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Sales of Organic Beers Are Quickly Gaining

The market for brews mostly free of chemicals and pesticides grew 40% last year. Anheuser-Bush is test marketing two such products.

July 16, 2006|Clarke Canfield | The Associated Press

PORTLAND, Maine — Organic ales, lagers and pilsners are increasingly squeezing their way into retail coolers alongside non-organic beers.

When Jon Cadoux launched his line of ales under the Peak Organic label this spring, he figured making them organic would distinguish them from the multitude of other beers on the market. At the same time, he wanted to put out a product that he believes is healthier for people and the planet.

Cadoux, founder of Peak Organic Brewing Co., says people are embracing organic foods as they become more educated about what they put into their bodies. He views his organic beer, which is brewed in Portland, as a step back to the past.

"Organic is not a new movement," said Cadoux, who is based in Burlington, Mass. "Our grandparents grew up eating organic foods, although it wasn't called that."

While organic beer sales are still minuscule compared with the overall beer industry, they are rising fast. North American sales of organic beer grew from $9 million in 2003 to $19 million in 2005, according to the Organic Trade Assn.

Organic beer sales increased 40% in 2005, tying it with organic coffee as the fastest-growing organic beverage, the Organic Trade Assn. says. By comparison, overall U.S. beer sales fell slightly last year.

Organic beer has even drawn the attention of the nation's largest beer company, Anheuser-Busch, which is producing and test marketing two organic brews: Wild Hop lager and Stone Mill pale ale.

Northern California's Butte Creek Brewing Co., based in Chico, sells its organic beers in about 25 states, up from half a dozen states five years ago, said Scott Burchell, national sales manager.

Under U.S. Department of Agriculture standards, at least 95% of an organic beer's ingredients -- usually barley and hops -- must be grown without the use of chemicals or pesticides.

Not long ago, organics products that were mostly limited to vegetables, milk and bread, Burchell said. But organic products of all types, including beer, are now widely available at natural food retailers such as Whole Foods Market and Wild Oats, and in mainstream supermarkets with organic and natural food sections.

At a Wild Oats store in Portland, for instance, customers can choose from six- and 12-packs of assorted Peak, Wolaver's and Butte Creek organic beers.

"The interest level in the past year has grown so that we don't have to pound on doors to sell our product," Burchell said. "Now we're getting phone calls from out-of-state buyers wanting our product."

Anheuser-Busch launched its organic beers in March and April in several test markets. You won't find the Budweiser name on the bottles; instead, the Wild Hop packaging says Green Valley Brewing Co. and the Stone Mill labels say Crooked Creek Brewing Co.

Wild Hop is brewed at the Anheuser-Busch brewery in Fairfield, Calif., and Stone Mill is produced at the Red Hook brewery in Portsmouth, N.H.

Ronnie Cummins, national director of the Organic Consumers Assn. in Minnesota, first saw Anheuser-Busch's organic beers at an organic product trade show in Chicago in May.

Anheuser-Busch's stab into the organic market will introduce a broader audience to organic products, Cummins said.

At the same time, there are concerns any time a large corporation enters the market that it could exert pressure to lower the standards for organic products and industrialize production, he said.

But Anheuser-Busch's decision to launch organic beers "sends a clear message that there's marketability," said Cathy Strange of Whole Foods Markets Inc. "They're a smart company and if they didn't feel that there was a backbone to it, they wouldn't market it."

With or without Anheuser-Busch, the demand for organic beer is likely to continue to grow, said Morgan Wolaver, chief executive of Otter Creek Brewing in Middlebury, Vt., the maker of Wolaver's Organic Ale.

Gone are the days when people considered organic food an overpriced fad for granola-eating crunchies, he said. Nowadays, even McDonald's serves organic coffee. Organic beer, meanwhile, costs about the same as other specialty or import beers.

"The market will continue to grow," Wolaver said. "The generation coming out of college up to age 35 is especially concerned with what's around them. They realize that they have power with how we spend our money."

For Cadoux, his business combines his love of beer making with his interest in the environment. But he realizes that people won't buy a product simply because it's organic; it has to taste good, too.

"Our biggest goal," he said, "is to try to let people know that organic products in general, and more specifically organic beer, are delicious."

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