A Shaky Market for Hops Challenges Brewers

Ron Barchet of Victory Brewing Co., foreground, discusses hops in a field in Germany. To avoid spot-market rates, Victory has agreed to buy thousands of kilos annually from a grower of Tettnang hops at a locked-in price.
Ron Barchet of Victory Brewing Co., foreground, discusses hops in a field in Germany. To avoid spot-market rates, Victory has agreed to buy thousands of kilos annually from a grower of Tettnang hops at a locked-in price. (Victory Brewing Co.)
By Greg Kitsock
Wednesday, August 15, 2007

To rephrase an old ad jingle, when you're out of hops, you're out of beer.

Local craft brewers are still feeling the sting of a disastrous 2006. "It's bad," says Ron Barchet, chief executive and brewmaster for Victory Brewing Co. in Downingtown, Pa. Last year, he reports, European hop farmers experienced a continent-wide setback: An unusually dry growing season followed by heavy rains at the time of harvest resulted in fewer and poorer-quality hops, deficient in alpha acids, hops' primary bittering component.

As a result, European breweries began buying more American hops, driving up prices for varieties such as Cascade that are normally cheap and abundant. And the U.S. industry wasn't exactly enjoying a glut. In October, hops in a Yakima, Wash., warehouse spontaneously combusted; the conflagration destroyed about 10,000 bales, 4 percent of the entire U.S. crop.

A shortage of a crucial hop variety can play havoc with a brew house schedule. Earlier this year, Old Dominion Brewing Co. in Ashburn delayed the release of its midwinter seasonal, Millennium Barleywine, because it couldn't obtain whole-flower East Kent Goldings hops from England.

Hugh Sisson, founder of Clipper City Brewing Co. in Baltimore, said he would probably tweak the recipe for this year's Winter Storm to conserve on Simcoe hops, a high-alpha, intensely aromatic strain that's gaining popularity among craft brewers.

Soaring hop prices are also cutting into brewers' profits. "Hops are easily up 20 percent over last year," says Sisson, "and that's if you're buying under contract. If you have to scrounge for hops on the spot market, that can add another 10 to 15 percent to your costs."

One long-term solution is for mom-and-pop brewers to make their own deals with mom-and-pop hop growers. Victory dodged a bullet that way, Barchet says. The brewery signed a contract with Georg Bentele, a German farmer, to buy 10,000 kilos of hops a year (one-third of his crop) over the next six years at a locked-in price.

Bentele grows Tettnang hops, one of the so-called noble varieties (so designated because of their subtle, delicate, spicy aromas). Tettnang is less well-known than the Czech variety Saaz (which gives Pilsner Urquell its peppery dryness) or the flowery German Hallertau, a hallmark of Samuel Adams Boston Lager. But it's a favorite of Barchet, who praises it for its dry, spicy aroma and flavor with just a hint of pine.

Tettnang is one of four hop varieties that flavor Victory's Prima Pils, the brewery's second-best-selling brand after HopDevil India pale ale. Occasionally, Victory will brew a batch of its draft-only Braumeister Pils using Tettnang exclusively.

As hop prices rise, farmers might solve the problem simply by sowing more hops. Is it possible hops might become a cash crop in the Northeast? Long before it became home to the Baseball Hall of Fame, Cooperstown, N.Y., was the hub of a thriving hop-growing area. But blight struck the fields, and hop production eventually shifted to the Pacific Northwest.

According to Barchet, a farmer named Ric Pedersen is growing hops commercially in Seneca Castle, N.Y. In fact, in October, Victory will be using freshly picked, unprocessed hops from Pedersen's farm for its Harvest Pils and Harvest Ale.

But there's a catch: Hops, like wine grapes, are sensitive to soil and climate. A Tettnang grown in America may never exhibit the same flavor characteristics as the German original.

While waiting with fingers crossed for the fruits of the 2007 hop harvest, Barchet and Sisson will try not to pass their extra expenses on to the consumer. But Barchet fears that the long-term trend is for hop costs to drive prices upward, not just for craft beer but also for national brands such as Budweiser, Miller and Coors. "Hop brokers are making brewers sign five-year contracts at higher prices," he says. Add to that the possible effects of global warming on the hop crop, and you can see why we're all over a barrel.

Greg Kitsock's Beer column appears every other week. He can be reached atfood@washpost.com.

© 2007 The Washington Post Company