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Courtesy / Blue Ox Malthouse
New equipment is brought into the expanded Blue Ox facility, slated for completion in early 2024.
Blue Ox Malthouse, said to be one of few U.S. malt suppliers that practices a traditional "floor-malting" process, has construction underway to expand its Lisbon facility.
Blue Ox supplies malt to roughly 120 producers, primarily in the craft beer industry and increasingly in the craft distilling industry. It also has several baking clients.
To date, Blue Ox has been a tenant occupying 7,500 square feet at 41 Capital Ave.
The company is now expanding into the entire 20,000-square-foot industrial building, on 2.2 acres, which it bought a year ago from Allen Properties LLC for an undisclosed price.
Mandy Reynolds of Magnusson Balfour Commercial Brokers|Keller Williams Realty and John Pavan of Pavan Enterprises LLC brokered the deal.
The property is in the Lisbon Industrial Park.
Floor malting is a centuries-old method in which the germination step of malting occurs on a tiled or, in modern times, concrete floor and is manually raked. Compared with mechanized, automated systems that might be more efficient, floor malting is considered gentle on the grain, producing a high-quality, consistent product.
Construction that’s now underway for the expansion will triple the operation’s malting floor space and quadruple its processing capacity.
“After 10 years of being on the scene, Blue Ox Malthouse is undertaking this step to connect farms to locally produced beers and spirits in the Northeast region,” said Blue Ox founder Joel Alex. “Enriching our business with more capacity and improved equipment helps us stay niche and devoted to our mission of provide opportunities for breweries and farms to create meaningful collaborations.”
Alex claims the facility as “the world’s most sophisticated floor-malting system.”
“Malting is all about controlling moisture and temperature — whether you're adding or removing it — across the steps of malting,” he said.
Malting is a process of soaking grain, letting it grow and then baking it down. The steps are called “steeping,” “germination” and “kilning.”
In the traditional floor-malting method, Blue Ox does the germination step on a floor while also applying modern methods of precise temperature and moisture controls across every aspect of production.
“We're also developing a proprietary controls system that will automatically assist our maltsters in adjusting for seasonal temperature and humidity variations bringing additional consistency to our process,” he said.
To date, Blue Ox has been processing about 1 million pounds of grain annually through its existing facility.
When the expansion is completed, the upgrade will include two malting floors totaling nearly 8,000 square feet, adding more than three times that capacity on top of the existing system. Alex estimated the new system at full capacity would process in the ballpark of 5 million pounds of grain annually, using grain coming entirely from Maine and the Northeast.
The expansion is expected to help ease supply chain difficulties that Northeastern craft breweries and distilleries experience by allowing for more robust resilient supply options, Alex said.
It’s also expected to allow the malthouse to offer a more diverse lineup of malt products and work with a wider array of small farms.
Alex said he expects to hire more staff of diverse physical abilities.
Blue Ox was founded as a link between Northeastern agriculture operations and makers of craft beer and artisanal spirits, Alex said.
Completion of the expansion is slated for early 2024.
Alex said he and his team plan to invite the community to tour the malthouse once the expansion is completed.
Alex founded Blue Ox in 2013 with the goal of fostering relationships between farmers, brewers and other food producers.
Malt, made from grains like barley, is a key ingredient in craft beer recipes.
In January 2014, with 2 tons of grain from Aroostook County, Alex processed his first pilot batch of malts in Belfast.
A year later, he moved Blue Ox to Lisbon and began full malt production.
When the Lisbon location opened in 2015, it was the largest of only a few floor-malting operations in North America, Alex said.
The construction cost of the project hasn’t been finalized yet, Alex told Mainebiz.
“Of the funds that we have dispersed so far, the project costs are roughly evenly split between building and construction costs, including the purchase of the building, and new equipment investments,” he said. “By the end of the project, we anticipate investing close to $2.5 million in new equipment to support two new malting floors, each two times larger than our existing germination floor.”
Financing for the project includes investment by Blue Ox and other private investors and loans from Androscoggin Bank and Walden Mutual Bank.
Equipment financing includes a U.S. Small Business Administration 504 loan, which provides favorable terms for certain commercial projects, and public economic development funds including a $500,000 grant from the state’s Agricultural Infrastructure Investment Program.
Blue Ox supplies malt to roughly 120 producers, primarily in the craft beer industry and increasingly in the craft distilling industry. It also has several baking clients.
“The majority of these beverage businesses are based in Maine,” Alex said. “However, we increasingly are seeing demand for our projects elsewhere in the Northeast, with regular customers as far away as Long Island, N.Y though we reliably ship malt a few times a year as far away as Florida, or even California.”
The expansion is expected to ease supply chain difficulties that Northeastern craft breweries and distilleries experience.
“Building more processing infrastructure here in our community and region solves several issues on our customer side,” Alex said.
Increasingly, he said, geopolitics and global supply chain pressures are resulting in grain supply becoming less secure and increasing the cost of moving grain ingredients.
“By sourcing local and being local, we are providing a more reliable and available supply of ingredients close to home,” Alex said. “Many of our customers pick up directly at the malthouse for example, and our grain contracts are insulated from global commodity markets.”
Alex said he’s witnessed an increasing consolidation in large malting operations, and his customers are reporting issues with support by large suppliers.
“We are better suited to be a hands-on partner with our customers and help them achieve their goals,” he said.
Additionally, he said, the traditional floor-malting process provide a marketing distinction for his customers.
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