Despite an increase of hop acreage in 2015 of 7 percent the balance of worldwide hop supply remains tight. According to the recent Barth hops report last year’s harvested volume in Germany, for over 50 years the leading producer for hops and only now surpassed by the U.S., fell by more than 26 percent, while alpha volume dropped by as much as 39 percent. The same can be said for malt which experiences a tightened supply despite a decline of the global beer production of 1.5 percent to 1.9 billion hectoliters.
For a very long time it seemed to be an unwritten law that the usage of malt and hops for every beer had to decline. Increased usage of adjuncts like sugar which are a cheap substitute for malt lead to a malt usage of only 40% or less for every beer. In order to please everybody breweries also reduced the hop content of their beers to a minimum where it was hardly perceptible. As a consequence major beer brands used to be so light and uniform that even their brew masters could not distinguish their own beers in a blind tasting test from competing brands. These times are over.
Craft brewers as their name suggests often use traditional recipes and brewing techniques which require a much higher content of malt and hops. While craft beer volume made up 7.8 percent of the U.S. beer market in 2014, it accounted already for a quarter of malt consumed. With a projected market share of craft beer of 20 percent in 2020 hop usage for these beers will account for two thirds of the total market.
The implications of this trend are enormous. Experts see a need for 12,000 new acres of hop growing area. But the shift from bitter hops to aroma hops also means cultivation of different breeds and development of new hop varieties. A similar development can be noticed in malts where we see higher needs for malt overall but an even more increased usage of specialty malts, which often give beer distinctive characteristics.
The hops and malting industry, which has followed the long-standing trend of the traditional brewing industry of ongoing consolidation, is experiencing a revival very much like the craft brewing industry. New players appear in the market and try to grab a piece of the pie. Demand for aroma hops and specialty malt partly exceeds the supply and has caused prices to go up.
Traditionally many U.S. craft brewers used to source their raw material needs in Europe not only because of the wider choice but also because of authenticity. With the evolution of the market one can see a differentiation in the supplying behavior. While traditional ales are still produced with British malt and Bavarian style wheat beers with German malt newly developed beer types often use domestic U.S. ingredients.