“No beer without hops”: existential fears among brewers and hop farmers

Created: 11/28/2022, 5:40 p.m

Hard times are brewing over hop growers and beer manufacturers.

In particular, the high prices for energy are hitting the industry hard.

© Sven Hoppe /dpa

Hard times have brewed over the German beer industry.

Insiders fear that every fifth company will go bankrupt in the long run.

Munich – Increasing costs that cannot be passed on are driving beer brewers and hop growers into a corner.

The farmers also have a miserable harvest, as industry representatives said on Monday in Munich.

In view of the difficult situation, there is a risk that both companies will die in the coming years.

Adolf Schapfl, President of the Association of German Hop Growers, said he expects around four to five percent of the hop farms to give up this year.

And the difficult situation will continue for a few more years.

In the long run, it could affect every fifth company.

Falling sales hit brewers hard

There are no such figures for the brewers, but the situation is bad here too.

Many companies have their backs to the wall, says Walter König.

He is managing director of the Bavarian Brewers' Association, but emphasized that the situation is similar nationwide.

Actually, the brewers should raise the beer prices by two, three or even five euros per crate, he said.

But that is not enforceable on the market - among other things because there is significant overcapacity and falling consumption.

Beer sales in Germany have been falling for years.

According to the Federal Statistical Office, last year it fell by 2.2 percent to around 8.5 billion liters.

Since 1993, the minus has been almost a quarter (23.9 percent).

The reason for this is often the unhealthy image of beer - after all, according to new findings, one type could even have positive effects on intestinal health.

Summers that are too hot and dry cost hop farmers millions

The first companies would already reduce capacities and close locations, said König.

Even entire breweries would have to give up after hundreds of years, he reported.

There were fears of the same during the Corona crisis, but then it didn't get that bad because some of the companies went to their own substance.

But now you have "reached the end of the substance" and many have to make the decision to turn the key and quit instead of going into even more debt.

For hop farmers, the dry and hot summer still resulted in a decidedly poor harvest in Germany.

34,406 tons mean a decrease of 28 percent compared to last year.

According to Schapfl, this resulted in around 88 million euros in lost income.

At the same time, there are additional costs of 46 million euros due to increased costs - including energy and fertilizer.

Altogether, 134 million euros are missing from the coffers of the hop growers this year – with typical annual yields of 300 million euros.

"That's the drama of the matter," said Schapfl.

No beer without hops – hoping for cooperation between farmers and brewers

Selling the hops at a higher price is hardly possible, because there are usually long-term contracts.

One can endure a difficult year, maybe another, said Schapfl.

But he doesn't know whether the planters will last until 2025 - that's how long many contracts run.

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The proportion of hops in the price of beer is small.

In order to absorb the 46 million euros in additional costs in the current year, a crate would have to be around four cents more expensive, says Schapfl.

But the brewers are already struggling with the increased costs, which they also have.

Nevertheless, König signals a certain willingness to talk.

You have to work together, he said.

After all, it also applies: "Without hops, no beer."

Look for climate-resistant hop varieties

Schapfl sees climate change behind the poor harvest.

According to the hop farmers, irrigation should help on the one hand, for which it is often difficult to get permits, and on the other hand new, climate-resistant hop varieties, which often also get by with fewer pesticides.

According to Schapfl, the hop farmers are primarily waiting for the brewers to be willing to use the latter.

But a change in the ingredients is not trivial, as Brauerbund Managing Director König explained.

It takes time and lots of testing.

This is not only a time but also a cost factor.

But even when using the new varieties, one can assume "that the beers will not change their character over time," he assured.

"That's the art of brewing.

We have master brewers for that.”