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At White Labs we thank you for an exciting 2006 and we look forward to continued growth and improvement in the new year. The last 12 months was a time of growth for us and our customers. As I have explained in this space in the past, we increased our expansion by 30 percent. We accomplished this by adding a new clean room and installing German and Czech-made 40-barrel fermentation tanks. These larger tanks with Frings aeration equipment are especially helpful in fulfilling demand for our most popular yeast strains, including WLP001 California Ale Yeast. While many organizations have chronicled the positive growth of craft beer in the United States over the past year, the year 2006 also saw significant growth in microbreweries and brewpubs outside of the U.S. In some ways it mirrors the growth of craft beer in the U.S. 10 years ago. Like what happened in the United States, other countries are removing some of the legal impediments to small brewers. In many cases they are turning to the United States for their ingredients, thanks to the positive examples set by craft brewers here. We are excited to be helping fulfill the demand for brewer’s yeast in these countries, and we now ship yeast to well over 30 countries. We will have a chance to see much of this growth first-hand in the coming year and talk with some of the people who are at the forefront of these world-wide movements. Our travel plans include visits to Asia, Canada, Europe and South America in the coming year. In the United States, meanwhile, it is safe to say that those who thought the craft beer movement was dying were wrong. Many in the past were ready to write off the business because of the many closures. Like any business, however, there are ups and downs in beer, and we are seeing a surge once again in the craft beer segment. Brewers were simply too stubborn to give up. Their dedication has helped bring better beer to people not just in the U.S. but, as I explained above, to people around the world. One reason some breweries grew slowly at the beginning was because it takes time to change palates. If breweries can stay open long enough they can change the tastes of their customers. Once people get accustomed to fuller flavor beers, there is no turning back time. Many of these brewers are experimenting with various yeast strains, and by using a variety of strains they are bringing a greater range of flavors to their beers. We will be traveling to festivals and beer gatherings around the country in 2007. And I am sure we will meet many happy brewers – and beer fans – along the way. Over the course of the next year we also hope to help breweries expand their quality control, or QC, programs. We hope that all breweries, even the smallest ones, will institute regular QC procedures. To this end we are introducing the first "Big QC Day" at White Labs in February. We are inviting breweries to send in two samples of beer and we will put these samples through a variety of tests. If these were done on an individual basis, the cost could be near $500; because we are doing all these tests at one time we can offer the service for under $100. It is somewhat similar to what we do with yeast cultures – by growing the strains for multiple clients at one time we can sell the yeast at a lower cost to our customers. This is why growing private strains costs more than our regular yeast offerings. For more on the Big QC Day, read the story that begins on Page One. We are very interested in finding out how the beers test in a variety of categories. Often times when a brewer sends samples to us, it because there is a problem with the beer. Hopefully a great number of our clients will participate in the testing so we can get a picture of craft beer in general. Based on what we are seeing in the U.S. and the
world, I have a feeling that many beers will test very well. |
Letter
from the President: