Craft breweries scramble for hops after poor harvest

Droughts in the US and Europe have led to a 40% decline in the global crop harvest. That's at a time when so-called craft beers, which rejoice in names like Blind Pig and Hop Zombie, are enjoying a surge in popularity. Craft beers use around six times more hops than conventional lager.

Prices for speciality hops have remained elevated, as craft brewers use between four to 10 times more hops than the average lager produced by international beer groups. The value of such hops favoured by craft brewers has doubled over the past five to six years to about $8 to $10 a pound, with some scarce and popular varieties commanding $30.

“The number of craft breweries is growing, say, 10 to 14 per cent, but demand for hops is growing 80 per cent, says Peter Hoey, west coast sales director of BSG CraftBrewing, the US brewing supplies company.

The high prices encouraged farmers to increase their acreage. In the US, the area harvested in 2015 has risen almost 40 per cent since 2010 to 43,633 acres, according to the US Department of Agriculture.

The rise in acreage could eventually lead to an oversupply of hops, but with the craft beer boom spreading to countries including China, Indonesia and Thailand, demand is showing no signs of abating.

Even in Brazil, where the slowing economy is biting, the sector is still “going great guns”, says Scott Casey, analyst at brewing materials consultancy RMI Analytics. He says: “Craft beer is almost recession proof.”