Hop Industry Growth
9:26 am
Wed October 2, 2013

Northwest Craft Breweries Keep Pouring Into The Market, But Is There A Bubble?

Originally published on Tue October 1, 2013 4:48 pm

Northwest farmers are wrapping up this year’s hop harvest at a time when the craft beer industry is seeing huge growth.

The change in Americans’ beer-drinking habits means hop farmers are selling more of their crop to smaller breweries than ever before. But all this success begs the question: is there a craft brew bubble?

Patrick Smith is a fourth-generation hop grower. He guides me inside his family’s hop drying plant. Imagine a grocery store filled with nothing but hop beds two-and-a-half-feet deep.

Massive heaters blow air up through the bright-green hops.

"It’s pretty humid," Smith says. "We’ve got to dry off tens of thousands of pounds of moisture in each one of these beds.”

Smith says he uses some of the same technology his grandfather did. But the customers are very different, and so is the product.

His family used to grow mostly alpha hops to extract a bitter-oil for large-scale breweries. Now, Smith’s family grows mostly aroma hops for craft breweries. Those are less bitter and have more complex flavors.

“The United States hop industry is rapidly shifting acreage away from alpha hops to aroma hops to meet that growing demand,” explains Smith.

Get this: In 1978 there were 48 breweries in America. Now, there are 2,600 breweries.

Smith says, he’ll see where the family stands a few years down the road, "but for now the future of craft brewing looks bright. And what’s good for the craft brewer at least in the last few years has been good for the hop grower – We look forward to continued good times in both of those industries.”

The Smith family thinks so much of the craft brew business they’ve started their own -- right on their hop farm. It comes in cans, not bottles.

Smith’s sister, Meghann Quinn, says they can’t keep up with demand since opening in April.

“We have two more fermenters coming they will actually arrive in about two weeks," she says. "That will actually double the amount of beer we can make out of this facility, which will be good.”

But will the growth of craft breweries come to a head? Julia Herz with the national Brewers Association says no, there’s still more room than supply.

“We get asked a lot should there be more breweries, and that would be like asking the national restaurant association if there should another restaurant down the street," Herz says. "And the answer is, of course. If they can make word-class product and differentiate themselves they absolutely will be able to service their customers.”

And that demand will have a lasting impact on the beer industry.

Joshua Bernstein is a New York-based writer and book author who specializes in beer. He says, younger consumers don’t tend to go back to traditional beers, after trying more-local craft brews.

“When you’re 21 you have a great IPA and you understand what a great beer is," Bernstein says. "You know, you can make your distinction. You want to have your Bud, or your Bud Light and that’s totally fine – but you understand what a quality beer is at a much younger age.”

Bernstein says just as with food, another top trend in craft brew is the careful sourcing of hops, barley and wheat. There are already several craft breweries in the Northwest growing their own ingredients just like Bale Breaker.

Patrons there can see the hop harvest happening just outside the brewery’s windows.

On the Web:

CraftBeer.com - Brewers' Association 

Hop Growers of America - official site 

Bale Breaker Brewing Company - official site 

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