In news that won’t surprise any hop enthusiasts, 2018 was a big year for the modern IPA.
In an industry where the lupulin love continues to move toward all things juicy, fruity, and tropical, the continued ascension of Citra—now one of the country’s most beloved and harvested hop varieties—reflects broader changes in how hops find their way from the field to the glass. In its latest year-end report, the USDA shared a variety of figures that shed light on recent shifts in hop trends and production (and obliquely revealed how breweries are looking to keep beer drinkers excited).
Among the most notable takeaways was Cascade’s position relative to Citra’s. In July 2018, it was announced that Citra would set new records for planted acreage, surpassing arguably America’s most iconic hop variety for the first time. Cascade’s yield per acre remains higher than Citra’s, allowing the hop to remain the number one most harvested variety. Citra’s rate of pounds harvested, however, has grown nearly 58% in the last three years, while Cascade’s has fallen by about 10%.
Going back to 2013, the two hops have been on a graphical collision course: Citra's growth has soared, while Cascade is treading water at best.
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According to numbers tracked by the Brewers Association, these trends are reflected in its members’ brewing practices. Measured as a total percentage of pounds of hops used by BA-member breweries, Cascade use has essentially halved from 2016 to 2017, and stayed the same in 2018.
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Part of the reason for this shift, as noted by Stan Hieronymus in his monthly Hop Queries newsletter, is that Cascade, along with Centennial, had lower acreage in 2018 due to previous surpluses. In response to a Brewers Association member survey, 21.5% of BA-defined craft brewer participants reported a surplus in Cascade, and 14.3% said the same of Centennial.
Competition is also a factor. Tracking five of the most harvested hop varieties over the past three years shows two varieties coming on strong: Citra and Zeus.
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For most beer devotees, the increase in Citra probably comes as no surprise. Its distinct, bold flavor profile has become a core element in some of the most popular beers—made by some of the most beloved Pale Ale and IPA brewers—in the country. Its growth matches a rise in the appreciation of and demand for the juicy flavors drinkers have come to covet.
Zeus may not have been as expected. As an alpha/bittering hop, it doesn’t get as much attention as comparative aroma hops, the latter of which have been used in recent years to maximize the fruity flavors and aromas in today’s hop-forward beers. Because of changing tastes that now value flavor over bitterness, acreage has drastically flipped. Until 2013, bittering hops represented the majority of acreage in the U.S. In 2016, the ratio of aroma (78%) to high alpha (22%) acres was almost 4-to-1, both because aroma hops yield fewer pounds per acre and need more land to fulfill demand for the experience of the modern IPA.
While Citra fits the bill for a high-acreage, lower-yield hop, Zeus meets a current—and potentially increasing—demand for alpha varieties, which averaged about 2,700 pounds-per-acre in 2018. This doesn’t mean that double dry-hopped Zeus New England IPA is going to be the Next Big Thing, but rather that alpha stock will always play a role in America’s defining craft style.
Outside of trends within specific hop varieties, macro forces are also at play.
Since 2010, the average amount of hops per barrel used by Brewers Association members has grown 50%, from 1.05 pounds nine years ago to 1.58 pounds in 2018. It’s easy to see why.
According to IRI-tracked sales for its self-designated "craft" brands in grocery, convenience, and other stores, IPA has more than doubled in sales volume in the past five years, while Pale Ale has grown by 34%. Both styles require more hops by definition, and as more breweries produce beers with higher hop rates (an average New England IPA sits between 3-5 pounds per barrel) it's only natural that more aroma hops—and more popular hop varieties like Citra—are being sought.
In October 2017, Bart Watson at the Brewers Association examined the number of IRI-tracked brands within style categories, and found, at the time, 2,118 examples of IPA, as well as 610 Pale Ale brands. According to an analysis by the Brewers Association in May 2018, “hazy” or “juicy” beers saw particularly strong growth from April through May of last year.
In broad terms, brewers’ need for greater quantities of hops is reflected in the number of planted acres, which has grown by more than a third since 2008.
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Correspondingly, average yield has also taken a turn over the last two years, reversing a multi-year downward trend spurred by higher planting rates of aroma varieties, which traditionally provide smaller amounts of cones.
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What might be of greatest interest, however, is a declining average cost per pound. Hops vary in price based on variety, place of origin, and demand, and things might look much more dramatic on the spot market (including on platforms like the Lupulin Exchange). But according to USDA numbers (and not third-party sellers), the average price per pound in 2018 was $5.46, the second consecutive year of decline, falling from $5.60 last year. Prices reached a 10-year high in 2016 at $5.72 per pound, a far cry from when things stayed below $4 per pound from 2009-2014.
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For brewers or beer enthusiasts who recently spotted Galaxy hops for $45 per pound online at the Lupulin Exchange, however, those figures could seem like a far stretch from the high prices many are forced to pay for popular hops. In the BA’s hop survey among members, 10.4% said they had a shortfall in Galaxy, with Nelson Sauvin (7.2%), Citra (4.8%), Mosaic (3.6%), and Amarillo (2%) rounding out the five most desired varieties.
In a recent "State of the Hop" roundup in the Brewers Association's New Brewer magazine, BA Quality Ambassador Dick Cantwell shared the average amount members are spending per barrel on hops. Compare those figures (depicted on the right-hand axis, with a line) with the nationwide average via the USDA (depicted on the left-hand axis, with bars), and the contrast is stark. For many craft brewers who focus on hop-forward products and who continually see their costs creep up, that discrepancy likely comes as no surprise.
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This rise in costs is likely connected to the growing rate of U.S. brewers without hop contracts, which are used to lock in prices for the companies involved. Overall, BA members who responded to a survey reporting they did not have contracts more than tripled from 2016 (11%) to 2017 (36.7%). From 2011-2015, that figure had remained at or below 8%. Smaller breweries are also following suit; for BA members making under 2,500 BBLs a year, 54.4% of participants in the survey did not have contracts, up from 29% in 2016. It’s way down from figures around 90% from 2011-2015.
In an artificial way, this increases the average price of hops per barrel, as the spot market is more financially unstable due to supply and demand.
For a purely unscientific measure of what all this might mean for a brewery’s budget, we can extrapolate from these figures (plus additional data shared by Cantwell) to get an idea of annual hop expenditures. All figures in the below chart are pulled from the BA and USDA, with the exception of the 2018 number of BA-defined "craft brewers," which is estimated at 7,000 (a final tally will be released in early 2019). Keep in mind the brewer “spending” on the right of the chart represents costs via growers, not what could be paid on the contract or spot market.
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On face value, the average spend is going down, but cost would certainly fluctuate greatly depending on the kind of brewery we’re talking about. NEIPA leaders like Tree House or Trillium would necessarily spend far more to make juicy hop bombs compared to a brewery focused on traditional British or German styles, for example.
Still, the changing price of hops, especially the popularity of proprietary varieties like Citra, is exactly why the Brewers Association decided at the end of 2017 to invest $575,000 to support a new public hop-breeding program.
Breeding new hop varieties that are ready for use can take at least 10 years, but the program hopes to create a new variety that withstands diseases like downy and powdery mildew, and offers yields of at least 2,000 pounds per acre, all while being publicly available to farmers and breweries. In theory, this would offer a desirable hop for modern taste preferences at a lower cost than proprietary versions like Citra, Mosaic, or Simcoe.
Such is the way that things are going that the fervor for all things lupulin isn’t just about beer, but even extends as far as hop-flavored water. These days, it’s easier than ever being green—but it comes with a cost.
Words by Bryan Roth