The international hops shortage has been driven by a combination of increased demand blended with drought
AGASSIZ, CANADA, March 31, 2017 (Newswire.com) – “It will be our job to monitor the situation over the next few years, as craft beer demand knows no borders — movement isn’t slowing down from local and international purchasers. Bulk order exports have increased from China and Russia,” said Fraser Valley Hop Farms Inc spokesperson Shane Douglas Toews.
Canada saw a growth in the number of acres planted, as well as the yields produced for nearly all hop varieties, regardless of hot and dry international growing climates.
“What this means is breweries are going to have to plan what they’re going to brew and order the hops accordingly, with very little room to do more or less than per-ordered.”
John Jenkinson, Farm Operations Manager
Craft breweries continue to pop up across North America. Despite the increase in supply, growers just can’t meet the demand for hops, creating a 5 year shortage of the flower buds.
“Big brewers have had to change the way they’re managing supply resources and cost, as access to hops are becoming more and more limited,” said Alex Blackwell. “The more acres we control, the more power we have in the brewing game.”
Several breweries located in British Columbia, Canada haven’t experienced any shortages when ordering hops. This is largely due to companies like Chilliwack Hop Farms Inc, who have secured long-term purchase contracts – sometimes 2 years in advance.
According to the National Oceanic and Atmospheric Administration, the majority of hops farms in the USA have endured an average temperatures high not seen for the last 121 years. However, as both Chilliwack Hop Farms Inc & Fraser Valley Hop Farms Inc are located on the 49th North parallel. The border USA-Canada border was designed to follow the 49th parallels where the sun is above the horizon for 16 hours during the summer season and 8 hours during the winter. This makes for ideal hops farming conditions.
A lack of capital on hand poses the biggest threat for microbreweries, preventing bulk hop contract orders. Bigger breweries have strategically leveraged purchase contracts sometimes years in advance. As a result, microbreweries are forced to create one-off beer brews from hop spot lists, made up of whatever or whenever hops become available. Breweries that are unable to fulfill their contracts and must be subsequently sold has been a source of hops for cash strapped microbreweries.
Established breweries are unlikely to default on their hops purchase contract. Million-dollar contracts have been linked to bigger breweries, buying up available resources. This shortage has inspired some creativity among brewers who have been forced to focus on malt leading beers that have a unique pungent taste, putting a familiar beer taste to the way side.
The biggest deterrent for “wanna be” hops farmers could be associated with the expensive or high initial cost involved with setting up. Start-up requirements can include the purchase of a processing facility, storage, tractor’s, land treatment, crop treatment, human resources and more. However, an alternative to building your own farm could be the use of Farm Partnerships in British Columbia. Companies like Fraser Valley Hop Farms Inc, recently featured on BC Beer News, allows Farming Partners to participate with annual returns.
By diversifying a 130 Acre farm into 10 Acre lots, those who have little to no personal hops farming experience, can participate in the industry with a comparably modest amount of capital.
10 Acre lots have attracted the attention of independent farm share partners, embracing BC business owners. Fraser Valley Hop Farms Inc has recently purchased a C Can storage container imported from China and delivered to the farm’s leased property on Seabird Island First Nation band, Agassiz, British Columbia. The C Can unit will be used for equipment and tool storage.
Marketing executives at multinational brewers have also diversified their branding to take a piece of the craft beer brewing market. Unique flavors located in populated commercial storefronts allow for social interaction. With adequate funding to design, decorate, purchase equipment, source hops, facilitate pay-roll and purchase (or lease) real estate, multinational brewers clearly have an advantage.
The 2016 growing year in the U.S. was heavily impacted by weather. Last summer, the U.S. marking severe or extreme drought, setting records set in 1958. Thus, frequent water shortages are common in many of these area’s. As Canada has an abundance of water combined with enough sun to propel hops growth, hops farming in the Country has accelerated.
Hops grow on strings help up by elevated posts or telephone polls. Once the plant gets started it will naturally climb up the string, guiding it’s growth upwards. Modest to low maintenance is required from farmers who provide the basic watering, weeding, fertilizing and repeating procedures for the duration of the season. And while hops carry with them a 25 year average plant life-span, hops farming can be considered automated, low maintenance and an easy product to sell.
Shane Toews, Marketing Director
778 939 6535