AB InBev is Coming for All Your Hops, Unless They Aren’t

If it’s not Wicked Weed, it’s something else, I suppose.

On the heels of a loud and wide outcry from industry professionals and drinkers over the purchase of Wicked Weed by AB InBev, the global conglomerate has offered another reason to pile on. Today, it was noted that AB InBev, post-merger with SABMiller, will use South Africa’s SAB Hop Farms with the goal, according to this memo, “to sell the hops internally to their acquired (former) craft breweries, even though they have not been able to sell all the hops as of yet.” To be clear, it seems this amount of hops is 20 metric tons, or roughly 44,100 pounds.

To put that in comparison, the US grew a reported 89 million pounds of hops in 2016.

But let’s go a step further. If I’m translating numbers correctly, the International Hop Growers Convention estimated the *entire* South African hop crop at 1.9 million pounds in 2016. It is projected to drop to 1.56 million pounds in 2017. There are 1,047 acres of hops expected to be harvested in South Africa this year, or a stone’s throw away than the acreage of *only* Cascade grown *just* in Oregon in 2016.

92% of all South African hops are set to be of the alpha variety, which we know is not as popular at the moment in the U.S., where aromatic and fruity hops reign supreme.

Is it unfortunate that American brewers won’t be able to get aroma hops like Southern Passion from South Africa or alpha hops like Southern Star? Sure. But these are varieties to play with, not with which you build a portfolio of brands.

Spoiler alert: those would be Citra, Amarillo, Mosaic and Simcoe.

The loss of South African hops is taking away a portion of the sandbox in which U.S. brewers play, but they can also log onto the Lupulin Exchange at any time to find a variety of hops for which they don’t have via contract. For further context, in a release, Willy Buholzer, global hops procurement director for AB InBev noted:

More than 90 percent of our South African-grown hops will be used in local brands Castle Lager and Castle Lite, beers we’ve committed to brewing with locally-grown ingredients. In support of the local industry, we additionally sell hops to South African craft breweries. This means that less than five percent can be allocated to other Anheuser-Busch InBev breweries outside of South Africa.

This comment carries extra weight when you consider the hoops AB InBev was forced to jump through by the South African government in order to gain approval for its merger with SAB Miller, which included a $69 million (U.S.) rand fund to support the local beer-making industry and supply chains in the country.

Yes, there is a story here in terms of new market fluctuations, but if you’re curious about the future of hop growth (and scarcity?) may I recommend giving a follow to the man who literally wrote the book on them (and his new newsletter) or poke through this collection of stories from last September.

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

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7 thoughts on “AB InBev is Coming for All Your Hops, Unless They Aren’t

  1. Excellent job of adding perspective, Bryan. Rather than talking about acres with these hops it is more useful to discuss quantities grown. Yield is a challenge in South Africa because their hop fields are inside (as in too close to the equator) optimal latitude for good yields. That’s why it hasn’t been realistic for their farmers to say, “We’ve got this cool new variety. Let’s go all Mosaic* with it.”

    With that in mind, a brewery using 3 pounds of hops per barrel – hardly outlandish these days – could make 14,700 barrels of IPA with 20 MT. Those ABI guys needs a lot more.

    *American farmers produced more than 2,600 MT of Mosaic last year.

  2. My math, using HGA 2016 Stat Pack: <25K lbs imported to US = 0.2% of imported hops, 0.06% of total US hop usage (super-rough: US production – exports + imports).

    I also think Stan is being generous. Lbs/bbl usage of these hops seems likely to be higher than 3, to me (almost exclusively IPAs, lots of dry-hopping). I think we're talking less than 10K bbls with South African hops last year, potentially far less (first assumption: 5K). 10K bbls = 0.04% of US craft volume, no matter how you wanna slice it. So grand scheme: no, not terribly important. US craft brewers are creative enough to solve this problem.

    However. We live in a post-Wicked Weed world now. Every opportunity will be taken.

  3. “I didn’t move when they acquired , because I did not care about this brewery”
    “I didn’t move when they took away south african hops, ’cause i don’t use them…”

    See a pattern forming here ?

    • The only pattern I see in your comment is the highly inappropriate invocation of Godwin’s Law in an article about beer.

  4. Are you aware quite how US centric this comes across as?

    For one – plenty of businesses have been built on hops other than “Citra, Amarillo, Mosaic and Simcoe”. For two – the hop industry in a country is primarily there to support a local beer industry, not as a play thing for US importers. And three – the US hop industry is massive compared to that of almost any other country bar Germany, China and China.

    Leave aside the yield issue, over a 1000 acres is about the same as Australia or NZ, half that of England, three times that of Belgium. Are you suggesting that these countries don’t have enough hops to create brands – or that they should convert to Mosaic in order to have a viable beer industry? Is the Belgian beer scene somehow invalidated by their inability to export quantities of hops to the US? If InBev decided to tie up the entire Belgian hop output for Stella, would it be OK for Westvleteren and Rochefort to import hops? Should Orval just accept the situation and use Citra imported from the US? Because apparently you can only build a beer brand on varieties like Citra.

    Obviously this situation has its roots in politics and commerce, which move much faster than agriculture and can cause tensions as a result. In principle I would welcome InBev committing to more local sourcing, even for bland lager like Castle – but there’s ways of doing it that don’t have such serious impacts on the local beer scene. It’s one thing to have local me-too beers brewed with imported Citra or whatever, but a local beer scene really comes about through the local factors – local ingredients, local water, local cuisine, local culture. Local hops don’t just open up the possibility of entire new types of beer, like green/wet hops, but you get that subtle interplay between brewers and their hops that is living history. For instance I’ve known Kent brewers expound at length on why they would only use certain clones of Goldings in the kettle and different clones in the whirlpool “because they’re so different”, or they will tweak the grist to reflect vintage variations in the hops. You don’t get that kind of connection when someone imports some EKG bought off the internet.

    So don’t look at this through US eyes – think about what this means for the development of a local beer culture in a country that is in the top 10 by hop acreage.

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