Hops shortage: Higher beer prices on tap?
Time was, when economic worries got you down, you could go to the corner pub to down a pint or two and drown your troubles before heading home.
Thanks to a worldwide shortage of hops, however, a beer might not offer much solace these days.
Hops are a key ingredient in brewing and hop prices have nearly tripled in the last year, brewers said. That price rise could soon affect the price you pay at the tap.
"Right now, if you call a hop merchant, they pretty much don't have any to sell you," said Daniel Kramer, the brewmaster at Owen O'Leary's Restaurant in Natick.
What, exactly, are hops, and why are they so important to beer?
"Hops are flowers," Kramer explained. "They grow on a vine, and they add two things - they add bitterness and aroma. If you have un-hopped beer, it's kind of out of balance."
In the last year, he said, prices for the tiny flowers have skyrocketed.
A year ago, Kramer paid anywhere from $3 to $8 per pound, depending on the variety of hops. Today, those same varieties are going for between $8 and $20 per pound. If the trend continues, prices may also soon be going up for customers at local brew pubs.
"If you walk into the liquor store, you will notice the price of beer is going up all around," he said. "I think we're in a fairly good position, but we may have to raise our prices a quarter a pint. That's really a decision the owner makes. I'm in charge of making the beer, he's in charge of making the company profitable."
The cause of the price spike, said Paul Gatza, director of the Colorado-based Brewers Association, is that there just aren't enough hops to go around.
"About 10 years ago, a surplus developed," he said. "There were more hops available than were being sold. That surplus has now been used up."
As those surpluses pushed hop prices down, many farmers responded by cutting back on production, hoping to plant more profitable crops, Gatza added. With the surplus of a decade ago now drained, brewers are turning to farmers, demanding more production on fewer acres.
"Now we find ourselves in a situation where there's not enough being planted to cover the world demand for hops," Gatza said.
This year's crop was particularly poor, he added, as weather decimated crops in Eastern Europe and England, putting further strain on hop supplies.
In an effort to stave off some of the increases, brewers like Kramer and Aaron Mateychuk, brewmaster for the Watch City Brewing Company in Waltham, have signed pricing contracts with hop merchants - the beer-making equivalent of locking in home-heating oil prices before the winter hits.
Mateychuk, though, admitted Monday the sudden economic pinch has been frustrating.
"It's a little ridiculous and stressful," he said. "We're craft brewers, but now we're worrying about numbers.
"At the beginning of this year, I was just a mess over it. I didn't want to get into the (commodities) market, I wanted to brew beer for a living."
The high price of hops is only part of the story, though.
Many brewers are also struggling with the price of another key beer ingredient: barley.
A 25-kilogram bag of the grain which cost about $30 last year today goes for $50 or more, said Dan Eng, owner of Barleycorn's Craft Brew in Natick.
Like other brewers, Eng has struggled with the question of whether to increase his prices to offset the increase.
"It makes for difficult times, yes," he said. "There's only a certain amount you can increase. We try to pass some of it on, but it's not possible to pass the entire amount on. Some of it we have to absorb."
Though he believes most of his customers understand the reason behind the increases, Eng admits business has fallen off lately.
"I would say at least 15 percent," he said. "But the general malaise in the economy is more to blame. Combined with the increased prices of everything across the board, we're getting squeezed from both ends, and it does make it difficult."
Peter Reuell can be reached at 508-626-4428, or at email@example.com.
The MetroWest Daily News