Widmer Bros. brewmaster Joe Casey spent five years testing beer recipes his wife and his boss, both gluten-intolerant, could safely drink. And that he could stand to taste.

Soured on sorghum, a frequent substitute for barley, Casey settled on a newer approach. He opted to brew with barley, preserving a traditional beer flavor, and then remove its gluten down the line. After a number of test batches, Casey sent jugs of the beer home to his wife, Sara, and to Terry Michaelson, chief executive of Widmer's parent company,

"I'm still married, and I still have my job," jokes Casey.

Now the trick is to convince federal regulators and gluten-sensitive consumers.

The Obama administration is on the verge of issuing new labeling rules for gluten-free foods, as sales expand across the food and beverage industries like over-fermented ale.

CRAFT BREW ALLIANCE INC.

Headquarters:

North Portland

Brands:

Widmer Bros., Redhook, Kona and Omission

History:

Kurt and Rob Widmer founded Widmer Bros. Brewing in 1984. It formed a joint venture with Woodinville, Wash.-based Redhook Ale Brewery in 2004, and the two merged in 2008 to form Craft Brewers Alliance. It bought Hawaii's Kona Brewing Co. in 2010.

Ownership:

Publicly traded on the Nasdaq Stock Market (Ticker:

). Anheuser-Busch Cos. owns 32 percent of the stock; the Widmer brothers own 14 percent; Columbia Sportswear Co. Chief Executive Tim Boyle owns 2.5 percent.

Net sales:

$169.3 million in 2012, up from $149.2 in 2011

Employees:

740 companywide, including about 225 in Oregon.

The timing is good for

, which could use a new hit product. Portland's largest brewery is grappling with

for its biggest moneymaker,

, and is stirring the political tanks to make sure it will be able to label Casey's new brew, the cleverly named Omission beer, "gluten-free."

Right now, it can't. Last year, federal alcohol regulators barred Craft Brew from calling Omission "gluten-free" outside Oregon, though quixotically it can label the beer that way in Denmark, Canada and within the borders of its home state.

Casey and Michaelson traveled to Washington, D.C., in April to lobby the White House's Office of Management and Budget, where the FDA's rule awaits approval. They persuaded Sen. Ron Wyden to contact the OMB to push Omission's case.

But scientists say it's not clear the beer is safe for gluten-intolerant consumers, particularly those with

, an autoimmune disorder that prevents the small intestine from absorbing nutrients. Craft Brew adds a protein-eating enzyme that attacks the gluten from barley as the beer ferments in stainless steel tanks.

While other gluten-free beers use a base of sorghum, buckwheat or even chestnuts to eliminate barley altogether, Omission's method produces a more traditional-tasting beer. It also, scientists say, leaves tiny gluten fragments behind.

and

, many gluten-intolerant drinkers have thanked Craft Brew for the beer. But some also have reported having unpleasant reactions.

"We've never had a comment like that," said James Neumeister, owner of

, a Portland microbrewery that make only gluten-free beer. "If we did, I'd have to be committed. I'd be a wreck."

Health vs. profits



Craft Brew's full-court press leaves federal regulators balancing the health of a small number of consumers against the moneymaking interests of a politically connected business. In this case, the health of 3 million people with hang celiac in the balance with the nation's ninth-largest brewer fighting to maintain $160 million in annual sales in an increasingly competitive beer market.

Omission is sold with a "gluten-free"ÂÂ label (left) in Oregon and internationally. But in the rest of the nation, U.S. regulators require Omission to be labeled as "ÂÂcrafted to remove gluten."ÂÂ The company lobbied the White House to change that, saying Omission otherwise meets proposed labeling standards for gluten-free food.

"It involves the potentially competing interests of business development versus public safety, and the role that the U.S. government should play in striking a balance between the two," said Peter Olins, a Colorado-based biochemist and co-founder of the website

. "If it acts true to form, the FDA will probably end up being unpopular with both interest groups."

Craft Brew launched Omission in Oregon

, and its success has surprised the company, Michaelson said. Lorin Gelfand, the brand's marketing manager, said Omission's pale ale and lager rank No. 2 and 3 among gluten-free beers, behind Anheuser-Busch Inc.'s sorghum-based Redbridge.

Omission accounted for nearly 2 percent of its overall volume and 10 percent of its growth in the first quarter that ended March 31,

. Earlier this year, Craft Brew released its third Omission beer -- an IPA -- in Oregon.

Lots of wheat beers



That's important because the company's biggest seller -- Widmer's Hefeweizen -- is being crowded out by other wheat beers from heavyweights

. and

. Sales of the German-style wheat beer fell 11 percent in the first quarter of 2013, mostly along the West Coast, where 80 percent of Craft Brew's market lies. That decline is a big reason why the brewer

last quarter.

Craft Brew also owns

and

, whose sales are growing. But multinational breweries continue to push into its space, while microbreweries and brewpubs opened at a rate of roughly one a day last year across the country.

Though Casey and Michaelson have personal stakes in Omission's success, Craft Brew hopes to capitalize on the gluten-free diet craze gripping even people without celiac. The $4.2 billion gluten-free food market has grown at an annual clip of 28 percent, according to

. Nearly two in 10 adults buys or eats food tagged "gluten-free," sometimes just to support gluten-intolerant friends or family, the market research firm says.

"Omission allows us to get to more potential beer drinkers," Michaelson said. "The sales potential is much beyond just celiacs."

Thus the importance of the "gluten-free" label. Last spring the Oregon Liquor Control Commission staff decided Craft Brew could call Omission "gluten-free" without violating its rule against advertising alcoholic drinks with false or misleading information, agency spokeswoman Christie Scott said.

The FDA standard



But the U.S. Alcohol and Tobacco Tax and Trade Bureau, which regulates interstate beer sales,

the company instead has to package the beer as processed "to remove gluten." It also must carry a warning that no tests exist to verify gluten in beer, at least until the FDA rules on the issue. The bureau

that affixing a "gluten-free" label to a product made with barley, rye, wheat or crossbreeds would be "inherently misleading."

Since 2007, the FDA has considered allowing foods with less than 20 parts per million of gluten to be labeled "gluten-free." But its final proposal, now under tightlipped review by the OMB, would bar such labeling on foods where no valid test exists to determine safety.

Early last month Wyden and four other Northwest congressmen sent OMB Director Sylvia Burwell

saying the FDA was being "unnecessarily rigid." They offered an example for how the rule could be changed to include foods processed to remove gluten.

A sign between Craft Brew Alliance's grain handling area and packaging area warns workers at the Portland brewery when Omission beer is being bottled.

Besides, Craft Brew says, now a valid test does exist. The company says it uses the test up to 30 times on each 7,000-gallon batch of beer. It posts results that consumers can

by entering a date stamped on each Omission bottle.

It's taken other precautions to keep gluten out of Omission, too, Casey said. Craft Brew limits access to the bottling area and testing labs when Omission is around. It also relocated pipes that handle abrasive bulk grain in case they cause a pinhole leak and release malt dust into the bottling area.

Gluten fragments



But scientists say the test doesn't detect all potentially harmful gluten fragments. Recent tests by Canada's public health agency found gluten fragments in beers from Spain and Belgium that use a gluten-removal process similar to Craft Brew's. It's unclear whether the fragments are a health concern, Health Canada spokeswoman Blossom Leung said via email.

Stephen Taylor, co-director of the

, used to test Omission beer for Craft Brew. But he said he stopped when he discovered it was being brewed with barley.

"I'm concerned that there might be big pieces of gluten protein left in this beer that are still potentially hazardous," Taylor said. Craft Brew's enzyme destroys the string of proteins the test is designed to detect, he said, "so, it defeats this test. Now, the question is, does it make the beer safe for people with celiac disease? The answer to that is nobody knows."

Casey said he's confident the gluten molecules left behind are too small for the body to pick up.

"There's no denial that we're going to find pieces of protein in the beer," Casey said. "Those don't go away. But those pieces are small. That's our view on it."

Terry Michaelson, chief executive of Craft Brew Alliance Inc. in Portland, has lived with celiac disease for 12 years and can't drink most of the beers his company makes. But he says he drinks Omission weekly.

Michaelson, having lived with celiac disease for a dozen years, knows how hard it is to avoid getting sick. Two months ago, he said, one of his favorite brunch spots served him a regular waffle by mistake. He didn't recognize the difference until he'd downed most of it and subsequently got sick.

"Sometimes it's very strong and sometimes it's not," Michaelson said of his reactions. With celiac disease, he said, "any gluten you take in, whether you get sick or not, ends up in some way damaging the intestine. It's obviously not something you want to do either for short-term reaction or long-term health."

Still, he said, he drinks Omission weekly and hasn't had a reaction. He said Craft Brew receives fewer complaints about Omission than it does its other beers. "We get people calling here every day who think they had a reaction to one of our beers for some reason, not because they were celiac."

A bad reaction



Barb Yingst, who runs

, said she tried Omission this past winter, once at a restaurant and once at home. Both times she felt bloated and spent "extra time in the bathroom" within 30 minutes, she said. Her son also reacted negatively, she said.

"I've seen some people say they don't have any problems with it, and I've seen other people who say they do, and my family's one of them," said Yingst, of northwest Washington.

Meanwhile, the White House's decision on the gluten-free rule could come any day. Depending on the result, the alcohol bureau could change its ruling in the Craft Brew case. For now, though, Casey and Michaelson say the company continues to spend money looking for more valid tests for the beer.

"We think there's going to be some more information coming out very soon," Michaelson said. "The irony of it is at the end of the day, our testing and our process and our science is probably being held to a higher scrutiny than anything else" on the market.

-- Brent Hunsberger