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DISTILLERS GRAINS POTENTIAL FOR PROFIT, BUT DUE DILIGENCE REQUIRED WRI TTEN BY KURT A. ROSENTRAT E R , P H . D .

W

hat an exciting time to work in the alcohol industry. Demand for alcohol continues to increase, the number of distilleries continues to grow, and many new, innovative products hit the market every year. But a growing problem that many companies in our industry need to tackle is that of coproducts: the nonfermented materials. Since fermentation of cereal grains consumes the starch, all of the other chemical components (proteins, fats, fibers, minerals, etc.) are left after fermentation, and must be dealt with. Indeed this is a conundrum, especially for smaller distilleries. As discussed in previous articles, the large-scale distilleries and biofuels plants separate these materials, dewater them, and sell them as livestock feed—either in wet or dried form. These are known as distillers grains. Most distillers grains in the U.S. are fed to beef, dairy, swine, and poultry. These approaches could work for your company as well.

POTENTIAL REVENUES Can you really make money selling these coproducts? How much are distillers grains worth? Dried distillers grains are sold in the U.S. for approximately $120-150/ tonne, but this is impacted by domestic demand as well as export demand (primarily the Chinese market). Wet distillers grains will generally sell for about half that of dried distillers grains. Giving away your distillers grains (as many small companies do) is an unfortunate loss of significant income for your distillery. Why are spent/distillers grains valuable coproducts? Primarily because they contain approximately 3x more protein (on a dry basis) compared to the raw cereal grains that go into your mash. This is true for wheat, corn, barley, or any other grain that you use to make your alcohol. Cost, of course, is a key consideration for installing and operating systems for successful utilization of your coproducts. I discussed costs for the dewatering of spent grains in an article last year. Depending on the size of your operation, you might want to consider installing a

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dryer as well. When considering a drying system, capital cost is important, but so are operating costs. One of the largest categories of operating costs for a dryer will be the fuel that is used to evaporate water, so that your wet distillers grain becomes dried distillers grain. Keep in mind that you can install dryers that use either natural gas or propane (electric and steam can be used as well, but are not as common). Natural gas contains approximately 1010 (U.S. average) BTU/ft³, and sells for approximately $15 / 1000 ft³. Propane, on the other hand, contains about 91,000 BTU/gal, and sells for about $2.5/gal. If your dryer is designed to operate between 120-160ºF, then it will take about 1500 BTU to evaporate 1 lb H2O, but if your dryer operates above 160ºF, then it will take approximately 2200 BTU/lb H2O. Depending upon your location, it may not be your choice as to which you are able to use. Normally, natural gas and propane will be less expensive than either electrical drying or steam drying.

MARKETING Another key aspect is marketing. Just because you have coproducts doesn’t necessarily mean that you will be able to get them to livestock producers, or that the producers will demand your products. You will have to actively market your coproducts. Benefits that livestock producers could gain from using your coproducts include better quality protein, more digestible protein and fiber, and the probiotic effects of yeast proteins. Additionally, all nutrients other than starch are concentrated by approximately 3x compared to those found in the raw cereal grains. You must promote your products to sell them—they won’t sell themselves.

FOOD & ANIMAL SAFETY There are other things to keep in mind as well. We are entering an era with an increased emphasis on human food safety, and thus on animal feed safety. After all, feed ultimately becomes food for people (i.e., meat, milk, eggs) when fed to livestock and other food-producing WWW.ARTISANSPIRITMAG.COM

Artisan Spirit: Spring 2018  

The magazine for craft distillers and their fans.

Artisan Spirit: Spring 2018  

The magazine for craft distillers and their fans.