Nation's Largest Craft Brewery Sharing Hops

Shortage of hops has left smaller brewers unable to buy the key beer ingredient, but Boston Beer Co., the maker of the Samuel Adams brand, agreed to share 20,000 pounds of its hops.

DES MOINES, Iowa (AP) -- A shortage of a key ingredient in beer has shown that even business competitors can come together over a cold one now and then.
That happened last week when the nation's largest craft brewery, Boston Beer Co., the maker of the Samuel Adams brand, agreed to share 20,000 pounds of its hops with craft brewers throughout the country, including two in Iowa.
An extended worldwide shortage of hops has left smaller brewers unable to buy the important perennial flower that adds some of the bitterness and aroma to beer.
About six weeks ago Boston Beer sent out notifications to small brewers that it wanted to help them by making available some of its hops at cost. The company said it received 352 requests totaling about 100,000 pounds, much more than it could give away.
''It shows how great the need is and I felt really bad,'' said Boston Beer Co. founder Jim Koch. ''We even fudged it a little and went over the 20,000 pounds, but we just don't have the capability of filling this hole ourselves.''
Koch said the company looked at its supply of hops and decided to live up a long established culture among craft brewers.
''We view each other as colleagues not as competitors,'' he said.
Koch said the shortage became acute last year when the 2007 hops crop came in below average, the third bad season in a row for hops. In addition, increased beer consumption has increased demand for hops, he said.
The shortage has left the smallest craft brewers most vulnerable because they typically don't have the long-term contracts with growers.
''We looked at our hops inventories and we said we can take some risk,'' Koch said. ''If the 2008 harvest is OK we'll still be covered.''
The hops shortage was serious enough that some craft brewers were at the point of going out of business, said Paul Gatza, director of the Boulder, Colo.-based Brewers Association, a nonprofit trade group.
''To some degree it kept some people afloat that weren't able to get hops,'' he said.
He said the hops shortage will plague the industry for another year or more.
In random drawings, Boston Beer selected 108 brewers to receive the 20,000 pounds of hops it could spare.
Among the recipients was Worth Brewing Co., which claims to be the smallest registered brewery in the country. It bought 88 pounds of hops.
Peter Ausenhus and his wife, Margaret Bishop, opened Worth Brewing Co. a year ago in Northwood, a town of about 2,000 people near the Iowa-Minnesota state line. The brewery is in an 1887 building in the town's central avenue historic district.
They make 40 to 50 gallons of beer a week in 10-gallon batches and sell it on Wednesdays, Fridays and Saturdays in The Tap Room, a storefront room in the same building where the beer is made. Specialty beers and a variety of flavors, aromas, colors and textures are offered for sale.
Ausenhus said his 88 pounds of hops will last him a year. He'll pay Boston Beer's volume contracted cost, about $6 a pound, much cheaper than the $25 to $30 a pound he'd have to pay on the open market if he could get the German hops Boston Beer is providing.
''It's a great savings, but more than the money, I was not able to get any imported hops this year. I had to reformulate all of my recipes. There's domestic hops but if you're making a German lager you'd prefer to use a German hop rather than an American-grown German variety because there are differences,'' he said.
Ausenhus said the hops sharing illustrates the camaraderie that exists among craft brewers large and small.
''It's a fairly friendly open industry,'' he said. ''I don't know if maybe they just feel they're big enough they don't have to worry, but I think that there is a genuine interest and they know that a thriving craft brewing industry probably helps them too, and certainly it's just a generous gesture on their part as well.''
Craft brewing is a growing segment of the beer industry. Its sales made up only 5.9 percent of the total beer market in retail sales in 2007, but the sector grew by about 12 percent in volume last year and 16 percent in dollars, according to the Brewers Association.
The 1,449 U.S. craft breweries last year sold $5.7 billion worth of beer, the association said. U.S. beer sales last year totaled about $97 billion.
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