On the Coming Hops Crisis

Everybody from the Los Angeles Times to the York (PA) Daily Record seems to be talking about hops these days. At issue is record demand and short supply for the vine blossom known as the “spice of beer,” resulting in skyrocketing prices. According to most stories I’ve seen, this will soon translate into across the board higher prices for beer.

Does this worry me? Nah, not really.

As a percentage of the cost of production of any beer, even extremely hoppy styles like IPAs and barleywines, hops are, if not quite negligible, then not too terribly significant. Compared to packaging, the fixed costs of production, mark-ups and transportation, ingredient costs constitute but a small part of the price you and I pay for beer, and hops are in turn a pretty small part of a beer’s ingredients.

(Barley malt, on the other hand, is a completely different matter, since it constitutes a much greater percentage of ingredient costs. And with the mounting pressures on demand from biofuels, we could be seeing barley-led price increases in the not-too-distant future.)

Rather than cost, then, what these newshounds should be focusing on is supply, which could have a much greater impact on what we drink on the months, and potentially years, to come. Think about it: If today’s enthusiastic, young craft brewers can’t get their hands on the quantities or varieties of hops they could in the past, they will be working with a figurative hand tied behind their collective backs. And from what I’ve seen thus far, that looks very much to be soon becoming the case. In other words, prepare yourself for fewer double IPAs and extravagantly hopped ales and lagers in general.

On the other hand, there may be a beneficial side to all of this. With a smaller quantity of such popular hops as Cascades at hand, brewers will most likely be forced to innovate, using hop varieties they may not previously have tried or even – sacrilege in much of the U.S. craft brewing world – creating beers that are malt rather than hop driven.

Scottish-style ale, anyone?

Comments

[Stan Hieronymus]

I fear that the downside is acreage of aroma hops (and Cascade happens to be one of those) continues to decrease because larger breweries are demanding high alpha hops. So they can more efficiently "balance" their low malt beers.

Once again eliminating options for beer drinkers.