Is craft beer and hops production declining too?

[sibelman]

Much has been made elsewhere on HBT about closing of LHBS retail storefronts, and the possible decline of the homebrewing hobby. Today I read that craft brewing and beer drinking are also declining. From a letter to the editor of oregonlive.com, aka The Oregonian:

The Northwest is unique in that we produce nearly all of America’s hops. Washington, Idaho and Oregon are the top hop producing states. Sadly, as we begin hop harvest this month, these local farmers throughout Willamette Valley are struggling as craft beer sales slump.

According to the U.S. Department of Agriculture, hop acreage decreased nationally by 18% from 2023, and that’s true for Oregon hop growers, who are also down 18% from last year. Oregon is the third largest hop producing state; hop acreage has gone from more than 7,000 acres before 2022 to just 5,500 acres.

This is happening in large part because people are drinking less beer. Craft beer sales are down by 2.1% halfway through 2024, according to the Brewers Association.

 

[day_trippr]

Yes, I've been noticing similar stories over the last couple of years as beer sales have contracted and breweries have closed down. Not good for the industry - or us...

 

[Bassman2003]

Yes, a trend shift seems to have taken place. Maybe too much choice? Not enough brewing expertise? Too many crazy overblown non-sustainable styles? Who knows. Sadly, inflation takes a toll along with lower demand = higher prices.

It is surprising that homebrewing is following the trend as when I started brewing, choice and cost were the main motivators. Seems like cost would be a big one now but it is not playing out that way.

 

[sibelman]

lower demand = higher prices.

This inversion of the "law" of supply and demand is curious. Maybe say more?

 

[Bassman2003]

It seems to me that when demand drops, companies have to make up the revenue shortfall and often raise prices which then leads to closures. Basically it does not work, but they are starved for revenue and try it. Overall, the market might experience lower prices when demand goes down and competition does its thing, but on an individual basis, this behavior exists.

I find quite a bit out of step with the ubiquitous Law of Supply and Demand. Most of it on the 'prices going up' side of things!

 

[bike2brew]

Much has been made elsewhere on HBT about closing of LHBS retail storefronts, and the possible decline of the homebrewing hobby. Today I read that craft brewing and beer drinking are also declining. From a letter to the editor of oregonlive.com, aka The Oregonian:

The Northwest is unique in that we produce nearly all of America’s hops. Washington, Idaho and Oregon are the top hop producing states. Sadly, as we begin hop harvest this month, these local farmers throughout Willamette Valley are struggling as craft beer sales slump.

According to the U.S. Department of Agriculture, hop acreage decreased nationally by 18% from 2023, and that’s true for Oregon hop growers, who are also down 18% from last year. Oregon is the third largest hop producing state; hop acreage has gone from more than 7,000 acres before 2022 to just 5,500 acres.

This is happening in large part because people are drinking less beer. Craft beer sales are down by 2.1% halfway through 2024, according to the Brewers Association.

Good article and quick read. I don't think there's cause for doom and gloom. After all it's not like climate change where society has been in denial for 60 years.

 

[Kickass]

I worry for the hop producers most. The rapid development of all these “NEIPA” hops seems to have set an unreasonable and unrealistic expectation of the market. I can’t even imagine how much money it requires to bring a new hop to market.

What’s the business model going to look like when there’s no desire for the newest bright berry/candy hop that tastes similar to the last bright berry/candy hop? Furthermore, when the ludicrous amount of hops for the popular beer style loses favor, this could have compounding effects.

I hope I’m wrong, but I can see a very plausible series of events to do serious harm to another sector of this beloved hobby.

 

[bike2brew]

Great points to refect on. I imagine producers will simply reallocate acreage to grow hops based on market trends. There will always be a place for C hops and other traditional varieties while some of these others will come and go. The process for developing new varieties and bringing them to market is well described in For the love of hops and I expect is not done whimsically without signifcant calculation. The closing of LHBS is another matter entirely and major inconvenience unless they find ways to adapt to the increasingly significant "on-line" market. My LHBS does not respond to text inquiries about product availability, etc. Still I am willing to drive an hour (1 way) every couple of weeks for yeast and hops as temperature sensitive ingredients I am not willing to trust to shipping and flat rate USPS snail mail. On the other hand I have generally dropped Northern Brewer for their inconsistency and shipping costs. I had a grain order where the cost of shipping was more than the price of the grains. Needless to say my LHBS got the order even with the round trip drive and 9% sales tax. Its a marketplace economy and those willing to adapt and improve their products and services will stay in business.

 

[elf_brewery]

Our local news station said that more people are preferring cannabis over beer...

 

[Bramling Cross]

The year-on-year picture may seem bleak and make great headlines, but the ten, twenty, and thirty year trends remain overwhelmingly good.

The beer industry has been nuts for a very, very long time. Prices have been getting out of hand and a correction is inevitable, but I doubt it'll be anything like the great hop shortage we had, what is it now?, fifteen years ago?

Damn I'm old.

 

[bike2brew]

Our local news station said that more people are preferring cannabis over beer...

That was true back in the 70's as well. I generally preferred ice tea to go with my smoke. Really didn't fully embrace craft beer on its own terms until the 90's when my wife brought us some Pete's for a backyard cookout

 

[MaxStout]

I'm seeing less shelf and fridge space devoted to beer in liquor stores these days. More wines, hard seltzers, ciders, pre-mixed cocktails, etc. There just isn't enough room for the hundreds of craft brews in any store.

 

[Tony B]

Maybe just my twisted inner ramblings but I remember hearing that hops had been produced beyond consumption to a toll of about a 2 year surplus. Also, as for craft beer sales being down, possibly just the ebb and flow of the industry. Hopefully just survival of the fittest.

 

[KangerBrew6]

Inflation and cost of living always is going to have an impact on "niche" industries. Here in Australia, there are many craft breweries for sale or in administation (broke). The big boys are always going to call the shots when the going gets tough.

 

[bwible]

Inflation and cost of living always is going to have an impact on "niche" industries. Here in Australia, there are many craft breweries for sale or in administation (broke). The big boys are always going to call the shots when the going gets tough.

Yup. Over the years we’ve seen many breweries go under - some small and some not so small like Anchor. I have a collection of pint glasses which includes about a dozen from places that no longer exist.

There has also been this madness of one or two giant conglomerates buying up everything and everybody. That was the case with Anchor, bought up and run into the ground and left to rot. And there’s really no competition when everybody and everything is all owned by one entity.

We’ve seen a number of small places try and fail. It’s almost a regular occurrence to see 1 barrel systems and equipment listed for sale from failing places.

Yes, I agree the market is over saturated. New fads come and go. Theres only so much demand and people can only drink so much.

I think it is a generation thing, too - younger people are not taking to beer today at all, let alone craft beer. Like was said earlier, many are buying weed now and more so since its now been “legalized” in more places. (Though not really.) Its never been my thing - I can’t stand the stench of it, which is 10 times worse today - but its another choice some are opting for. I don’t know enough about it, but even “legalized” I know its not cheap. And with the economy of the last couple years people don’t have as much disposable income either way - buying pot or not. When people are struggling to buy gas and groceries and having to use credit cards for monthly expenses then they are buying less of everything - including beer.

 

[Willy]

Much has been made elsewhere on HBT about closing of LHBS retail storefronts, and the possible decline of the homebrewing hobby. Today I read that craft brewing and beer drinking are also declining. From a letter to the editor of oregonlive.com, aka The Oregonian:

The Northwest is unique in that we produce nearly all of America’s hops. Washington, Idaho and Oregon are the top hop producing states. Sadly, as we begin hop harvest this month, these local farmers throughout Willamette Valley are struggling as craft beer sales slump.

According to the U.S. Department of Agriculture, hop acreage decreased nationally by 18% from 2023, and that’s true for Oregon hop growers, who are also down 18% from last year. Oregon is the third largest hop producing state; hop acreage has gone from more than 7,000 acres before 2022 to just 5,500 acres.

This is happening in large part because people are drinking less beer. Craft beer sales are down by 2.1% halfway through 2024, according to the Brewers Association.

Back in the day... "My drinking years?", circa 1976-1990, there was about zero craft beer interest, maybe a regional beer but no craft beers. And everything was American lager (20-40% corn fermentables ) ... There was Guinness, Lowenbrau, St. Pauli , Becks, Pilsner Urquell, and a few other foreign beer offerings. An IPA? No one even had a clue.

So while the shrinkage is painful, I still expect a robust craft beer market and for home brewing to continue just fine. The beer industry goes from boom to bust every 30-50 years since forever. Beer is too good to ever die.

 

[bike2brew]

Well stated, my success in HB has an effect, albeit negligible, on tap and retail sales @ my local and grocery store. As noted in a previous thread my favorite beers are the ones I brew

 

[stevehaun]

There is a ton of bad craft beer out there that costs way more than macros. Personally, I am not going to spend 9 or 10 dollars for a pint of beer that may be crap. I rarely drink craft beer anymore. I understand the falling demand.

Poor quality + high prices = failed business

 

[MaxStout]

There is a ton of bad craft beer out there that costs way more than macros. Personally, I am not going to spend 9 or 10 dollars for a pint of beer that may be crap. I rarely drink craft beer anymore. I understand the falling demand.

Poor quality + high prices = failed business

This.

I can't justify paying $8-$9 for a mediocre pint, or $12-$15 for a mediocre 4-pack. I still go to local breweries, but I've whittled it down to a few that consistently make top-notch beer. For packaged beer, I have some faves, and try some I see posted on the What Are You Drinking Now? thread.

A bit of an aside... a while back I was talking with the head brewer and co-owner of a good sized (15 Bbl) local brewery, and I asked him why they didn't can beer to sell in stores. He responded with a couple good points:
1. The brewery does quite well with taps, growlers/crowlers and merch, and it's a destination brewery where people come for music, games, food trucks, special events, etc. A 15 Bbl batch of their beers will kick in a month or so.
2. He said he didn't want their beer on shelves, next to and competing with hundreds of other beers, lost in the shuffle. He said most beer buyers tend to gravitate to their favorites, and don't often try new things. If a buyer usually gets Surly, Stone, Bell's, that's what they come back for.

 

[balrog]

I think it is a generation thing, too

Yeah, my kids never took to my homebrew, preferring my apfelwein or even liquor based mixed drinks over ales.

 

[bike2brew]

This.

I can't justify paying $8-$9 for a mediocre pint, or $12-$15 for a mediocre 4-pack. I still go to local breweries, but I've whittled it down to a few that consistently make top-notch beer. For packaged beer, I have some faves, and try some I see posted on the What Are You Drinking Now? thread.

A bit of an aside... a while back I was talking with the head brewer and co-owner of a good sized (15 Bbl) local brewery, and I asked him why they didn't can beer to sell in stores. He responded with a couple good points:
1. The brewery does quite well with taps, growlers/crowlers and merch, and it's a destination brewery where people come for music, games, food trucks, special events, etc. A 15 Bbl batch of their beers will kick in a month or so.
2. He said he didn't want their beer on shelves, next to and competing with hundreds of other beers, lost in the shuffle. He said most beer buyers tend to gravitate to their favorites, and don't often try new things. If a buyer usually gets Surly, Stone, Bell's, that's what they come back for.

Yes, same here. Largely limited to places where we dine with good beer and vibe. Our HB club meetings rotate among locals so opportunity to explore available offerings.

 

[Pehlman17]

I heard a few brewers on a podcast recently talking about how they see potential of the industry in general shifting back toward the old brewpub model. I think so many breweries tried to jump on the bandwagon and saw the production/distribution model as the way to go. The market has very much incentivized a growth-at-all-costs mindset for the past decade. Covid obviously threw a wrench in things as well. A few breweries near me have actually been closing their taprooms to focus solely on production and packaging (a reaction to Covid I believe), but I'm curious in the long run how that decision will play out. I can see things going full circle to smaller-scale direct-to-consumer being the ideal model, at least for newer breweries trying to break in. And, I agree with much of the sentiment in a comments above that the quality has to be there. We are no longer in the days where some schmuck with a bit of financing can just start a brewery because he thinks it's cool and to just expect success.

 

[Northern_Brewer]

I think you've got to be a bit careful with this stuff because whilst supply and demand are ultimately linked, the balance between the two is being affected by big factors on both sides of the equation that are changing things on one side independently of what's happening on the other side. So it's complicated, and I wouldn't draw the simplistic conclusions to be found in a lot of the recent media coverage.

At its heart is the US hop industry screwing up its response to Covid - too many were stuck in the "growth" mindset to a) remember that hops are cyclical and b) understand what was happening to their customers. So they kept producing and ended 2021 with a huge surplus of hops, whereas eg the UK industry took immediate measures to eg string fewer bines and ended up being roughly in balance over 2020/21. One reason is that the UK drinks far more in pubs (it's only in the last 10 years or so that home drinking overtook the on-trade) whereas US draught sales are almost irrelevant (~10% of total beer) and so there was far more immediate feedback when pubs were locked down.

Then you have agronomic factors like the bad harvest last year (particularly for some varieties like Centennial in the PNW) - which didn't dent the surplus of US hops that much, which has forced the big companies to finally face facts and cut acreage this year. But you can play around with statistics - things might look different if you look at lbs produced rather than acreage, and talking about a slump in draught sales ignores the fact that draught is such a small proportion of US beer. It's comlicated.

 

[Pehlman17]

I think you've got to be a bit careful with this stuff because whilst supply and demand are ultimately linked, the balance between the two is being affected by big factors on both sides of the equation that are changing things on one side independently of what's happening on the other side. So it's complicated, and I wouldn't draw the simplistic conclusions to be found in a lot of the recent media coverage.

At its heart is the US hop industry screwing up its response to Covid - too many were stuck in the "growth" mindset to a) remember that hops are cyclical and b) understand what was happening to their customers. So they kept producing and ended 2021 with a huge surplus of hops, whereas eg the UK industry took immediate measures to eg string fewer bines and ended up being roughly in balance over 2020/21. One reason is that the UK drinks far more in pubs (it's only in the last 10 years or so that home drinking overtook the on-trade) whereas US draught sales are almost irrelevant (~10% of total beer) and so there was far more immediate feedback when pubs were locked down.

Then you have agronomic factors like the bad harvest last year (particularly for some varieties like Centennial in the PNW) - which didn't dent the surplus of US hops that much, which has forced the big companies to finally face facts and cut acreage this year. But you can play around with statistics - things might look different if you look at lbs produced rather than acreage, and talking about a slump in draught sales ignores the fact that draught is such a small proportion of US beer. It's comlicated.

Absolutely. There are so many other factors to consider. The mere fact that beer is an agricultural product I believe is totally at odds (for lack of a better term) with the past assumptions that growth was essentially the norm. Trying to pair that with variation in consumer demand has to be an extremely difficult thing to navigate.

 

[Agent]

I posted last month about the drops in 2024's hop crops, and its amazing to think thats with very hop-intensive styles being all the rage.

 

[stevehaun]

Yet no brewery is dropping the price of a pint...

 

[mac_1103]

they see potential of the industry in general shifting back toward the old brewpub model

When did the brewpub model grow old?

 

[Pehlman17]

Just repeating what I heard. Haha. Maybe I should have said "the ol' brewpub model".

Edit: Dumb jokes aside, I assume what they meant was more of a focus on local communal establishments (not like there isn't one now) and less of a focus on distribution. Bringing the people to the beer as opposed to sending the beer to the people, so to speak.

 

[mac_1103]

Yeah, distribution is hard.

 

[AmarikinBrew]

Yup. Over the years we’ve seen many breweries go under - some small and some not so small like Anchor. I have a collection of pint glasses which includes about a dozen from places that no longer exist.

There has also been this madness of one or two giant conglomerates buying up everything and everybody. That was the case with Anchor, bought up and run into the ground and left to rot. And there’s really no competition when everybody and everything is all owned by one entity.

We’ve seen a number of small places try and fail. It’s almost a regular occurrence to see 1 barrel systems and equipment listed for sale from failing places.

Yes, I agree the market is over saturated. New fads come and go. Theres only so much demand and people can only drink so much.

I think it is a generation thing, too - younger people are not taking to beer today at all, let alone craft beer. Like was said earlier, many are buying weed now and more so since its now been “legalized” in more places. (Though not really.) Its never been my thing - I can’t stand the stench of it, which is 10 times worse today - but its another choice some are opting for. I don’t know enough about it, but even “legalized” I know its not cheap. And with the economy of the last couple years people don’t have as much disposable income either way - buying pot or not. When people are struggling to buy gas and groceries and having to use credit cards for monthly expenses then they are buying less of everything - including beer.

What a con"DUM"drum: lotsa good beer makes you fat.
Super weed gives you super munchies, makes you fat!