How a DoST loan and making their own malt helped a small brewery through the effects of the Ukraine-Russia war

WE met James Gatlabayan, head brewer for Santiago Brewery and Malthouse, while doing something naughty.

During last month’s Beer Fiesta (see the related story: https://www.bworldonline.com/arts-and-leisure/2023/06/29/531231/a-diversity-of-beer-flavors/), he was urging people to drink out of a beer bong, a favorite frat party pastime. Still, despite the beer being delivered down our throats with speed, we found it to be quite good, and asked for a round of the refreshing Amihan (this time in a glass).  Mr. Gatlabayan makes his own beer — but also his own malts.

While Santiago only truly kicked off in 2017, Mr. Gatlabayan has been making beer at home since 2014.

Santiago Brewery and Malthouse sell beer in bottles online, but the bulk of their sales comes from serving as a mobile bar in the wedding industry. Mr. Gatlabayan claims to be the only malthouse in Southeast Asia (though we found another in Vietnam). Still, he might be the only one in the Philippines, and due to some help from the Department of Science and Technology (DoST), he has increased their yield from three kilograms to 300 kilograms per week: enough to flavor 5,000 bottles of beer.

But what is malt? Beer is made from brewing and fermenting cereal grains, with malted barley as one of them. Malt, according to Mr. Gatlabayan, is made of grains that have been allowed to germinate. The germination process converts starch to maltose, the main sugar that goes into beer (and thus becomes fermented to turn into alcohol). “At the time that I started, there were no suppliers for malt and hops,” he said. “I had no choice but to find out.”

While malted barley is the most popular grain choice, he said, “It’s just that barley is the easiest to turn into malt.” He said that the whole process takes between four to five days. He also showed us his own do-it-yourself (DIY) equipment from his early days, such as a cooler and his own home oven — he now has better equipment, including a modified coffee roaster used to dry the grains. He learned that one can make malt from any type of grain: even from rice (specifically in its palay seed form) which is abundant in the Philippines. That, however, takes some time, with palay turning into malt in between 10 to 12 days compared to barley’s four to five. Other grains he had experimented with include oats, sorghum, and wheat.

“It’s harder to brew,” he admits, when asked about the advantages of making his own malts, instead of buying them. “But if you’re going to use the same type of malts, everybody will have the same taste of beer.” Besides, commercial malts can cost P80 and more per kilogram, and by making his own, he only has to spend P35. “Ang laki ng cost savings  if I supply my own. Even though it’s harder to brew — I know my malts. I can adjust to it.”

Thanks to making his own malt, he and his customers can become impervious to supply chain disruptions. For example, he points to the war between Russia and Ukraine, which cut supplies of malt to the country. According to him, a lot of the microbrewers here could not make their own beer. At that time, he had just developed a malt made from the drier, harder type of maize used to make popcorn, after facing a disappointment when he made a malt out of sweet corn, which, due to the high fat content, gave the beer a strange texture and a weak head (that is, it didn’t foam up enough). The popcorn maize-malt saved the day for himself and the other brewers, until supplies had been stabilized. “Magka-guerra man, we will always have beer,” he said.

Mr. Gatlabayan benefits from a zero-interest loan he took from the DoST that helps small businesses like his scale up their operations. “They’re really looking for backyard businesses that want to professionalize.” The loan, which took five years to pay and had a one-year grace period, was what helped him get all of his equipment to increase his yield. “You can’t get that from any bank,” he said. To other small business owners, he says, “They need to be proactive. They need to reach out to their local, regional DTI (Department of Trade and Industry) or DoST offices.”

Contact Santiago Brewery through instagram.com/santiago.brewery or facebook.com/santiagobrewery. — Joseph L. Garcia