Post Number: 393
Posted From: 126.96.36.199
|Posted on Sunday, December 02, 2007 - 03:07 pm: ||
Brewers feel the pinch
Worldwide hops shortage could drive up beer prices
By Kalen Ponche
Thursday, November 29, 2007 10:15 AM CST
Take a deep whiff of some freshly brewed O'Fallon 5-Day India Pale Ale and you'll smell flowers and oranges.
The strong fruity scent comes from hops, the "magic" ingredient that infuses beer with flavor and aroma.
But that magic ingredient has become increasingly more difficult for some local brewers to get their hands on.A worldwide shortage of hops has pushed prices up and left U.S. craft brewers, like Brian Owens at O'Fallon Brewery, scrambling to secure a supply.
"Cascade hops this time last year were $4 to $5 a pound and the contract I wrote this year was $15 a pound," Owens said. "It's just amazing. We've got to have them, it's just a matter of paying whatever it takes."
Higher barley prices also have hit craft brewers. The increased costs have some people estimating the price for a pint of local brew could rise in the next year.
The worldwide hops shortage comes after years of abundance. The overproduction of hops throughout the 1990s kept prices low, but over time many farmers chose to plant more lucrative crops, said Ralph Woodall, sales manager for Hop Union, a hops distributor in Yakima, Wash.
With the surplus of hops gone, local brewers have seen hops prices double and triple in the span of three weeks. And smaller breweries are having a hard time securing any hops at all, Woodall said.
A poor crop in Europe and the declining acreage in the U.S. means brewers worldwide are competing for hops. And the brewers in Europe are paying in cash, Woodall said.
"We're fighting against the strong Euro," he said. "A lot of the breweries in Europe purchased U.S. varieties with a strong Euro, so our stocks are short."
Hop Union supplies hops to more than 1,200 microbreweries, craft brewers and home brew supply shops across the U.S. In the past, brewers could call at any time and order what they needed off the shelf, Woodall said.
But this year, the only people who are getting hops are the 450 brewers who have signed contracts with them. Woodall said another 300 people are hoping to get a contract for hops, but they may be out of luck.
"Right now we're in the maybe, maybe not stage," Woodall said. "The dynamics are very big. At $29 a pound, we have to be very careful we don't promise someone something and we can't get it."
John Witte, head brewer at Augusta Brewing Co. and Square One Brewery in Lafayette Square, said he was surprised when he found out he wouldn't get hops without signing a contract.
"With (the supplier) it was, 'Oh, by the way, do you have a contract?' 'No.' 'Oh, well, I'm not sure we'll have hops for you after November,'" Witte said.
Hops are particularly important in the craft brewing industry. When they are added to the wort, the oils mix into the boiling liquid, and scents of pine, citrus and flowers rise up. Although hops make up just a small percentage of the ingredients needed to make beer, they give beer its bitterness, flavor and aroma.
"If you didn't put the hops in beer, it'd taste like a carbonated sweet malt alcoholic drink," Witte said. "It'd be out of balance."
If brewers can't get their hands on the right varieties, they may have to start substituting different ones, which could lead to completely different tasting beer. But that's when the job becomes fun for Witte.
"It's one thing to follow a recipe that someone created," he said. "It's another thing to go, 'How can I re-create it with different varieties that don't really taste the same?'"
Witte said he doesn't think the beer drinkers will mind the changing tastes because craft breweries are known for trying new things.
But O'Fallon Brewery Head Brewer Brian Owens is in a different boat than Witte. His beers are packaged and sent out to drinkers who expect to taste the same thing they did the last time they popped open an O'Fallon Gold.
Tucked in a yellow building amongst warehouses off Hoff Road, O'Fallon Brewery churns out 3,000 barrels of beer each year. The brewers plan to increase production to 4,000 barrels a year next year, but the cost to produce that much beer has risen. Owens' budget for buying hops has tripled this year, and customers can expect to pay for the increased costs.
"A lot of the bigger breweries can kind of absorb some of this cost, but everyone across the board is going to have to go up a little bit," he said.
Some experts across the country are estimating the cost of a six-pack could rise by as much as $1 because of the shortage.
At Square One Brewery, prices for a pint already have increased by 25 cents. Owner Steve Neukomm, who also owns Augusta Brewing Co., said most consumers won't start to see an increase in price until the beginning of next year and, even then, it won't be a huge jump.
"It's not going to be like gasoline, let's put it that way," he said. "It'll be change."
Source: http://stpetersjournal.stltoday.com/articles/2007/12/01/news/sj2tn20071127-1128s tc_beer_1.ii1.txt