Hop Troubles: How Yet Another Shortage Will Affect Local Brewers and Beer Drinkers.

There seems to be a recurring problem in the world of craft beers; yet again, a hop shortage is casting an intimidating shadow over smaller, independent breweries. The shortage was cause for concern last year and was even more severe back in 2007. And guess what? It looks like it’s happening again in 2012, which is sure to raise jeers from any craft beer lover.

Nic Cage: An Angry and Frustrated IPA drinker

Hops are one of the few ingredients required to brew beer. For example, Miller Lite hilariously boasts that their beers are triple hopped, although triple hopping is required to make beer. In craft brews, specialty-hops are used to give beer a citrusy or piney aroma and taste, especially in the vaunted and hoppy pale ale and IPA styles.

So what does this year’s hop shortage signal?  While brewers have largely avoided the scarcity of 2007, it is an ominous sign for the future. The 2007 shortage was due to a mix of failed crop harvests in Europe and Australia combined with brewers buying hops in a pay-as-you-go manner, as opposed to buying on contract.

Buying hops “on contract” is supposed to negate any unforeseen demand as this allows brewers purchase a set amount of hops before growers start planting in order to ensure a large enough hop supply. Since the 2007 shortage, 90% of craft brewers are now buying on contract. But in the past week, Hopunion — a major hop grower and broker in the U.S. — has just announced that it will stop taking contracted orders due to crop yield shortages coupled with increased demand.

I have previously written on the effects of skyrocketing demand, and it looks like it’s its rearing its ugly head yet again. Especially disturbing is that if increasing demand has negated hop contracting, it leaves brewers highly vulnerable to a major hop harvest crisis like the one seen in 2007.

An immediate consequence of this new reality is that the beer drinker and bar owner will probably see increases in price. In 2008, Live Oak Brewery in Austin had to raise their prices by 14%. Saint Arnold’s similarly had to tack on $1.50 onto their price per case. If a particularly bad harvest comes along we might see highly hopped beers, such as double or imperial IPAs become extremely scarce. In fact, this already seems to be happening, as lightly hopped beers such as saisons and sours have seen a marked come back in brewers’ small batch brews.

Beer, IPA, Hops
Just your Average Hop Head

Whilst I do enjoy the tartness of a sour, such as Jester King’s new RU55, they may not be for everyone. Any self-confessed hop-head should keep a close eye on next year’s harvest and possibly think about expanding their palette to include some the less hoppy brews.

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Josh Ebsworth

Content Development & Digital Strategy Intern at ChooseWhat.com
Josh Ebsworth is a recent graduate from the University of Nottingham. He enjoys a great craft beer, photography and (lots of) vintage guitars. Shoot me an email at josh@choosewhat.com if you'd be interested in writing or commenting for my series, The Austin Entrepreneur.

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