Could a growing thirst for craft beer in the US revive demand for British hops?
While the regular beer consumer demographic is still feeling the pinch from the Great Recession, the rise of hipster millennials has brought craft beers onto the global center stage. Craft brewers are after the hop flower; the pollen inside is used to create the distinct flavours in each brew. Global hop production is dominated by the US and Germany, each contributing 35%, while the UK trails far behind at a dismal 1.5%. As the US faces an imminent shortage in hops, the growing US thirst for craft beer could be the saviour of the British hop industry.
Two years ago, leading beer taster and author Roger Protz predicted the potential demise of the English hop industry within a decade – at the hands of local British craft brewers. In the pursuit for exciting and foreign tastes, more and more British craft brewers have abandoned home-grown hops in favour of imported hops from other countries such as the US, Germany and New Zealand. British hop production peaked in 1872, when over 72,000 acres were used to grow hops; in contrast, that number has now fallen to less than 2500 acres. Protz likened the phenomenon as akin to the frightening but thankfully hypothetical situation where French wine-makers use imported grapes. While foreign hops have brought many thrilling citrus, herbal and pine notes to our shores, their increased market share could spell the end for British hops. But that fate is set to turn in a most ironic fashion; the “grass is greener on the other side” mentality is apparently a universal one, and British hops appear to have caught the eye – or taste buds – of US craft brewers.
Brewing Across the Pond
Hops in the UK are mostly grown in Kent, Herefordshire and Worcestershire. The British climate produces hops with a unique delicate flavour, affecting those grown in Kent in particular with the cold salt-laden winds blowing off the Thames estuary. This distinct taste has piqued the interest of US craft brewers, who at the same time are facing hop demand and supply issues at home. On the demand side, the number of operating American craft brewers reached a historical peak of over 2800 last year, with a 15% year-on-year growth, in response to the burgeoning craft beer market. While the US beer market shrank by 2% in 2013, the US craft beer market grew by close to 18%. The surge in demand for craft beer has almost doubled the price of hops per pound from US$2 in 2004 to US$3.60 last year. On the supply side, US hop growers are having trouble keeping up with demand, as craft brewer tastes are rapidly shifting from the high-yield alpha variety of hops to aromatic hops. This is coupled by the fact that craft brewers use six times more hops than large corporate brewers.
Roll in the Big Players
The craft beer movement has happened before; its revival in the 1990s came to a standstill after brand oversaturation, followed by a slight slump in the 2000s. The current comeback is again showing signs of brand oversaturation, however a new element could serve to stabilise the market. As the beer industry shows signs of shrinking, major multinational brewers are entering the craft beer game, either by setting up their own brands or acquiring small brewers. In February this year, Anheuser-Busch InBev, the world’s largest brewer known for its Budweiser beers, acquired Blue Point, the oldest craft brewery on Long Island, for US$24m. The involvement of large brewers appears to defeat the purpose of craft beers, in the same way that underground indie music changes its nature when brought under a large pop music distributor; but it could serve an important purpose to sustain the craft beer movement and secure long-term demand for hops.
While the hop market is tightening under limited supply and increasing demand, there is actually an extensive range of hops on offer around the world, and the new market environment will force craft brewers to source new hop varieties outside their comfort zone. If we hope to see a revival in the British hop agricultural industry, local bodies need to market British hops as an attractive choice for craft brewers abroad, as well as encourage domestic craft brewers to support home-grown hops. Of course, there is now no need to fret even if British craft brewers insist on pursuing exotic foreign tastes, as British hops can rely on overseas demand; after all, the grass is always greener on the other side.
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