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Agribusiness Insider Only News Sussex County

As craft beer grows, so too does Laurel’s Proximity Malt

Katie Tabeling

A Brewing Industry

Founded in Milwaukee, Proximity Malt decided to expand out to the East Coast by buying out the former Laurel Grain Company in 2015. In the six years since, Mid-Atlantic Regional Manager Vic McGary said the malthouse business is “growing like a weed.” | PHOTO BY MARIA DEFORREST

LAUREL On a hot day on a dusty manufacturing site, the air at Proximity Malt was slightly sweet with a touch of bitterness, almost like freshly-made salted caramel or honey. 

But that scent could change, given the day of the week and what grains Delmarva farmers bring in for the company to malt or roast for scores of breweries along the East Coast.

“The funny thing is, people assume I love Indian pale ales because I love the smell of hops and barley,” said Vic McGary, the Mid-Atlantic regional manager for Proximity Malt. “I love touching hops, and when I used to be in the field, my nose used to be yellow from the lupulin because I loved how they smelled. But I don’t like them in my beer.”

In 2018, Proximity Malt opened the doors of its Laurel plant, a short drive from Route 13 and surrounded by farmland. Proximity Malt CEO Dale West and his partners founded the company in 2015 in Milwaukee, Wis., after seeing large multinational brewers focus on certain malts, which exploded seed demand.

To diversify the grain source and make the rising craft beer industry turn to American-made products with local malted barley, Proximity Malt was born. After renovating the old Laurel Grain Co. facility, it can malt and ship 25,000 tons of malted grain per year with more than 20 employees. The renovations, including a new grain transfer system and raw storage facility, was financed with the help of $1.7 million in state grants.

Proximity started working with heirloom European varieties to help identify what types of barley was abandoned by big beers, according to Beer & Brewing. From there, the company started sourcing with farmers who double-crop, or those who concurrently plant feed for livestock. In 2020, Delaware farmers harvested 15,000 acres of barley, valued at $3.9 million, according to the U.S Department of Agriculture.

As the years passed, Proximity has expanded to offer malts with more varieties to small breweries and more commercially-known names like Dogfish Head. Today, it’s grown with a malthouse and lab in Colorado and landed in Laurel to expand access to the Mid-Atlantic region in terms of customers and farmers.

As it stands today, Proximity Malt works with 25 farmers in Delaware, Maryland, Virginia and southeastern Pennsylvania. The Laurel site can malt or roast hundreds of thousands of pounds of grain in a single batch, from all over the nation and easily package it into 50-pound bags for shipping to brewers.

In early June, McGary overlooked a vat of malting grain, mentally walking through his production notes. The grain that was steeped at 65 degrees was flavia, a winter grain that was grown in southern Delaware.

“It has to start with a quality, raw material from our local farmers. That’s the key,” McGary said. “And the farmers here have adapted very well from feed grain to malting grain. Last year, we got some of the best raw materials we’ve ever seen.”

McGary knows grain. For years he grew hops for Anheuser Busch International in northern Idaho, and later became a maltster at one of their facilities in the southern parts of the state.

Barley grown for feed typically has high levels of protein and high levels of moisture. But for breweries, malted barley ideally has a 12% moisture rate, since it maintains its germination, or sprouting ability that helps convert starch to sugar, much longer. The goal of malting is to stop germination at the right point where most of the starch remains and will later be converted in the ultimate brewing process.

“Our process is controlling what Mother Nature does naturally,” McGary said. “We hydrate the barley at the 40% range, keep it at perfect temperatures and we can control how the grain grows so that it’s ready to sprout.”

Proximity does that by steeping more than a hundred metric tons in pool-size tubs in a malthouse that is kept consistently at 65 degrees. A machine arm shaped like a helix turns the grain, so it’s equally exposed to air and does not harden. 

With the help of five employees, Proximity Malt bags pounds of grain, including this 2,000-pound bag. The hope is to incorporate robotics in distribution in the next few years. | PHOTO BY MARIA DEFORREST

From there, the water is drained and the malt is left to germinate for up to four days. The malt is later heated in a controlled setting to stop the germination process but also to give it the desired color.

Proximity also roasts malt through a coil roaster system that is the first of its kind in North America. The top-secret machine gently moves the grain through a hyper-controlled heating process compared to drum roasters on the market, giving Proximity an edge to provide flexible products. For example, the malthouse carries three chocolate malts, ranging from pale to dark.

In a sense, Proximity sells the foundation for breweries, the canvas for each one to experiment with new flavors. It sells base malts, or malts that can be used in all styles of beer, or specialty types. Other ranges include oats, wheat, rye and crystal a process that requires taking the germinated malt directly to the roaster to crystallize the sugars and starches.

McGary said he “grew up and on Anheuser Busch” products like Bud Lite and Michelob, which  used to stock his fridge. But it wasn’t until he started working for Proximity that he started expanding his palate.

“I’m more of a stout drinker these days. But that’s the thing I really love about what I do: you can go to three different breweries, order the same style and see what their take on that style is. You get their flavor and their personality,” he said. “That’s what’s driving this whole industry. People want to get out and experience something different.”

The other ingredient to a quality pint of beer is consistency. For Proximity, that means uniformity of its malting and roasting process.

Quality control starts before a grain is cleaned and steeped. When the farmers truck in barley, Proximity employees take various samples and test it on site for pests and moisture weights. If there’s high moisture or incense, it’s rejected.

That process can repeat for specialty malts. One sample is sent to a diagnostic lab in Colorado through overnight shipping and one test is run on-site, and if the results don’t match up, that could mean the batch is held for a third round of tests. Once it passes, it’s processed through the warehouse and sometimes stored at the nearby Penco complex in Seaford before it makes its way to the customer.

“Everyone on this team, from management to our CEO, have decades of experience on this entire process. It’s pretty much down to a science,” McGary said.

Looking to the future, Proximity Malt has a bright future ahead. 

The worldwide market for specialty malts was valued at $17.6 billion in 2020 and is expected to hit $47.9 billion by 2025, according to an industry report issued by Markets and Markets. Craft breweries in particular are driving that trend, specifically in the last decade. In 2007, there were 1,511 craft breweries and by 2020, that number grew to 8,884, according to the American Brewer Association.

Proximity’s goal is to leverage that growth into more relationships with farmers in the Mid-Atlantic region. When Proximity first started malting, it had to start building new ties to the community from the ground up. In addition to its 25 farmers across the region, the malthouse partners with Vincent Farms to repurpose water drained after the steeping process and Perdue is a frequent grain partner.

“Business is growing like a weed right now, and specifically in Delaware it’s the winter barley that is a great commodity,” McGary said. “It’s fairly easy to malt and you do see that when they can grow two ropes at the same time, and sell that at a premium. That grain is not what we typically see in the Midwest.”

While business is good, Proximity Malt has no plans in the immediate future to expand its site, but there is some thought to renovating it. McGary said the hope is to build an office space that could also relocate its testing operations. Eyes are also set on automating the packaging operations, like the Colorado facilities.

But for now, McGary hopes to continue to build inroads with the farming community, About half of the grain malted at the Proximity’s Laurel facility comes from the Delmarva and southern Pennsylvania, and he’d like it to be 100% soon.

“Farmers adapt, and they’re always thinking of something. We’re definitely in the market for high-quality feed and this area has some of the best barley around,” he said.


By Katie Tabeling


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