The Future of Beer

Wall Street Journal Presentation

Patrick OldsDrew RichardsJordan RowseyLee Saunders

Hops: What they are

Beer is made of three main ingredients: Water, Barley, and Hops.

Hops add flavor and aroma

More hops in a beer makes the beer more bitter and bolder.

Hops are primarily grown: Hallertau region

of Germany

Willamette and Yakima valleys in the United States.

Shortage of Hops

10,000 acres of hops world-wide were lost this past year Poor weather conditions

Growing demand in Asia

Reduced acreage due to real-estate development

Shortage on hops caused an increase of price Price per pound went from $3-$5/lb to

around $20-$40/lb

Smaller, independent breweries were forced to raise retail prices

Sierra Nevada raised price of 6 packs by 50 to 60 cents

Along with the shortage of hops, there is increase in demand for them Bolder beer styles have become more

popular recently

In the past year, 47 of the top 50 brewing companies have grown in production to keep up with demand

Brewers – what they are doing

Brewers are resistant to reducing products containing hops

Recipe changes is one alternative

Substituting hops is effective in conserving hops with greater demand

The bitter hops are easier to substitute than the aroma hops

Some “hoppier” beers are only produced in limited quantities because of the price of hops

Companies are creating new beers, which rely less on hops

Chocolate-OatmealStout

In review…

The future of beer seems pretty secure Though hops are lacking, industry

continues to grow

8,500 acres of hops planted in U.S.

11,000 acres worldwide

Hops planted are bitter hops Don’t reach full maturity for 3 years

Don’t do as much to give unique taste

Altered recipes Less diversity in styles

“Things are predicted to get a little better … but it’s definitely not in the clear.”

--Mr. Koch of Stone Brewing Co.