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Home / Articles / News / Local News /  Beer Fear
Rod Tweet
Second Street Brewery President Rod Tweet says crop failures have affected his beer business.

Beer Fear

Hops shortage threatens elixir

August 6, 2008, 12:00 am
“At night I get paranoid about locking up the walk-in cooler.”

He knows it’s ridiculous, but Rod Tweet, president of Second Street Brewery, also knows there’s a worldwide hops shortage, so you can never be too careful.

In fact, it even takes a little pleading before he allows a five-minute photo shoot inside the cooler, where he keeps boxes full of hops—the plant partially responsible for giving beer its flavor.

The hops shortage, Tweet says, is the result of a “perfect storm” of bad circumstances. Hops has never been a very profitable crop, so over the past few years, farmers have devoted less acreage to it. Last year, there were hailstorms in hops-heavy Slovenia and crop failures worldwide. China, meanwhile, has become a bigger player in the world beer market and has driven up demand. There also is the dismal state of the American dollar, making it difficult for small US breweries to compete with European companies.

“It was sort of mass hysteria,” Tweet says, as he describes discovering the hops shortage last October. As he talks, Tweet walks through Second Street’s brew house, a high-roofed, small manufacturing facility adjacent to the restaurant. Large metal vats and various tanks, some silver and some copper-colored, sit all over the room with pipes running between them. It smells kind of like a bakery.

“The price has been too low for a lot of years and the farmers have been replacing them with more profitable crops,” Tweet says. “At the same time, beer consumption’s been going up.”

New Mexico ranked 13th  per capita in beer consumption last year, according to the Washington, DC-based Beer Institute. The year before, it was ranked 30th in beer production.

Last fall, when Tweet realized he couldn’t get certain hop varieties he wanted, he began buying whatever was on the “spot market”—an industry term that means “whatever the brewers have.” He came up with new beers (Second Street makes roughly 30 different varieties per year), and raised the prices from $4 to $4.50 per pint.

He says the price increase was unavoidable. The 44-pound boxes of hops he was hesitant to have photographed jumped in value from $200 to $900 in just one year. Second Street uses approximately 2,000 pounds a year.

That’s small potatoes, er, hops, compared to what’s used at Santa Fe Brewing Company. Nick and Alana Jones, husband-and-wife beer makers, say the Brew Co. uses between 40,000 and 50,000 pounds of hops per year.

What’s more, they can’t go to the spot market; the Brew Co. makes only a few kinds of beers, and those have to be the same year-round.

“There are scraps” of the hop varieties the company needs, Alana, 25, says, sipping a beer. “I have to fight tooth and nail for them.”

When she heard rumors about the shortage, Alana says, “I felt like the entire future of the brewery was basically resting on my ability to get hops for us.” The 20-year-old business distributes beer in six states, and it is the largest brewery in New Mexico.

Hops, as a crop, takes two years to mature, so the future is uncertain, but hops purveyor Ralph Olson, owner of Oregon-based Hopunion LLC, is cautiously optimistic. “The coming year will be tight,” he says, speaking via cell phone while driving up the Oregon coast. “But it’ll be better.”

Olson, who says he has had to extend his credit line twice, says while the Chinese and Europeans have been calling, he prioritizes selling to small American businesses like Second Street.

“I try to take care of my guys first.”

 

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