Community | February 04, 2008 | 1 comment

The Beer Famine of 2008

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TheRealEdwin
Try not to panic.

At Stomp Them Grapes, the international shortage of beer hops has hit home.

In the Denver home-brewers supply store, signs taped to two freezers holding pouches of leaf and pellet hops — the flower used to give bitterness, flavor and aroma to beer — alert customers: “Due to hop shortage crisis, hops will only be sold in amounts needed to fill a recipe.”

“We had to stop selling hops on the Internet,” said Brian Carter, co-owner of Stomp Them Grapes, who limits customers to 4 ounces at a time. “Last week, people were trying to buy 100 ounces.”

The shortage stems from a prior 10- to 12-year surplus that prompted hops farmers to reduce acreage, as well as hail and flooding in Europe, said Julia Herz, director of craft-beer marketing for the Brewers Association in Boulder.

“There is a 10 to 15 percent shortage,” she said.

Craft brewers, which rely on hops to produce a wide range of flavors, are particularly susceptible, she said.

While major brewers have long-term contracts that lock in supplies and prices, industry experts say smaller microbrewers and consumers will feel more of the pinch.

“The prices are definitely going to go up,” said Benj Steinman, publisher of New York-based Beer Marketer's Insights.

Boston Beer, the No. 1 craft brewer and maker of Samuel Adams, is looking at a 5 percent increase in retail prices, said Steinman.

“The hop world is in crisis right now,” said Ralph Woodall, director of sales at Yakima, Wash.-based Hopunion LLC, which supplies hops to 1,200 craft brewers, brewpubs and home-brew supply stores in the United States and Canada.

On Monday, even as he scrambled to fill orders for breweries that had not contracted orders ahead of time, Woodall said he believes the beer industry will feel the pain for up to three years out.

Woodall said the U.S. and Germany produce about 75 percent of the world's hops.

He has seen Cascade hops, the most popular among craft brewers, jump from $4.10 per pound to about $12.35 per pound in two months.
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