Expect to get less beer for your buck
Posted by Bob Skilnik on October 6, 2007
There are already some grumblings in the Chicagoland area about one particular brewery raising its prices. Looks like more are to follow;
Sharpest rise in decades in cost of hops, barley hits smaller breweries the hardest
October 5, 2007 – 10:51PM
That six-pack of high-brow beer is about to come at a higher price, thanks to the sharpest surge in decades in the cost of the hops and barley that give each brew its distinctive taste.
Consumers could pay 50 cents to $1 more per six-pack in the coming months for many small-batch “craft beers,” as brewers pass on rising hops and barley costs from an unpalatable brew of poor harvests, the weak dollar and farmers’ shift to more profitable crops. Other makers of craft beers, the fastest-growing segment of the U.S. brewing industry, say they may eat the higher ingredient costs, which will pare their profits…
Craft beer makers have faced escalating costs over the past year. Prices for malting barley, which accounts for a beer’s color and sweetness, have jumped as farmers increasingly shifted to planting corn, which has been bringing higher prices because of high demand from makers of biofuels such as ethanol. The weak dollar has also made it more expensive for U.S. brewers to buy commodities from Europe.
The news worsened for craft brewers significantly in recent weeks. Firms that turn barley into brewing malt informed craft brewers of price increases ranging from 40 percent to 80 percent, and hops suppliers announced increases ranging from 20 percent to 100 percent, depending on the variety of hops.
The price of hops — which give beers their bitterness and aroma — has risen because of shortages across the globe, due in part to poor crops in Europe. Some European brewers are competing with American brewers for hops grown in the Pacific Northwest.