Craft beer boom sends US to top of global hop charts

The craft beer boom has catapulted the US to the top of the pile of the world’s hop growers for the first time in almost half a century.

Farmers are rushing to increase their hop acreage to tap rising demand for the key ingredient in beer.

Hop acreage in the US jumped 18 per cent to 18,478 hectares last year, ousting Germany from the top spot for the first time since 1967, according to an annual report from Barth-Haas Group, the hop trader.

“The expansion of the US hop industry is driven by the craft beer movement’s appetite for US flavour hops,” said Barth-Haas. The trend was “unlikely to be reversed for the time being”.

The US also became the top hop producer by volume in 2015, producing 36,389 tonnes, up 12 per cent from the previous year. Germany’s output fell 26 per cent to 28,337 tonnes after a severe drought hit the crop. The US last overtook Germany in 2013.

Demand for “aroma” hops that flavour beer has surged thanks to the growing popularity of craft beer. Prices have jumped for certain speciality hops as craft brewers use between four and 10 times more than the average lager produced by international beer groups.

The high prices have encouraged hop farmers to increase the planting area of aroma hops.

According to the latest report from the US Department of Agriculture, the country’s 2016 acreage has so far risen by 17 per cent to the highest level in almost a century.

The number of varieties cultivated in the US totals 83, compared with 32 in Germany, highlighting “where the action is in today’s hop market”, said Barth-Haas.

Popularity in craft beer continues to grow. In 2015, US craft beer output rose 15 per cent, slightly below the growth of 18 per cent in 2014, according to the country’s Brewers Association. Nevertheless, the association which represents craft breweries in the US this week warned that production volume growth in the first half had slowed to 8 per cent as the market has started to mature.

The overall beer market continued to contract in 2015, with world beer production down for the second consecutive year for the first time in the postwar period. Although beer output fell in 1984, 1992 and 2014, “never before had declines been registered in two years in succession”, said Barth-Haas.

Production fell in China, US, Brazil and Russia, and 2016 output is forecast to fall again.

On this year’s crop, the US hop harvest is expected to be “large”, easing “the pressure in the overheated market for flavour hops”, the report said, while in Europe the hope is for a “normal” crop.

A severe drought in the hop regions in Germany and intense heat affected crops in 2015, leading to a scramble for the ingredient.

In the US Pacific Northwest, the key growing region for hops, a warmer than normal spring accelerated growth for several varieties, although water supplies are expected to be adequate thanks to higher than normal snow volumes last winter.

At the end of May, “hop growth was ahead of normal” in the US, while in Germany, hops in Hallertau, a leading hop-growing area in Bavaria, were damaged by heavy rain and hail in May and June. “The resulting shortfall in yield will depend greatly on the weather and growth patterns during the rest of the season,” said Barth-Haas.