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4-2017

Global hop market

A local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms. 

Hop Market in Russia

Germany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.

US. Outgrowing its Fulton Street brewery, Goose Island outsourcing two beers

Chicago’s biggest craft beer producer, Goose Island, is outgrowing its britches on the Near West Side. Fighting to keep up with growing demand as the craft beer market in the United States explodes, while still innovating and brewing new beverages, the company has reached a deal to outsource two of its beers to a brewery in New Hampshire.
Soon, all of two of the company’s most popular beers, Honker’s Ale and India Pale Ale, will be made more than 1,000 miles away from the city in Portsmouth, N.H. Doing so, the company said, will allow it to focus on its more specialized beers locally.
It’s the first time that Goose Island has produced its beer outside of Chicago since it started brewing in 1988, and its first major expansion since it opened its brewery on Fulton Street in 1995.
“We’ve continued to expand the Fulton plant, and we’ll expand it this year, but it does have its limits,” said John Hall, Goose Island’s founder and president. “We’d be in a fix without this contract.”
In order to keep up with growing demand in Chicago, as well as to continue expanding nationwide to markets like New York, the company needed to find new capacity to brew its beers. It found that in its partnership with the Craft Brewer’s Association, and its Portsmouth brewery that produces, among other beers, Redhook Ales.
“It’ll give us more capacity here to work on our specialty beers here,” Hall said. “It costs a lot of money, that’s a real big concern. But from a quality standpoint, probably not. We wouldn’t be doing it if we thought there was [a problem with the quality].”
Brett Porter, Goose Island’s head brewer, said that the company has found a fascinating and frustrating problem as demand has intensified.
“I’ve never heard a distributor threaten to remove a beer from shelves before because they couldn’t get enough,” Porter said, but it’s happening to Goose Island now, necessitating their choice to expand elsewhere. “We have to balance our desire to brew everything here with our need to satisfy demand. We want to embrace Chicago, but we can’t make enough beer to do so.”
But Porter said that in some ways, the move to New Hampshire might have a silver lining.
“Portsmouth’s better suited to making Honker’s and IPAs than our plant,” Porter said.
Nevertheless, there’s been a learning curve as they’ve tried to make the beer perfectly in another location. Every brewery is different, Porter said, and they’ve been trying to deal with that.
“We’re on our fifth iteration of IPA in New Hampshire, and the last batch fooled most people,” Porter said. “It’s a bit like a translation of a French novel to English. Even though we’ve been using the exact same malts, the beer has been coming out a little lighter — that’s the kind of thing that happens.”
But Porter said he thinks the company’s end goal is to bring production back to Chicago. After all, this is a company that’s long touted its use of Midwestern ingredients, and still runs — and innovates in — its original brewpub on Clybourn in Lincoln Park.
“At some point, maybe we’ll build another brewery in Chicago, and everything would come out of that,” Porter said. “Or maybe that becomes the 312 plant [Goose Island’s extremely popular wheat beer] and the older plant becomes the specialty beer plant.”
Building a new plant is an expensive venture, though. So in the meantime, they’re adding a few brewing tanks on the outside of the Fulton Street plant. It’s just another way they’re adding capacity.
So despite outsourcing some production, Hall said he’s committed to the city that birthed the company, and whose name graces every bottle in letters almost as big as the brand itself.
“It’s been an unbelievably good roll. We’re a Chicago company and we’re thrilled to be here and thrilled to be facing these decisions,” said Hall.
17 Feb. 2011

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