#hopsshortage

Resource management is a big part of running a brewery and managing resources responsibly is one of the core values of many craft breweries. Understanding the importance of water conservation, ingredient sourcing, and effective asset management all ties into successful brewery operations. Breweries that take these things seriously often focus on producing high quality craft beers that are, at the same time, environmentally sustainable. These high standards are evident in not only the quality of the beer, but also in the reputation of the craft brewery in the community and throughout the industry.

A key ingredient and resource for craft brewers is hops. Hop varieties contribute to the nuanced flavours of craft beers and are a primary component of brewing. But as climate change continues to impact our planet, hop harvests are being affected. The hot and dry weather of last summer caused a significant decline in the availability of popular hops varieties, creating a potential shortage that could have ripple effects throughout the craft beer industry.

For hop farmers, the increased demand and decreased supply may be good news as hop prices have risen, in some cases by up to 50%. But for brewers, a hops shortage poses a significant problem.

How a hops shortage impacts craft breweries

Independent craft brewers could face issues with production if this year’s hop harvest isn’t at least an average one. Most hop farmers sell hops through contracts with small and large breweries. Marcobreweries tend to claim significant portions of these contracts in order to buy large quantities of hops to produce their lagers en masse. Smaller breweries, while requiring smaller quantities, tend to make hop-heavy IPAs and other craft beer styles that need more flavourful, aromatic hop varieties for production.

Breweries that don’t have contracts with hop farmers, often choosing to shop around from year to year, have thus far been able to get their hands on the resource through hop swaps or exchanges, trading other resources and assets for leftover hops from other breweries or buying excess from farmers that have filled their contract quotas. Because hops are perishable, brewers are often happy to share the hop wealth with other breweries to get rid of what they don’t use. But as less hops are produced and scooped up by contract holders, those left without could find it increasingly difficult to get their hands on a reliable supply and should be wary of the so-called hops “spot market”. Depending on the hop harvest over the next few years, craft brewers may need to look to other options to continue the production of flavourful, quality craft brews. 

Yet, a hops shortage, while not ideal, could also give brewers another opportunity to get creative, producing beers that are less reliant on loads of particular hops. It also could force them to focus on resource management in order to ensure that the hops they do have can be used in the best, most efficient way possible, helping them improve the production process and increase sustainable practices.

How a hops shortage impacts craft beer drinkers

Craft beer lovers would also be impacted by a hops shortage as prices for craft beers, especially those that are hop-heavy, will go up to cover the increased cost of hops. With only 17% of millenials believing that craft beer is a better value than macrobrews, an increase in price may drive that number even lower and could damage the rate at which the craft beer market is growing.

However, a shortage could encourage craft brewers to get even more creative with their brews, producing beers that are less heavily reliant on large quantities of particular types of hops. Craft lagers, which seem to be less of a focus for craft brewers, may see a surge in production and popularity just in time for summer. For craft beer drinkers, this creativity could continue to spice up the varieties and styles of beer available.

How a hops shortage impacts hop farmers

A hops shortage, however, may be good news for farmers and the industry as a whole in the long term. Rising hop prices and increased demand could encourage more farmers to grow varieties of hops. An increased production with more farmers growing hops will positively impact the future of the craft beer industry as supply will be able to meet or surpass demand and brewers can rely on hops to produce plentiful amounts of brews that please the craft beer market.

The future of hops and craft beer

With a possible hops shortage on the horizon, craft brewers, drinkers, and hops farmers will need to make adjustments. While it’s possible that the craft beer industry will suffer due to a lack of hops, this shortage could also be a great catalyst for change.