Price of Beer is Gonna Rise!

NEWS: Shortages of the two main ingredients in beer - barley and hops - are going to have a major impact on prices in the near future. It’s gonna go up. Way up.

The price of barley and hops has increased by as much as 500 percent in some instances. Brewers said the average cost of a six-pack of domestic beer would likely rise about a dollar by the end of the month, just a few days before the Super Bowl. Retail tracking services say beer sales traditionally rise as much 15 percent in the two weeks before the game.

Prices in some pubs have already risen anywhere from 25 to 75 cents a pint.

Hits Small Brewers the Hardest

In September, Peter Martin, head brewer at Brown’s Brewing Company in N.Y., paid $4 for a pound for hops. By late October, he said, it was $50 a pound.

“It’s a big deal, and it’s something that you have to think about every day because it’s an ingredient. I can’t just pick up the phone like I used to and say, ‘Hi, I need 45 pounds of this,’ ” Peterson said.

Just a few weeks ago, George Peterson, owner of Central Coast Brewery in San Luis Obispo, Calif., spent $160 to brew a batch of beer equal to eight kegs. Last week, he was spending a staggering $920 per batch.

“As a smaller brewery, it’s hard to find the hops that I need because some of the bigger guys have them,” said Kent Wheat, brewmaster at Los Gatos Brewing.

Large Brewers still have supplies

Large brewers - like Anheuser-Busch, which makes many of the most popular brands in America, including Budweiser, Bud Lite, Michelob, Busch and Rolling Rock - can more easily absorb the higher costs because they negotiated longer-term contracts when prices were lower, locking up supplies that are now out the reach of many microbreweries.

The Cause of the Problem

Ethanol based fuels might be part of the problem. High demand for corn-based ethanol has persuaded many farmers to devote more of their fields to corn and less to barley, creating a shortage and the resulting higher prices.

“It’s become more attractive to grow corn, so farmers have made a choice to do that,” said Ronald Manabe, brewmaster at Tied House.

Rain in Europe and drought in Australia also withered barley crops. Summer prices for German spring barley rose 50 euros a ton, for example, nearly 20 percent over the previous year’s price.

Changing Recipes?

Some brewers are crafting beers that rely less on hops for the flavors, but the solution is far from perfect. Hops are important for more than flavor - they are also the main preservative in many beers.

If prices remain high and supplies remain short, consumers will not only have to get used to blander beers, but they also won’t be able to keep them in the refrigerator for long.

“If it got to $40 a pound, you’re going to see some hop-free beers, and it’s not going to [have] a ‘born on’ date,” he said. “It’s going to be ‘drink by tomorrow.’ ”

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