Owners of Small Breweries Struggling to Find Enough Specialty Hops

Tripp Mickle reported yesterday at The Wall Street Journal Online that, “Creature Comforts Brewing Co. is growing so fast that its supply chain can’t keep up.

The brewer has had so much trouble finding enough of a special type of hops called citra—the plant that gives its popular Tropicália ale its bitter flavor and fruity aroma—that it has been forced to reject orders for about 8,000 barrels of beer during the past year. That is more than $2 million in revenue and enough beer to nearly double production.

“The Athens, Ga.-based brewer isn’t alone. A host of smaller, regional brewers including Wicked Weed Brewing of Asheville, N.C., and MadTree Brewing of Cincinnati have run into similar constraints.”

The Journal article noted that, “The shortages are contributing to the sudden slowdown in craft beer sales. During the first half of the year, independent brewers’ volumes grew about 8%, ending six years of double-digit growth, according to the Brewers Association, which represents the industry.”

Mickle explained that, “The problem isn’t lack of hops production. Farmland devoted to the crop has increased 65% during the past five years to about 51,000 acres from 31,000 acres. About 70% of that land is planted with high-demand varieties such as citra, which also is a key ingredient in popular brews like MadTree’s PSA (Proper Session Ale).

The problem is the rapid proliferation of tiny beer brands from a fiercely competitive and rapidly expanding craft beer industry. Beer drinkers now have an estimated 30,000 different choices from 4,000-plus brewers to pick from, compared with about 20,000 beers from 2,000 brewers five years ago, according to the Brewers Association.”

The Journal article added that, “Production is complicated by the time it takes to grow hops. The plants produce about 50% to 75% of their potential yield in the first year on average and don’t mature fully until their second or third year. Meanwhile, new breweries open daily. Those startups often are uncertain about growth plans, making it risky for farmers to commit to long-term contracts with them.”

This entry was posted in Agriculture Law, Start-up Company Law. Bookmark the permalink. Both comments and trackbacks are currently closed.