The Future of Beer Wall Street Journal Presentation Patrick Olds Drew Richards Jordan Rowsey Lee Saunders
Hops: What they are • Beer is made of three main ingredients: • Water, Barley, and Hops. • Hops add flavor and aroma • More hops in a beer makes the beer more bitter and bolder.
Hops are primarily grown: • Hallertau region of Germany • Willamette and Yakima valleys in the United States.
Shortage of Hops • 10,000 acres of hops world-wide were lost this past year • Poor weather conditions • Growing demand in Asia • Reduced acreage due to real-estate development
Shortage on hops caused an increase of price • Price per pound went from $3-$5/lb to around $20-$40/lb • Smaller, independent breweries were forced to raise retail prices • Sierra Nevada raised price of 6 packs by 50 to 60 cents
Along with the shortage of hops, there is increase in demand for them • Bolder beer styles have become more popular recently • In the past year, 47 of the top 50 brewing companies have grown in production to keep up with demand
Brewers – what they are doing • Brewers are resistant to reducing products containing hops • Recipe changes is one alternative
Substituting hops is effective in conserving hops with greater demand • The bitter hops are easier to substitute than the aroma hops • Some “hoppier” beers are only produced in limited quantities because of the price of hops
Companies are creating new beers, which rely less on hops • Chocolate-Oatmeal Stout
In review… • The future of beer seems pretty secure • Though hops are lacking, industry continues to grow • 8,500 acres of hops planted in U.S. • 11,000 acres worldwide
Hops planted are bitter hops • Don’t reach full maturity for 3 years • Don’t do as much to give unique taste • Altered recipes • Less diversity in styles
“Things are predicted to get a little better … but it’s definitely not in the clear.” --Mr. Koch of Stone Brewing Co.