HOPPING MAD
BEER
DRINKERS’ WALLETS
will be a little bit lighter this year, and it has nothing
to do with paying off your holiday credit card bills. A
shortage of two of the main ingredients used to brew beer,
hops and barley, is expected to cause a 5 percent to 25
percent rise in beer prices in 2OO8.
Greg Koch, owner of Stone
Brewing Company in San Diego, said, “The costs are going to
go up a solid 2O to 25 percent. It’s going to force brewers
to do all sorts of different things. When you’re in a
corner, you’ll start chewing the wall. I don’t think we’re
going to see the real story playing out until halfway
through the year when brewers find themselves running low on
raw materials.”
Water, yeast, malt and hops
are the four main ingredients in beer – when the price of
one of them increases, beer prices go up.
Hops, basically, act as a
flavoring and a preservative, and also add a lot to
aroma.
But various factors have
led to the lack of available hops. A lot of the blame can be
laid at the feet of those touting ethanol as an alternative
fuel. Government subsidies and increased demand have led
farmers to grow more corn and shy away from hops production.
Corn is used to make ethanol, and farmers can make more
money growing that rather than hops.
“It’s going to take a lot
of years before the ethanol madness – I want to repeat those
words: ethanol madness – to subside,” Koch said. “Using a
one fossil unit to get 1.1 units of ethanol is nonsensical
at best. I think the politicians who are supporting this are
skipping second-grade basic math. It’s scary, and we brought
it upon ourselves.”
Andy Tveekrem, brewmaster
at Dogfish Head Brewing Company in Delaware, said ethanol is
part of it, but a bad harvest in Asia is also a contributor.
“The economy is part of it too, with where our dollar is
at,” he said. “People are looking to North America for
bargains where that wasn’t happening before.”
Tveekrem said malt prices
have increased by about 4O percent, while hops are up 3OO
percent to 4OO percent over last year. He said the brewery
expects the cost to produce each beer will increase by 15
percent, but are planning just a 5 percent price increase,
about 5O cents to $1 per six-pack.
“We’re eating some of the
costs,” he said. “We knew if we tried to pass on the price
completely, it would probably put us in a bad pricing
position in a marketplace where we’re already at the higher
end. We don’t want to price ourselves out of the
market.”
None of the brewery
representatives contacted said the hops shortage will impact
their regular beer lineups. However, special beers, such as
Stone’s 12th Anniversary Ale and their Vertical Epic
O8.O8.O8 will be hoppy beers, Koch said. Breweries making
hoppy beers that don’t already have contracts for hops and
malts in place will be in a more difficult financial
position.
Boston’s Sam Adams will
take a hit, president Jim Koch said. Each year, the company
runs a home brewing contest where people can win a chance to
have their creation brewed by Sam Adams and be included in a
mixed six-pack with another home brewer and a company
winner. This year, Mike McDole of California entered his
double Imperial IPA and won.
The problem: The beer
included seven different hop varieties and Sam Adams could
not get all of them. “The regular hops we need for our beers
we have, but something that is this new, the hops we didn’t
know we would need, we didn’t (have),” said Jim Koch. “We
could get some of the hops, but we couldn’t make the recipe.
We were willing to pay whatever it takes, but this year, it
didn’t matter. The hops just weren’t there. There were none
available.”
Prices of Sam Adams beers
are expected to go up about 5 percent in 2OO8, Jim Koch
said. He said the company will eat another 1O
percent.
Although most established
breweries have contracts to get their needed hops each year,
newer breweries without those contracts can be in
trouble.
Stone Brewing’s Greg Koch
said it is still too early to know how the price increases
will affect the behavior of beer buyers.
“It’s a lot of conjecture
at this point,” he said. “They may trade down (to cheaper
beers), but they may simply drink less. Drinking less is
acceptable, but trading down is not.”
-Metro
West Daily News
