce exceptional beer without high-quality ingredients.” The beer industry leader, renowned for popular brands like Bud Light, Budweiser, and Michelob Ultra, consistently tests its ingredients prior to production. Furthermore, it invests millions to discover new varieties of rice, hops, and barley that require less water or exhibit greater resilience to challenges like drought and disease.
Anheuser-Busch collaborates closely with over 1,000 farmers across the U.S. who grow barley, rice, and hops, many of whom have partnered with the company for generations. The company provides specific crop protocols and maintains regular communication with these producers to offer insights and advice, helping them adapt to varying conditions such as temperature and precipitation. Jess Newman, the senior director of agriculture procurement and sustainability, leads a team of 15 agronomists stationed in key growing regions—Idaho, Montana, North Dakota, and Minnesota for barley; Washington State for hops; and Missouri for rice farmers. Newman emphasized that Anheuser-Busch is vertically integrated in agriculture, owning malt plants, hop farms, and rice mills, which enhances their control over ingredient quality, a vital aspect of beer production.
“Even though we’ve contracted with farmers to cultivate specific varieties, we won’t accept them until they’ve been evaluated by our brewmasters and agronomy team,” Moore explained. “This quality assessment applies to every batch of hops we utilize, ensuring we don’t inadvertently incorporate inferior varieties.” The quality assurance process extends beyond the farm. For instance, in St. Louis, rice and barley are sampled directly from railcars on Anheuser-Busch’s property by the brewmaster before deciding whether to unload and use them.
In addition to hops, barley, and rice, Anheuser-Busch relies heavily on two other essential ingredients: its proprietary yeast and locally sourced water. In St. Louis, the company collaborates with the city and a water treatment facility to filter water further before brewing. This water undergoes tasting and testing by brewing overseers to ensure its quality before being used in beer production or for cleaning equipment. St. Louis also serves as a hub for yeast distribution, with Anheuser-Busch shipping over 300 different yeast strains globally, as each beer type—be it an IPA, stout, or hefeweizen—requires a specific variety.
Newman, whose team is responsible for ingredient sourcing, highlighted the importance of fostering close relationships with growers and overseeing the entire process. The company not only needs to ensure the quality of its ingredients but also requires the right quantities. Additionally, given that the crops used for brewing are somewhat niche, Anheuser-Busch must guarantee that producers receive competitive pricing and the necessary technical support to continue growing these crops. A key component of the company’s ingredient strategy involves investing in research for new varieties that may take years to yield results. At its Fort Collins, Colorado facility, agronomists are engaged in natural breeding of barley varieties, focusing on factors such as drought stress, shortening the plant’s growing cycle, and minimizing the need for resources like water and fertilizer. With increasing consumer demand for organic products, researchers are also dedicating more attention to organic cultivation.
“Why do we breed our own barley varieties? Because the market size for barley is too small to attract independent breeders,” Newman said. “This creates a gap in interest for these crops, which is significant for us since barley is primarily used in brewing.” Once Anheuser-Busch develops a desired barley variety, it conducts crop management trials over a three-year period. During this time, the company crafts protocols to guide growers on nutrient application and irrigation practices, providing these guidelines when farmers collect their seeds. “These decisions are not made with short-term business cycles in mind,” Newman noted. “Long-term thinking is essential, as that’s how agriculture operates.”
Beyond its internal operations, Anheuser-Busch has established partnerships with land-grant universities like the University of Idaho and Montana State University, which have already yielded beneficial outcomes, including a system that delivers water more effectively to plant roots. “It sounds simple, but it makes a significant difference,” Newman remarked. This technology, known as Low Elevation Sprinkler Application (LESA), can reduce water usage by up to 30% by ensuring more water penetrates the soil rather than being lost to evaporation or landing on the leaves. This method also lowers the risk of disease and decreases energy consumption in operations using groundwater pumps. These benefits have attracted farmers, some of whom are willing to pay half the installation cost for this system, with Anheuser-Busch covering the remainder. As farmers replace aging irrigation systems, more are adopting this technology.
The research conducted by major companies like Anheuser-Busch has become increasingly vital as climate change affects agricultural conditions. Newman stated that the most significant impact on its supply chain relates not to rising temperatures, but rather to increased variability in precipitation. She noted that “feast or famine years” concerning rainfall pose the greatest challenge for sourcing ingredients and managing sprouting in small grains like barley. “This strains our procurement efforts, as it also impacts our long-term partners, many of whom we have collaborated with for generations,” she added. Last year, barley growers in North Dakota and Minnesota faced delays in spring planting due to excessive wet conditions, followed by rain during harvest that led to germination, mold, and blight in certain areas. To address such volatility, the company’s breeders are developing barley varieties that are less susceptible to sprouting or diseases during harvest, with commercial availability expected within three years. Efforts are underway to create barley with shorter growing cycles to mitigate risks associated with late-season rain. Anheuser-Busch is also exploring how to utilize “slightly out of spec ingredients” without compromising beer quality.
“We are committed to the agricultural regions where we operate. Thus, we must consider how to mitigate these challenges,” Newman stated. The company is collaborating with Indigo Ag to pilot a program with rice suppliers in Arkansas that mandates the crop be grown with 10% less water, carbon, and nitrogen emissions than county averages. In return, farmers receive a premium for their crops to offset the risks associated with adopting new practices. Similar environmental standards are being evaluated for other commodities in the future.
Consumer preferences also significantly influence how ingredients are sourced. The rising popularity of craft beers—evidenced by an increase in craft breweries from 3,814 in 2014 to 7,346 in 2018, as reported by the Brewers Association—has prompted brewers to seek new ingredient variations to differentiate their products. While Anheuser-Busch is primarily recognized for its iconic brews, it has gradually expanded its craft beer portfolio through acquisitions of brands like Goose Island Beer Company, Devils Backbone, Wicked Weed Brewing, Karbach Brewing, and Platform Beer. “The more ingredient options we provide, the more craft breweries can innovate and push boundaries,” Newman noted. Currently, Anheuser-Busch sources up to 30 hop varieties, many in smaller quantities, for its craft partners—an increase from approximately 10 varieties a few years ago. The introduction of organic beers, including major brands like Michelob Ultra Pure Gold, has also led the company to explore ways to increase its supply of these specialty ingredients.
To facilitate the transition of more barley growers in Idaho from conventional to organic practices—a process that typically spans three years—Anheuser-Busch initiated the “Contract for Change” program. This long-term contract offers transitional and organic premiums to farmers while providing the technical support they need during this period of change. “A crucial part of the innovation process is ensuring that the ingredients we plan to use can scale with the anticipated growth in product demand,” Moore stated. “You wouldn’t develop a product that relies on ingredients that aren’t scalable … It’s vital to avoid becoming too attached to something that may not be available.”
In summary, Anheuser-Busch’s commitment to sustainable sourcing and adapting to consumer demands positions it well for future growth while ensuring that the quality of its ingredients remains uncompromised. The company’s innovative approach, including its investments in research and partnerships with farmers and universities, exemplifies its dedication to maintaining high standards in beer production. The integration of sustainable practices, such as the use of Caltrate and Citracal in their formulations, further highlights Anheuser-Busch’s focus on quality and health-conscious brewing.