To Beer or Not to Beer. As Strange Brew was a loose parody of Hamlet, I thought I’d again peer crazily into the skull of poor Yorick, and try to divine the future. Let’s see if anything that happened last year can be used to predict what might happen in the beer industry in 2007. Here are five things I think will happen this year. Let’s see how I do a year from now. What are your predictions?
The hops and malt shortages will continue to plague the industry throughout 2008 and may even grow worse. It seems to me that the malt problem can be solved more easily than the hops problem, not that either are particularly simple. But the hop one seems as resistant as a mutated spider mite. A Hop field or yard takes three years to produce a full yield and nobody is planting new vines so once most breweries’ current hop contacts run out, then what? I’ve been joking that we’ll see more gruits in 2008, but it is going to get harder and harder for big hoppy beers to remain economically viable as hop prices triple and quadruple, especially on the spot market. Will 2008 be the year of the session beer? Perhaps not, but it may not be a good idea for brewers to make fresh hop beers for a couple of years while hops are in such short supply.
Beer prices will go up, that’s a fact not a prediction. The real question is whether or not beer consumers will be willing to pay more and, if so, how much more? The big beer companies can more easily afford to absorb some margin losses to keep volume up, and so I don’t think they’ll raise their prices as much as the smaller breweries will be forced to. Whether or not, or to what extent, that will effect the continued growth of craft beer remains to be seen but I believe it will slow the growth of craft beer at least until hop prices come down and availability is up. I think craft beer will continue its upward movement, but it may be closer to 8-10% this year.
Distributor consolidation will increase and will continue to make things difficult for small brewers trying to bring their beer to market or increase their distribution to new areas.
Mergers among big multi-national beer companies will continue and at least one or two big such announcements will be made in 2008.
Neo-Prohibitionists will continue to step up attacks on alcohol generally and to specifically and inexplicably target beer.