Brewers See Higher Prices Ahead

By Greg Kitsock
Wednesday, January 2, 2008

Will 2008 be frothy or flat for beer drinkers? Unfortunately, the new year brings portents of major price increases. Hang out with some brewers and you'll hear the phrase "perfect storm" tossed around a lot. A convergence of factors -- bad harvests, reduced acreage, burgeoning demand for beer in China -- is driving the price of barley and hops skyward.

"Malt is up as much as 100 percent," reports Julia Herz, craft beer marketing director for the Colorado-based Brewers Association, "and I've seen increases as high as 300 to 400 percent on certain hop varieties."

How much more will you pay for craft beer? "My suspicion is a buck a six-pack," says Hugh Sisson, president of Clipper City Brewing Co. in Baltimore. He's targeting $8.99 for his Clipper City brands and $9.99 for his heftier Heavy Seas line, although he adds that the distributors and retailers will also have a say in the pricing.

Very hoppy beers might increase even more or just disappear from the market as the supply of prized aroma hops dries up.

Mike McCarthy, head brewer for the local Capitol City brew pubs, says the Amarillo hops he uses in his pale ale have soared from $6 a pound to $15. Capitol City has already upped the price of a glass by 50 cents, he says. "But you can't charge $9 a pint, so at some point we've got to eat the costs."

An interruption in the supply of Tuppers' Hop Pocket Ale and Pils seems guaranteed, now that Old Dominion Brewing Co. in Ashburn has ceased brewing the beers and brand owners Bob and Ellie Tupper had yet to line up a replacement brewery as of mid-December.

"Originally, tank space was the issue," Bob Tupper says, "but now we can't find breweries who are sure they can get the hops they need for the recipes." Tupper says he might use whatever hops are available to make a stopgap brew called Tuppers' Hop Pocket Vintage 2008.

Other brewers also plan to creatively navigate around the shortages.

At Vintage 50 brew pub in Leesburg, head brewer Bill Madden says, "We'll brew more Belgian styles, which use less hops."

Sam Calagione, president of the Dogfish Head Craft Brewery in Milton, Del., will attempt to re-create an ancient chocolate beer, based on an analysis of 3,200-year-old pottery shards found in Honduras.

Called Theobroma, the beer will measure 10 percent alcohol by volume and will be brewed from cocoa powder and cocoa nibs, honey, chili peppers and annatto, a fragrant tree seed. Bottles won't appear until August, but a test batch, Calagione writes, might show up on tap before then at the Dogfish Head brew pub in Rehoboth Beach.

As for other 2008 developments, first look for breweries to launch brands aimed at health-conscious consumers. SABMiller in February will begin test-marketing its Miller Lite Brewers Collection, consisting of a low-calorie, low-carb blond ale, amber beer and wheat beer. Clipper City's Sisson will reformulate his Oxford Raspberry Wheat as an organic beer, to debut in March along with an organic amber ale called Oxford Class (a revival of an old brand name).

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