Pony Express rides again

Agricultural cooperative revives Olathe brewery

? Shoppers are used to seeing the “100 percent farmer-owned” label on products in the grocery store, but it’s a strange sight to see on a beer truck.

That phrase is prominent on delivery trucks for Pony Express Brewing Co., the Olathe microbrewery resurrected earlier this year by TransCon AG, an agricultural cooperative with 150 members.

Mike Cook, a member of the Belton-based co-op and brewery operations officer for TransCon, said the organization, formed in May, was looking for products to add value to the crops grown by its members.

“And one of those added-value products was beer,” Cook said.

Year in and year out, Cook said, farmers get about $3 for a bushel of wheat. Holding a bottle of Pony Express Rattlesnake Pale Ale, Cook said, “That same bushel of wheat in this beer is worth roughly $35.”

The Pony Express microbrewery was started in 1995 but closed in mid-2002. Another member of TransCon had been one of the original investors in Pony Express, which is how the co-op was aware of the opportunity.

Cook said he didn’t know of any other U.S. microbrewery that was 100 percent owned by a farm co-op. One of the benefits, he said, is the quality control that comes with using grain provided directly by the growers.

15,000 barrels of beer

Pony Express has the capacity to brew about 15,000 barrels annually. At 13.5 cases per barrel, that’s 202,500 cases of beer, or almost 4.9 million 12-ounce bottles. The area’s big regional brewer, Boulevard Brewing, produced 63,000 barrels last year.

As a microbrewery, Pony Express is part of the craft-beer industry, which also includes brew pubs, regional specialty breweries and contract brewing companies.

Mike Cook, left, executive director, and Stacey Payne, head brewer, stand in front of a bar at the Pony Express Brewing Co. in Olathe. The brewing company is owned by TransCon Ag, a farmer owned cooperative.

In 2002, the craft beer industry brewed up 6.3 million barrels of beer, up 3.4 percent from the previous year. Despite the increase, craft brewers are a drop in the barrel at just over 3 percent of the almost $205 billion in beer sold last year in the United States.

The industry was led by domestic producers such as Anheuser-Busch and Miller Brewing with 85.7 percent of the market, and imports at 11.3 percent.

Pony Express products include Pony Gold and a holiday beer, Blizzard Ale. It is distributed in Missouri and Kansas and sold at Arrowhead and Kauffman stadiums.

Asian opportunity

With the microbrewery industry in the United States starting to level out, Cook said the big opportunities for Pony Express beckoned from China, “and as the first to market in China, we’re able to define what microbrewed beer is.”

As a member of the marketing team for another agricultural concern, NeCo Seeds, Cook has built relationships in Asia over many years, visiting China and other parts of Asia three or four times a year.

In China, Cook said, “you don’t go in green and try to start doing business — you build relationships and then you do business.”

One of the big attractions for China is that Pony Express uses soybeans.

“The U.S. consumer doesn’t really care if soy is in the beer, but it’s a big part of the Chinese diet,” Cook said. “It doesn’t affect the flavor, but it does provide all the attributes soy is known for.”

Because the cost of transporting the beer to China adds so much to the end price, Pony Express is going for a small sliver of China’s upscale market through restaurants and hotels. A Pony Express beer in China would sell for $2 to $3, whereas a bottle of Chinese domestic beer in the countryside might sell for 10 cents.

But it’s an exciting opportunity, Cook said:

“China is a new, emerging market, so people will be more apt to buy something more expensive. We aren’t fully utilizing the brewery, but once we get China on an ordering cycle, we expect to be and are even looking to upgrade our equipment in the near future, which would give us even greater brewing capacity. We think the opportunities in China are tremendous.”