It’s what is known as the “spice” of beer. Although originally introduced to brewing as a preservative, hops today are prized more for their aroma and flavor as well as their drying, sometimes biting, bitterness. From a brewer’s perspective, they are nothing less than essential.
And today, hops are in short supply—seriously short supply.
You may already have heard about this. News organizations from NPR to the Los Angeles Times have all run stories on the current hop crisis, vaulting this little recognized flower of the vine Humulus lupulus into the harsh glow of the public spotlight. And the cause is a proverbial “perfect storm” of conditions.
While still a principle crop in numerous growing regions around the world, including Washington state’s Yakima Valley, Germany’s Hallertau region and England’s Kent, hops have for the past several decades been among the most perilous and least profitable crops to grow. Consequently, planted acreage in several regions was in decline through the 1980s and ’90s. While rising demand has lately reversed that trend, it also has created a market highly susceptible to shortages caused by weather-related crop failure, as occurred this year in Spain, Slovenia, the Czech Republic and Idaho, according to one hop supplier’s crop report. As such, demand in 2008 is expected to outstrip supply by a significant margin.
The natural reaction of people outside of the brewing industry is concern over what effect price increases for hops of up to 300 percent or more might have on the cost of beer. The answer: minimal. As a percentage of the cost of production, hops are nowhere near expenses such as fixed brewery costs, packaging and distribution, and so their impact on the real cost of a beer is minor. Anyone who tells you different is simply trying to justify a price increase.
So why, then, should bar and restaurant owners be concerned about the hops shortage? Simply, because it very well might affect the availability of some of the beers you stock.
While many breweries will have long since contracted their hops supply for the next year, and in the case of the largest breweries, for several years to come, others are more reliant on the spot market for their hops, and it is here that pressures will come to bear. I have already heard of craft breweries that have had to shut down production for a period because they could not obtain sufficient amounts of hops, and others that have discontinued brands because the specific varieties of hops have not been available. As the shortage becomes more acute, expect this situation to worsen.
Interestingly, the answer to the hops crisis may lie in a reversal, or at least slowing, of the one trend that has dominated American brewing for the past decade and more: the increasing bitterness of beer. As pale ales, IPAs and other well-hopped styles have soared in popularity in recent years, even the largest breweries have seen themselves introducing more assertively bitter brands and perhaps even modifying slightly the hop profile of some existing brands. With hops in short supply, however, we may be in line for growth in more malt-dominated styles such as bocks, brown ales, Belgian-style ales and Belgian- and German-style wheat beers.
Which, for those who favor diversity in beer, may not be such a bad thing in the long run.
Barley malt, by the way, plays a far greater role in the cost of producing a beer than hops, and as chance would have it, malt prices are also experiencing significant upward pressure this year.