1. Supply and Demand, Ensuring our raw material future together Justin Livengood Inventory Manager BSG Ph: 303.217.8655; E-mail: jlivengood@bsgcraft.com; www.bsgcraft.com

2. In an age of massive brewery expansions, new breweries, and an overall explosion of growth in craft beer comes an increasingly tighter strain on the raw materials needed to support this growth.

3. Ring Ring– Hello favorite supplier – I need ingredients now….. help! This is Mr. Norris, you know, from Make My Day Brewing Company! Our Brewmaster has done it again, and our branding, marketing, and sales folks have pre-sold 500 bbl’s. of a new seasonal that we need to begin brewing ASAP to meet demand.

4. Favorite supplier - I’m sorry but we are all out.

5. Supply Chain 101 Farm (Plan, Grow, Harvest) Distribution (Plan, Source, Buy) Brewery (Plan, Source, Buy) Customer ( Buy…..Drink) Once the actual product is ready for distribution, this process can take anywhere from 2 to16 weeks depending on where the origination point is located.

6. Can supply really dry up? YES Decreased farm acreage Pricing wars with feed and ethanol leading to change in planted crops. Production, malting, and roasting capacity Weather instability Rising populations Unprecedented growth in craft beer

7. What growth? Total bbls produced are actually down 1.64% since 2000. “Beer is considered a mature product so that growth is primarily the result of increased in population” - Agricultural Marketing Resource Center 2013

8. U.S. Brewery Count

9. Growth in U.S. Craft

10. Growth in Worldwide Craft

11. How does this translate to raw materials?

12. Rice

13. Corn

14. Barley

15. Wheat

16. Hop Extract

17. Hops (Dry)

18. Acreage is up but production is down Hops

19. Acreage strung report U.S. Aroma Hops U.S. Alpha Hops 20092010201120122013 20092010201120122013 Ahtanum(D) 176211 Apollo ®747827885874974 Cascade21711850237130395330 Bravo ®335414593528620 Centennial29835782016862233 Chelan(D) 292 Citra ™981132395381278 Chinook38444357212151672 Cluster501392482546682 CTZ114027841710657766317 Crystal(D) 154308 Galena241219201415954450 El Dorado ® - -(D) 96 Magnum(D) 645886 Glacier7061445698 Millennium557555403397381 Golding(D) 263 Nugget28012185229924942047 Liberty(D) 10883131 Simcoe1832374959401264 Mosaic ™ - - -(D)339 Summit ™32863100270027212881 Mt. Hood254250309346247 Super Galena ®10161020123111341213 Northern Brew9294159120145 Warrior ®301296260195183 Palisade ®351373308264152 Perle - -98(D) Sterling1018786(D)122 Tettnanger(D) 7013768 Vanguard -(D) 5976 Willamette51883186167315971104 Other 1/35682844249929231889 Other 1/35682844249929231889 Total Acreage12692960792661172414772 Total Acreage2699221682205222020920269 Source: USDA (D) Withheld to avoid disclosing data for individual operations % acreage aroma42% 1/ Includes data withheld to avoid disclosure of individual operations and varieties not listed % acreage alpha58%

20. Supply VS Demand $$$

21. Barley Acres and Price

22. Wheat Acres and Price

23. How do we move forward and ensure the best possible future for our industry? With communication and planning.

24. Key Challenges

25. Fight For Acreage – Western Canada

26. Ever- increasing number of hop varieties

27. Hop production capacity

28. Malt Roasting Capacity The sooner you can give contracts or projections for the following year the better to secure that roasting space.  Large volume brewers should look into contracting to ensure security of supply.  Small volume brewers should provide projections to ensure supply

29. Heritage Barley Varieties

30. Don’t go at it alone. Together is always better.