Indiana craft breweries feel pinch with hops shortage

INDIANAPOLIS (WISH) – The craft beer industry is booming as more Hoosiers develop a taste for flavorful brews. It’s such a boom some are calling it critical mass.

There are ingredient shortages and likely price hikes. However, there could be a solution.

Sun King Brewing Company opened five years ago. It’s now one of Indiana’s 84 craft breweries. 40 of those opened in the last two years and the Brewers of Indiana Guild expect that number to climb to at least 100 by the end of 2014.

Dave Colt, co-found and head brewer of Sun King, says this is fantastic for the craft beer industry, but it’s creating growing pains. Because of all of this immediate growth, there’s a hop shortage. Hops are craft beer’s key ingredient.

“This is where the magic happens. It’s sort of like behind the scenes at Disney, but for beer and adults,” said Colt as he guided 24-Hour News 8 on a brewery tour.

Over the past five years Colt says Sun King has grown by at least 5,000 barrels per year.

Hops give beer its bitterness, flavor and aroma, which are three essentials of craft beers.

“We add hops at three different times during that boil for bitterness, flavor and aroma,” said Colt.

Three Hammers Farms is one of, if not thee, first Hops farm in Indiana.

“On that side of things I started doing research about do they grow them in Indiana? Have they ever grown them in Indiana before?” said farmer Ryan Hammer.

In just three years Hammer’s farm went from two rows of 150 plants to 8 rows, which takes up a quarter of an acre. The demand is there.

“It’s ‘how much more can we get?’ It’s not a matter of, ‘well I don’t know,’” said Hammer.

It takes three years for a hops vine to produce a full yield. That’s why breweries contract out years in advance.

“As there are more breweries and you’re wanting to try more hop varieties, it’s harder to get your hands on the volume that you would need to make a large enough batch to say, handle Indianapolis,” said Colt.

If breweries use up their contracted inventory, they have to spot buy. That gets expensive. Since hops are in such high demand it’s finally catching up to even the established breweries like Sun King.

“We’re going to have to increase prices,” said Colt.

The USA Hops organization says it’s a bubble. Once farms are yielding new brewery contract demands, farmers, brewers and drinkers can sit back and toast to an affordable cold one.

“That’s the great thing about the craft beer industry and I’d like to see the hop industry modeled after that too, is we’re all in it together,” said Hammer.

Colt says 5-years ago the price of hops was about $4.50 a pound. Today, it’s nearly double and if brewers have to spot buy it can be even more costly.

The bottom line is Colt says beer prices will likely rise. However, he’s not sure when or by how much. They’ll level out when supply once again meets demand.