Beer Prices Coming to a Head

By Beacon Staff

Beer drinkers beware: The mounting cost of beer ingredients could send local microbrew prices hopping, while a hop shortage could leave some brews lacking their signature flavor.

The price for malt barley – the primary ingredient in beer, along with water – has more than doubled in the past two years. Prices for hops, which determine a beer’s flavor, color and aroma, have at least doubled, and in some cases risen to five times their cost last year. And that’s if the hops are even available; most are in short supply, and some types have simply run out.

Brewers, especially craft brewers who are less insulated from the rising prices than larger industrial rivals, may be left with few choices: Raise prices to cover skyrocketing costs, decrease the amount of hops used, or alternate hops when they’re unavailable or too expensive.

“I think we’ll see beer become a little more like wine, where you have different price ranges for different kinds,” Joe Barberis, head brewer at Great Northern Brewing Company in Whitefish, said. “It used to be a six-pack would cost about the same as any other six-pack, but I think hoppier beers will start costing more because they have to.”

Barberis said total malt prices for the Great Northern have increased by about 27 percent over last year’s cost, while hops have gone up approximately 366 percent. One hop that sold for about $4.50 a pound last year now goes for about $20 per pound. The average 20-barrel batch of beer uses anywhere from five to 20 pounds of hops.

For Great Northern’s “flagship” beer, Wheatfish, that’s a 46 percent cost increase for basic ingredients, and for their hoppiest beer, Bear Naked Amber, an 87 percent jump in just the past year.

In addition, glass prices for bottling are up, as well as the price of cardboard for packaging, and transportation bills are climbing with the price of fuel. All these factors combine for daunting numbers on the expense side of a brewer’s ledger.

Breweries across the valley are feeling the pressure as costs continue to rise. Consumers don’t always feel those price increases: Distributors and retailers frequently eat the costs themselves. But with prices shooting up quickly, things could soon change at local taps and restaurants. And, in the case of six-packs, area brewers say the question isn’t if prices will go up, but how high they’ll climb.

Craig Koontz, brewer at Tamarack Brewing Company in Lakeside, said six-packs in some markets like Seattle have already reached $10.99. “Supply and demand is totally off tilt right now; it’s just all on the demand side so we’re seeing 300, 500 percent increases,” he said.

High barley prices are largely due to poor harvests in recent years, crop-devastating droughts and a decrease in farmers growing the grain, in part, because numerous farmers have switched to corn crops made more lucrative by a rising demand for ethanol.

A decade-long oversupply of hops that prompted farmers to abandon the crop has finally run out and acreage was down this year. On top of that, Australian crops were decimated by drought, hailstorms damaged crops in Europe and heat in the western United States reduced yield.

Trends in recent years have lent themselves to an increase in microbreweries and their sales, and brewers have experimented widely with hoppier beers. Now, that experimentation may shift to trying to tweak or replace recipes to cover for nonexistent or expensive hops: “There will be subtle changes in flavor if brewers play with recipes,” Koontz said.

“It’s just kind of an everything hit at once kind of thing,” Brad Turnbull, general manager at Lang Creek Brewery in Marion, said. “You know it’s going to hurt some breweries out there, especially if they’re not getting hops for their main staple, and it’ll probably put some out of business.”

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