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Hop demand increases, small brewers battle shortages, higher prices

May 16, 2014Jason Morgan

Hops: Craft brewers love them.

Hops: Craft brewers love them. Craft beer drinkers love them. The problem is that, as an agricultural product, there’s only so much product to go around. Growing season is in full swing and next year’s harvest is right around the corner, beginning in late summer / early fall. Craft Brewing Business has written extensively about the importance of establishing your hops supply contracts early. As more small craft brewers enter the market, the chance of a shortage should come as no surprise. Yet, new craft brewing start-ups are battling just that.

KCRG in Iowa has reported that local microbreweries are struggling to find a steady hops supply and pay for the highly priced, in-demand product:

The growing desire for more flavorful, hoppy beer is happening at places like Another Road Brewing in Marion, due to open for business in late May.

“It’s really nice when you can get something that’s really grapefruit-y, or really mango-y,” said Alex Zoll, owner and manager. Zoll uses several varieties of hops to achieve those flavors, and he’s noticed a jump in their prices from his supplier. “They raised the price on two of ours, both the Simcoe and the Amarillo, close to 89 cents a pound, which has brought it up to about $22 a pound at the moment,” Zoll explained.

Teresa Albert, owner of Millstream Brewing, said a big part of the price hike and shortage in certain hops, is the fact that small breweries have exploded in the U.S. in the last two years.

She calls that a double-edged sword: “It’s fabulous for craft beer, because it’s creating such an awareness, and we’re seeing a 10 percent growth every year, so it’s good for us, it’s good for them.”

It also means hops growers are racing to catch up with demand.

For the full story, be sure to head over to KCRG.

And as Bloomberg Businessweek pointed out, this demand continues to drive up hop prices (the average price for all hops was $3.59 per pound in 2013, nearly twice as much as in 2004). Keep in mind the hop demand isn’t necessarily driven by consumers, even though craft enthusiasts love IPAs. In addition to the ever-growing list of new brewers, craft brewing industry staples are constantly upping the hops ante in each new release, searching for that better, attention-grabbing IPA. From Businessweek:

 Aroma varieties cost more because of lower yields, says Ann George, executive director of the Hop Growers of America, and the higher demand is luring some growers to remove alpha varieties to grow the aromas. Aroma hops can cost two to as much as seven times more per pound than alpha hop varieties, according to Chris Swersey, technical brewing projects manager at the Brewers Association.

Cost has not stopped craft brewers from using higher-priced hops in high concentrations. While the average beer is made with about 0.2 pound of hops per 31 gallons, craft brewers use 1.25 pounds, according to George.

Consumers’ desire for hop-heavy craft beers has stabilized, [Swersey] says, so hops sales now will be driven by volume increases rather than shifts to even more flavorful varieties.

For the full story, be sure to visit Bloomberg Businessweek. And don’t miss our in-depth hop feature detailing the importance of a hops contract and what to look for in a distributor. After that, check out all our hops-focused features.

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Meet the next great Australian hop from HPA: Eclipse
Watch: BSG Hops brings Humulus U online in 2020, now dig all these free modules on hops and brewing
YCH Solar Panel Press Release 2
Yakima Chief Hops adds solar panels atop six of its buildings
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Hop Breeding Co.’s Talus brand HBC 692 now commercially available

Reader Interactions

Comments

  1. ebasstx says

    May 19, 2014 at 10:01 am

    Hop demand increases, small brewers battle shortages http://t.co/lZFgZCDwoC

    Log in to Reply
  2. GreatLakesHops says

    May 18, 2014 at 7:37 am

    Hop demand increases, small brewers battle shortages http://t.co/i0I4SEf8dl

    Log in to Reply
  3. SurreyLiquor says

    May 18, 2014 at 2:30 am

    “Hop demand increases, small brewers battle shortages, higher prices” good read http://t.co/3O52qWgaI5

    Log in to Reply
  4. GP_Analytics says

    May 16, 2014 at 7:07 pm

    @CraftBrewingBiz reports on #hop demand – http://t.co/0NJhsyh2mP – #craftbeer #craftbreweries #beer

    Log in to Reply
  5. MerchTex says

    May 16, 2014 at 6:15 pm

    RT @CraftBrewingBiz: Hops demand increases, small brewers battle shortages: http://t.co/VKpUOugxUw

    Log in to Reply
  6. Ehrmaier High Quality Hops says

    May 16, 2014 at 5:23 pm

    Ehrmaier High Quality Hops liked this on Facebook.

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  7. HAPPY_PINT says

    May 16, 2014 at 1:46 pm

    RT @BrewandCovered: HOPS: Craft brewers love them. Craft beer drinkers love them. Problem is there’s only so much product to go around! htt…

    Log in to Reply
  8. DenverBeerGuy says

    May 16, 2014 at 1:37 pm

    RT @BrewandCovered: HOPS: Craft brewers love them. Craft beer drinkers love them. Problem is there’s only so much product to go around! htt…

    Log in to Reply
  9. BrewandCovered says

    May 16, 2014 at 12:59 pm

    HOPS: Craft brewers love them. Craft beer drinkers love them. Problem is there’s only so much product to go around! http://t.co/uG0DxAfynW

    Log in to Reply
  10. thebeerace says

    May 16, 2014 at 12:57 pm

    Hop demand increases, small brewers battle shortages http://t.co/74hfEPXDIA

    Log in to Reply
  11. crsimp01 says

    May 16, 2014 at 12:40 pm

    Hop demand increases, small brewers battle shortages http://t.co/s9u5uRgcQs via @craftbrewingbiz

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Trackbacks

  1. BOSS Magazine | From Brewery to Cask to You: The Craft Beer Journey says:
    December 22, 2015 at 5:41 pm

    […] Information sourced from Halo and Craft Brewing Business […]

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