People who pay attention to the American craft beer industry have come to expect that the world’s largest beer company, AB InBev, will fairly regularly do something to shock and probably upset that industry and the community of consumers to whom it caters. What that same group may consider to be rare is when ABI does it twice within the span of a week.
Just seven days after it was announced that Anheuser-Busch InBev will be acquiring its 10th American craft brewery, to the dismay and utter disgust of many loyal independent brewing fans (might I say, around the globe), it was leaked today on Facebook that the same company — through a subsidiary — apparently has plans to cut off a vast supply of South African hops to American craft brewers.
The reaction to the leak of contents, allegedly from a distributor’s email sent to multiple American craft breweries, was met with almost immediate reaction from several American craft breweries on social media channels. One brewery’s Twitter account called it a move of “extreme dickeshness.”
The Facebook post from Proclamation Ale Company of Rhode Island quoted the email in question, in which a claim was made that SAB Hops Farms, the aforementioned ABI subsidiary, refuses “to let US craft brewers buy any CY 2017 hops believing this will afford them a competitive advantage in an increasingly competitive marketplace.”
Amended (5-11-17) — I reached out to SAB Hop Farms by email, and received the notice below, attributed to Willy Buholzer, Global Hops Procurement Director, Anheuser-Busch InBev. ABI acquired the South African hops grower in its 2016 acquisition of another global beer giant, SABMiller.
South Africa is not a traditional hop growing region. SAB’s R&D efforts made it possible to grow hops in South Africa but it is still less than 1% of the world hop acreage and production. This year, South Africa suffered from low yields. Previously, SAB has sold a small surplus of locally-grown hops to the market. Unfortunately this year we do not have enough to do so given the poor yield. 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.
Knowing the high demand for South African hops locally and abroad, we are working to expand local hop acreage. Depending on the 2018 crop outcome, we may once again be able to sell more hops to breweries outside of South Africa.
Some are saying the move is just the first step in an ABI strategy aimed at controlling the supply of beer making ingredients used in craft beers around the world. Others are saying that the timing of the announcement is very suspicious, as over the weekend dozens of American craft brewers took a principled stand and withdrew from an event planned by ABI’s latest acquisition, Wicked Weed. They are speculating that today’s action may partly be retaliation.
Hops are one of the four main ingredients in beer. Some hardcore IPA fans — commonly known as hopheads — might say hops are two of the main five ingredients in a good dank craft beer. In case you also didn’t know, hops are not the easiest crops to grow and harvest because they require long days, lots of water, nutrient-rich soil, full seasons and around $60,000 dollars worth of startup capital. Fortunately, there are a few regions of the planet where cultivation of the bitter flower has become a specialty.
According to the Department of Agriculture, U.S. hop production hit a record high in 2016, with an overwhelming majority (over 70%) of it coming from the Yakima Valley of Washington. As encouraging as increases in supply are to craft brewers and beer lovers alike, it is important to know that demand for the crop is also higher than ever, and craft beers use an estimated 20 percent of all hops made available for the global beer market.
Today there are more than 5,300 breweries in the United States, and competition has tightened for unique varieties of hops that can deliver the drinking experiences a consumer base excited by nuances in flavor are eager to have.
That chase for change has American craft brewers going outside of the country’s border to find the hops capable of meeting new demands. One of the places they are looking and buying is South Africa, which AB InBev wants to become a net exporter of unique hop varieties by 2021. Varieties of hops grown in South Africa include: Southern Star, Southern Promise, Southern Dawn, Southern Aroma, Southern Passion and J17, Our African Queen.
How does this ultimately impact the future of American craft brewing, the rest of Earth’s emerging craft beer industries and the beer loving public at large?
Modern Times Brewing of San Diego had this to say on Twitter:
So we hope you enjoyed the beers you had w/ Southern Passion, J-17, etc…Some of the best hoppy breweries in the country were using these
— Modern Times Beer (@ModernTimesBeer) May 10, 2017
This is story is still developing, and I will update it as I learn more. Please contact Brew Studs if you have any relevant information.