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Architects of the Future: Taiwan's Startup Stories

Taiwan’s Craft Beer Industry in Search of a Local Identity

2020/02/26 ,

Interview

Jeremy Van der Haegen

Photo Credit: Jeremy Van der Haegen

Jeremy Van der Haegen

Jeremy is a Belgian journalism student interning for The News Lens in Taipei.

What you need to know

Taiwan's burgeoning craft beer scene has come a long way since independent brewing was legalized in 2002. However, the breweries have wildly different ideas about using local ingredients and what makes a Taiwanese craft beer Taiwanese.

Anyone wandering into the trendy dive bars around Taipei would notice the variety of local craft beers adorning the menus. Visitors and locals alike are drawn to the colorful labels and diverse, regional flavors.

Taiwan’s microbrewery scene flourished after a substantial series of alcohol deregulations in 2002 ended the government’s monopoly of beer production. The U.S. Foreign Agricultural Service estimated that Taiwan’s craft beer consumption, although small in the overall market share, has an annual growth of 20 percent. Although rising in popularity, Taiwan’s craft beers are still facing fierce competition from commercial brews, imported beers, wine, and spirits like whiskey. 

“Craft beer is still very small in Taiwan. The craft beer consumption only makes up around 1 to 3 percent of the total beer market,” said Dr. Shu Wei Huang, urban sociology professor at the National Taiwan University (NTU). 

Dr. Huang, who thinks beer tells a story about the society it is produced in, has been teaching workshops on craft beer production at NTU to promote the cultural importance of having local brews in an open society. The beer brewing process serves a multifaceted map of society, connecting its agricultural, transport, processing, and retail sectors, as well as its distinct leisure and culinary culture.

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Photo Credit: Jaskaran Singh
Sunmai beers can be found in Taiwan's convenience stores.

Sunmai: the challenge to meet growing demands

Craft beer is defined by the American Brewers Association as being produced by a small and independent brewer in a historic but unique style. Other key elements include the emphasis on innovation and the use of both traditional and non-traditional ingredients.

One of Taiwan’s biggest craft beer breweries, Sunmai, struck a delicate balance between local and imported ingredients. Its selection of beer is now available in restaurants overseas, and it was the first Taiwanese craft beer brand to be sold in local convenience stores. 

Malted barley and hops are two of the four key elements in the beer brewing process alongside water and yeast. Malt allows for beer fermentation and it is responsible for most of the beer flavor, while most hops release bitter-tasting oils and acids that are used to balance out the sweetness of the malt, or to add a poignant citrus flavor in the case of aroma hops. 

Sunmai imports malted barley and hops from places like Australia or Germany. However, the company is seeking to keep a hint of Taiwanese flavor in its drafts. One of Sunmai’s master brewers, Marcie Chan, carefully studied the malted wheat-heavy southern German brewing technique, while keeping a close eye on untapped local ingredients. She designed Sunmai’s flagship beer, the honey lager, which blends German malt with Taiwanese Longan honey to create a luscious aftertaste. Sunmai also brews a seasonal pinkish strawberry ale, made with local strawberries.

Despite Sunmai’s rapid growth, the local ingredient suppliers might struggle to catch up. The brewery hinted it might soon need another honey supplier to meet its production demands. The Taiwan Tobacco and Liquor Corporation (TTL), a state-owned brewer, ran into similar problems when trying to meet demands for its wildly popular fruit beers. The local fruit farmers could only deliver 60 percent of the orders, and TTL had to turn the beers into seasonal products due to short supply.

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Photo Credit: Courtesy of Sunmai
A glimpse into Sunmai's brewery located in New Taipei City.

Sunmai has minimized its reliance on local agriculture and managed to grow into a leader in Taiwan’s microbrewery scene. Its fermentation facility is several times the size of similarly aged foreign counterparts, with a bigger domestic market share for craft beer. Australian microbreweries such as Stockade Brew and The Craft kicked off the same year as Sunmai in 2016 but haven’t seen the same production growth.

According to Sunmai’s brewing philosophy, contemporary Taiwan is molded by many influences from Asia and the cultural diversity should be reflected in its craft beer. Sunmai does not shy away from cooperating with other Asian brewers. Together with Japanese craft beer producer Coedo, they created the Shanjiao Kumquat Ale, a nod to the Taiwanese village that supplied the fruits, while the other ingredients are from Japan. 

For a popular brand like Sunmai, using imported ingredients is more practical than relying on local farmers who might not offer the same production capacity. But as an industry leader in Taiwan, Sunmai is facing an overarching identity crisis: what makes Taiwanese craft beer Taiwanese then?

Alechemist: keeping all production at home

Some microbreweries in Taiwan insist on using local ingredients regardless of the challenges, such as the Taipei-based startup Alechemist. Robert and Kai Chen, the co-founders, started the beer company five years ago with a clear focus on domestic agriculture. Robert, 37, a former employee of San Diego’s craft beer phenomena AleSmith, was particularly keen on restoring barley as a domestic crop to keep the entire supply chain in Taiwan.

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Photo Credit: Jeremy Van der Haegen
Alechemist's founders Robert Chen (leftmost) and Kai Chen (rightmost)

In the 1920s, Taiwan boasted a large number of brewing facilities under Japan’s Monopoly Bureau. Barley farming in Taiwan was set up during the Japanese occupation in the early 20th century to support beer production. Around six breeds of barley, both local and imported from Japan, were grown on the island. The Japanese left behind expensive equipment and brewing techniques after World War II, and the Taiwan Provincial Monopoly Bureau (now TTL) assumed control of the beer production, spawning the national brand Taiwan Beer in 1946. 

In the 1960s, Taiwan Beer gradually replaced malted barley with the Ponlai rice (蓬萊米), also known as Formosa rice, because of its abundant and affordable supply. Ponlai rice also gave Taiwan Beer its distinctively sweet flavor. By the ‘90s, barley prices plummeted due to the increase of global trade, and the local barley production was all but vanished in Taiwan.

Robert acquired barley seeds from NTU’s agricultural research center in 2015 and started his own patch at the university campus. He woke every day at 5:30 a.m. to care for the crops and he harvested them manually, yet the micro patch only delivered a few kilograms of barley, barely enough for one or two cases of beer. Determined to revive Taiwanese barley farming, the Alechemist founders acquired a field of 5 acres in Taichung, collaborating with a farmer to manage the operation.

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Photo Credit: Courtesy of Alechemist
The barley field in Taichung that supplies Alechemist is currently 5 acres.

“It took us five years to just have a commercial production of barley,” Robert said.

Although Alechemist made significant progress in keeping the entire cycle of beer production home, the next challenge is already at its doorstep. The malting process of barley has disappeared from Taiwan when the farming ceased three decades ago. Alechemist currently contracts an external company to germinate the barley, a “sloppy solution” that requires too much back-and-forth delivery, Robert said. 

It might not even be possible to consistently farm all the required ingredients. Taiwan’s subtropical and sometimes turbulent climate is far from optimal for frequently harvesting the necessary hops and grains, according to Dr. Huang. Alechemist already experienced this first hand with its unsteady barley gains, after a less than successful harvest last year due to extreme weather changes.

The entrepreneurs have sought government funding multiple times to invigorate the malting industry to no avail. The Council of Agriculture (COA) declined on the grounds that there would not be enough economic activity to warrant funding a malting industry. 

“There's hardly any stimulation of new industries here. I feel like Taiwan is known for its short-sighted agricultural policies,” Robert said.

Funding a malting industry may not be a priority for the COA, but it has been promoting local agricultural products with promotions like the Kaohsiung Lychee Beer Festival. TTL, the national brewer, has made attempts to incentivize local craft beer producers on a small scale. Its limited edition Red Quinoa Ale, which sources ingredients from indigenous Taiwanese in Taitung, won silver in the specialty beer category at the 2019 World Beer Awards.

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Photo Credit: The News Lens
TTL's Red Quinoa Ale, which uses local ingredients from indigenous Taiwanese, won silver in the specialty beer category at the 2019 World Beer Awards.

In pursuit of a Taiwanese classic

Since the late ‘80s, Taiwanese business owners had been moving operations and investments overseas due to the increasing labor and land costs. It was not until 2019 when more Taiwanese firms started bringing their capital home under the pressure of the U.S.-China trade war and the government’s reshoring initiatives. 

But for craft beer, something so intrinsically tied to a region’s domestic agriculture and taste, is an industry that relies on Taiwan’s geographical advantage. With the island’s abundance of tropical fruits like longan, dark plum, and mango, the breweries are able to create a variety of distinct flavors and aroma specific to Taiwan. The challenge, however, remains in the insufficient supply for the growing demand.

Alechemist and Sunmai are both trying to create a “Taiwanese classic” in their respective ways. While Sunmai tries to position itself as an industry leader by honing its brewing prowess and cleverly utilizing imported ingredients, Alechemist is trying to root all of its production in Taiwan.

“No matter who buys us in the future, or where we move, our beer will always require the local Taiwanese ingredients and flavor,” Robert said.


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TNL Editor: Daphne K. Lee (@thenewslensintl)

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