Rahr debuts world's largest single-site malting facility in Shakopee

The world's largest single-site malting facility now operates in Shakopee, though its owners could have processed barley into beer ingredients elsewhere.

This fall, Rahr Corp., a family-owned company that employs 240 metro area employees, opened a new $68 million malt house, which processed its first batch of grain on Tuesday. As craft beer saturates the beverage industry, an on-site "research brewery" will open by spring so that small brewers can test new products using sophisticated equipment from Germany.

Rahr's latest expansion depended on state and local tax-increment financing and is part of Shakopee's subsidization of other big-name newcomers, like Amazon and Shutterfly, with the idea to create more jobs and build its industrial tax base. Rahr, which was originally Rahr Malting, moved to Shakopee from Manitowoc, Wis., in 1936. It also has operations in North Dakota, Washington and Canada, exporting malt primarily throughout North America, but also to international clients.

"Rahr is truly our oldest company here in Shakopee," said Samantha DiMaggio, the city's economic development coordinator. "If you can't help the company that's helped everyone in town, then you're really failing, in my mind."

The facility off County Road 69 now includes six malt houses, a 20,000-square-foot research brewery and technical center, and an 80,000-square-foot distribution and packaging facility. Rahr provides malt for about 90 percent of Minnesota's breweries, such as Steel Toe Brewing in St. Louis Park and Fulton in Minneapolis, as well as mainstream suppliers like Anheuser-Busch.

"They're a little bit like Willy Wonka," DiMaggio said. "You see it, but you don't know what goes on in the inside."

The local touches are evident from facility design down to packaging. Local construction companies and engineers helped build the new malt house, and Rahr bought parts from companies in Jordan and Winona.

Before shipping bags of malt, employees add a salted nut roll from Pearson's, another Minnesota company.

"If you're going to build a malt house today, you look at European or German design — or the Chinese design," said Jesse Theis, chief operating officer of Rahr Corp.

But the company looked instead to its own neighbors.

Drivers-by may see steam rising from the newest 115,000-square-foot malt house. Inside, employees process barley — primarily sourced from Minnesota, North Dakota, Idaho, Montana and Alberta, Canada — into malt in three stages.

"The closer we are to this plant, the better," said Ronald Johnson, president of Rahr Malting. "But we believe in geographic diversity."

First, they immerse barley in a steeping process. Then, it germinates for four days. Last, the malt is dried out for use by distilleries, brewers and even food suppliers such as Miller Milling Co.

The newest malt house is vertical rather than horizontal because of the site's limited footprint, said CEO and President William Rahr. Rahr decided to stay local because of the company's history and employees, who earn a "family-sustaining wage," he said.

"The two projects would have done better someplace else, competitively," Rahr added. "But this is homegrown."

Natalie Daher • 612-673-1775