Hops Drop

Climate change and a craft-beer revolution have taken a big scoop out of the increasingly lucrative hops market.

South Pacific Islands are being swallowed by the sea, Hurricane Sandy inflicted $75 billion in damage in the Northeast and ice sheets are sliding off Greenland and Antarctica into the ocean.

While the harrowing threats of climate change have inspired slow and minimal response from global leaders, there’s one effect that could spring the world into action – no beer.

From the Pacific Northwest to Germany and the United Kingdom, rising temperatures and drought have resulted in lackluster crop yields for hops.

Germany, which supplies nearly one-third of the world’s hops, saw its yield drop by 26 percent because of the heat wave in Europe last summer. The drought that’s plagued California has also reached north to Yakima Valley, Washington – where nearly 75 percent of domestic hops are produced – causing yields to drop by 20 percent there last year.

At the same time, demand is as high as ever as the hop-heavy craft beer revolutions have been changing the palate in beer halls across the western world. Brewers are now paying more, while also having to get resourceful to secure the aromatic hops they need.

J.C. Hill, owner and head brewer at Alvarado Street Brewery, crafts an array of heavily hopped and aromatic beers, and recognizes the shortage will likely continue getting worse.

“It’s not a recent problem. There’s been a hops shortage for a while,” he says. “But climate change has added new challenges. Hops are very susceptible to changing weather conditions, and it forces brewers to adapt.”

Alvarado Street and another of the area’s most popular craft breweries, Peter B’s Brewpub, have secured hops contracts – legally binding agreements with growers for price and quantity – through 2020 to meet most of their needs, but sometimes the hops they want are still hard to come by.

While Hill has been able to secure enough Mosaic hops from the Yakima Valley to supply his popular Mai Thai IPA for most of the year, Peter B’s has only secured enough to brew one 500-gallon batch of the Golden Tides IPA (with Mosaic hops) this year.

Chris Loecher, assistant brewer at Peter B’s, unleashes a laundry list of complications: Too much rain, not enough rain, heat, cold, new experimental varietals and ever-increasing demand keep brewers up at night.

“There are so many variables with the hops harvest, and there are so many people buying hops, you really have to work hard to stay on top of things,” he says.

Last year, Alvarado Street Brewery was unable to secure the varietal of hops needed to create their super-popular Minesweeper IPA, so Hill chose an alternative instead.

“It was practically a different beer,” he says. The good news: That beer still won an award.

Depending on the type, aromatic hops have increased in price by 20 to 50 percent over the past few years. Hill says he continues to pay more for the hops he sources – and feels like he’s reaching a tricky point in selling what he calls “an honest pint” of IPA for $7.

“As a brewer, high prices are something I’ve had to absorb,” Hill says. “I don’t want to charge customers any more than [$7], even though I might have to rely on our less-hopped beers to make up for the margins.”

Alvarado Street’s Cold Pressed Hop Juice is a prime example of the creativity brewers are conjuring.

“It’s different every time we brew it,” says Hill, who often changes the hops in the Juice, based on quality and availability. “That’s part of the reason why people like it so much.”

Focusing on different styles of beers is just one strategy he deploys. Hill also buys more of an in-demand hop varietal than he needs so he can barter for other varietals later.

He also travels personally to Yakima Valley to inspect the year’s harvest. “You have to rub them and smell them to see what’s good,” he says. “You really have to put work into securing what you need.”

As climate scientists predict we’re facing a new normal of higher temperatures and drier weather – particularly in many prime hops growing regions of the world – expect growers and brewers to get even more creative to supply the world with bold (and cold) beer.

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