Long Live the King? Hops, IPAs and Beer Business

hop cone with crown

I am no stranger to harping on the potential calamity of the craft beer bubble. Whether we’re reaching maturation for the market or over-saturation, there’s no denying something big is happening when we’ve got about 2,400 breweries in the U.S. with another 1,250 in the works.

So what’s recently happened here in North Carolina piqued my interest.

Recently, a local brewery, Roth Brewing (no relation), was sold, changed its name and promised a reinvention of its purpose. Gizmo Brew Works was born. To me, at least, it came as something of a surprise.

Roth Brewing – of FoeHammer barleywine and Forgotten Hollow cinnamon porter fame – was started and run by homebrewers. Their passion led them to going pro, but perhaps they just weren’t cut out for the business side of things. Presumably, the new owners are a little more focused on business, but does that translate to a passionate connection to brewing?

I ask this after reading this (first) quote from Gizmo’s CEO in a recent article in the Raleigh News and Observer:

“They were not fans of IPAs,” [Bryan] Williams, 31, said in a recent interview. “We were the IPA fans.”

… and there’s the rub. At a time when the craft beer business is booming, a brewery that exclusively makes malt-forward beers may not have a place (Roth Brewing) but one that embraces the hop-head craze does (Gizmo).

Do those green hops simply mean green cash, too?

Well, maybe.

Depending on your belief in beer (and probably country of residence) the IPA may just be the “flagship style of the craft beer movement” and the “world’s most popular craft beer style.” In the least, we know IPAs are selling tremendously well as the fastest growing beer style for on-premise sales at restaurants and bars.

Which is why my radar went off when reading that quote from Gizmo’s CEO, who was echoed by another member of Gizmo:

“I wish we brewed more bitter beers,” added Matt Santelli, 33, another of the new owners.

I guess Gizmo’s client base believes the same thing? One last quote for irony’s sake: “I think the great thing about the brewing industry is there is no right way to do things.” … except apparently make malt-forward beers, while the “right way” to do things means making IPAs.

But I digress.

The story here is that IPAs sell well. Like, really well. Like, they’re 25.2 percent of the ENTIRE beer market in Oregon well. That’s any and every beer, not just craft.

As Stan Hieronymus points out:

In the four years between the end of 2007 and end of 2011 sales of IPA increased 260 percent and it became the No. 1 craft style. The next year sales increased 40 percent again. This gets harder to measure, because now we have Black IPAs, White IPAs, Belgian IPAs, Session IPAs, and Cider IPAs.

All this is to say that when I read about a brewery failing or succeeding based on the idea of brewing IPAs or bitter beers, I translate that to mean something about business and money and less about brewing and beer. These things are not mutually exclusive, but I believe at a time when the craft beer market is booming and there’s money to be made, playing devil’s advocate doesn’t hurt. For as much as someone may get into beer for the love of the product, it’s a money-making business, too.

So I wonder if it’s true: all that glitters hop green is gold?

+Bryan Roth
“Don’t drink to get drunk. Drink to enjoy life.” — Jack Kerouac

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33 thoughts on “Long Live the King? Hops, IPAs and Beer Business

  1. It does suck that most breweries must have a flagship IPA but I feel that is slowly starting to change. I’ve noticed a slight hipster tendency in many craft beer geeks that once something is super popular the move away from it. There have been signs that sours and session IPAs are quickly climbing the ranks as the next “next big thing.”

    • Something like session IPAs are definitely catching on – and I like that – but they’re still IPAs. While I linked to a few examples, there just seems to be too much sales evidence that IPA consumption (both in bottles and dollars) just isn’t going anywhere but up. While something like sours may be a trend, the strength of IPA sales and how breweries rely on them seems more like a norm.

      It seems that if there’s a “native” beer for Americans, this may be it.

      What do you think?

      • IPA may be America’s favorite beer right now but it can never be “native” I mean it is an INDIA pale ale and all. America’s native beer is, in my opinion from everything I’ve read, the California Cream Ale.

      • Er, I should say, overly-hopped IPAs that focus on American hop qualities. That seems “native” as far as people’s ownership of it as something uniquely American enjoyed by the masses.

        (FWIW, I agree with the true “native” beer as steam beer)

  2. I agree with the right good fellow, Tom Aguero, that (like with anything) there is hive mind when it comes to craft beer. I also agree that I’m seeing more sours than ever before (and I’m not complaining).

    And I agree with the quote you listed that “the great thing about the brewing industry is there is no right way to do things”. That’s true, but if you are going to veer off the beaten path, you need to make sure that what you’re doing is unique and damn near perfect. It’s cool if you want to brew malt forward beers, but if most people are inclined to drink hoppy beers, you need to bring it with you’re beer to keep them coming back.

    With all that said, when I read that the belief is their business failed because they weren’t brewing bitter enough beers it kind of made me cry inside. I love bitter beer, but as a homebrewer I’m obsessed with BEER. I love to try flavors I’ve never had before. The first time I had a lambic I about S’d my pants because I had no idea that a beer could taste like that. And it’s fun for me to try a new beer and then go back and find out how those beer styles came about. Take in the history and what not. I don’t want the state of beer to turn into craft vs macro aka watered down vs hop bomb. That’s boring, stupid, and if craft brewers are making bitter beers just to make the sale they are as pathetic macro brewers in my eyes.

    • I wonder if the explosion of IPAs and brewer reliance on them has a lot to do with the massive growth. It’s cyclical – IPAs were growing in popularity as the US craft beer boom began, so breweries started to make them. As more and more breweries open, they include IPAs as their core beer because that’s the norm. People buy IPAs because that’s what they see everywhere, and presumably, because they like it.

      • I’m sure there is some cyclical action here but I’m also thinking that the majority of people still drink X light and want a change.

        What is the most easily obtainable opposite of watered down light lagers? IPAs!

    • I wish I could like or favorite comments. This is stellar and I agree fully with the sentiments of your last paragraph.

  3. Good points. I’d be less likely to seek out any beer (including IPA’s – my hophead-addled favorite) from a brewery that I perceived as selecting their offerings primarily based upon their sales expectations. Perhaps that’s a naive perspective and, yes, I do know better but that’s how I feel.

    Ironically, one of my favorite craft brewers, Stone, has exactly the opposite philosophy. They brew what they like without regard to whether or not it will achieve particularly impressive sales numbers AND they turn out gloriously aggressive IPAs of many variations. Fortunately, there are enough of us who also like what they like to have helped them grow tremendously over the last decade.

    In any event, Because I’m merely a fan, observer, occasional critic, and lunatic blogger, I can afford to have naive opinions and impractical expectations regarding brewers and their motivations in getting into the business and selecting their lineups.

    Cheers!

  4. I’ve long been on a “hoppy” doesn’t mean “good” crusade. I remember 10 years ago with the big hop shortage, you could really see who was actually a good brewer. Some people were putting out some really creative, tasty, malty beers. It doesn’t take a lot of skill to slam a bunch of hops into a beer and people think it’s “good.”

    I had one master brewer comment to me about how another brewer “never met an infection he couldn’t hop out of existence.”

    I love a well craft hoppy beer, but there are too many brewers producing what amounts one style of beer, no matter what the label says.

    I also feel that “hops” are an easy flavor to pick out (and like you said, they’re the opposite of light lagers) so people can feel instantly “like an expert.”

    Many of these points I illuminated in my rant about IPA day last year.

    Fortunately, I think this trend will mellow out as the American craft beer drinker matures and realizes there’s more to “good” beer than being extreme.

    • Great insight – thanks for this. Sometimes I wonder when/how we’ll break away from the norm of IPAs. Like I mentioned in my above comments, I think it’s something that is very much ingrained in the American craft beer drinker’s psyche, but that’s no reason to ignore all the other amazing beers a brewery will make, especially new ones.

      This may be apples to oranges (or is that hops to malt?), but an example I found yesterday was this story, where a new brewery will open up in SC after a homebrewer decided he wanted to go pro. Among his first mass-produced brews? A double IPA: http://drinkblogrepeat.com/2013/07/11/river-rat-to-keep-craft-beer-ball-rolling-in-columbia/

  5. Great, great post, Bryan. I see the popularity of IPAs as part of a bigger American culinary trend. We like in-your-face, undeniable flavor, often without a regard for real quality.

    What did we do with traditional Chinese food? Deep fried it and added heavy sauces. Traditional Italian food? A shitload of cheese! Traditional English, German, Belgian beer? Drowned it in hops!

    I think a lot of it has to do with Tom’s comment above, that IPA represent a style of beer that is antithetical to yellow, domestic, fizz-water. People breaking into craft won’t appreciate the nuance of a good amber lager or a perfectly balanced pilsner, because it’s not enough of a departure for what they’ve been drinking. They want to KNOW they’re drinking craft beer, which means hoppage.

    And to play the mean-guy, I know from experience that over-hopping can cover defects pretty easily. Hops are like black pepper: add enough and eventually you can’t even really tell what the original dish was. If I see a double IPA, or a mega-hopped normal IPA, or just a hop-heavy Pale, I worry that the beer behind all that alpha acid might not be all that good.

    • Another great addition to the discussion – thanks for this!

      As Tom and Douglas point out, there’s slow growth in the non hop bomb area, but that’s not exactly American sensibility, which I think you accurately point out.

      Does that mean we’re hopeless? No. But I do think it means IPAs are just something we can’t give up (as consumers). I, for one, am certainly guilty of an unabashed love for hops, but that doesn’t preclude me from enjoying just about anything else, thankfully.

      • Anytime! Thanks for posting something so thought provoking.

        I don’t think IPAs really need to go anywhere, we just need the other styles to catch up. I’m the guy who will nibble on hop pellets while brewing, so I’m clearly part of the hop problem. That said, I love, love, love some barely hopped varieties like a good oatmeal stout or a sweet, malty brown ale.

  6. IPA’s are definitely popular right now, and it’s easy to make an average IPA, so I think that just means you’ll have more IPA’s. Very interesting to hear that it’s becoming mandatory though.

    • It is odd, as if it’s now an “unwritten rule” that an IPA needs to be included. Even more so, I’ve found many places local to me that make IPA their “flagship” beer for their brewery.

      That in itself is something of a chicken and the egg situation: is it flagship because people demand it and it makes money or is it flagship because it makes money because people expect it?

      • I think it’s apparently more of the former, given this story. Assuming they were putting out quality malt-forward beers (which I don’t know, as I haven’t had their beers before), it sounds like the craft beer market is demanding IPA’s, which is certainly an interesting bit of information.

      • You’re right (at least in my opinion) that the market is requesting the presence of IPAs. So that leads to the next question of if breweries need to be reliant on an IPA or is innovation enough? For startups, I wonder if IPA needs to come first in planning, knowing that there’s a good chance that’s what you may hang your hat on as a brewer from the business perspective. (Complete speculation)

        Crooked Stave in Denver does sour-batch beers only. However, that’s such a niche thing, people seem to always be interested. That said, their beer is also amazing.

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  17. There are successful brewpubs which aren’t focused on hoppy- like Green Man in Asheville. The owner of Railhouse Brewery in Roanoke comes from marketing, not homebrewing, and told us some interesting tales of doing market research for what beers to brew, not “what I think we should brew.” His conclusion results in an amazing lineup where the IPA is very malt-balanced. We personally are very frustrated by the IPA dominance of the market, since that’s not what we drink!

    • Green Man is a great example! It’s in a good market, too, given the variety of options in Asheville, it’s nice to stick out in some way, especially for the amount if time they’ve been around.

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