This is the second part of a series of articles pertaining to the embryonic sector the Québec craft hops market constitutes. Keeping in mind the practical ends of these articles, here be expounded, to the best of my knowledge & reasoning, the backbones of the Québec market as a small player on a worldwide scale, as well as a little slice of history.
Click here to read the article in french.
Click here to read the first article of this series.
Québec is but a small player in the global economy, in that it weighs not in the international market variables, or negligibly so at best, as much from the point of view of production as from that of consumption (both fundamental market forces, supply & demand); that makes quebecers a barely influent people that submits to external forces of the Hops market, without being able to take any action that would considerably alter the market variables in the short term. For example, if global hops stocks wither, prices would generally go up, and Québec brewers would have no choice but to up their beers’ price.
The global market must be considered as a whole in order to well understand the Québec market, because the Hops sector is an open, international one. The Québec craft beer market is far from being self-sufficient in terms of hops. Although nowadays there are over twenty producers in the province, they constitute an embryonic craft market which slowly begins to be commercially exploited, mostly for some special beers and not by all brewers, but always on a small scale.
With the easy access to american hops — mostly from the states of Washington & Oregon — at such competitive prices, in such large supply, and with very stable quality, Québec growers have very few arguments to sell their higher priced hops, other than to mention the « local » quality of their product, hoping to inspire an identity feeling of some kind or to brew a regionalist consideration into the brewer’s buying decision. It is not my aim here to demean Québec hops, but to roughly compare hops from here to hops from elsewhere, in a generalizing manner and without taboo.
There are then two aspects on which we must direct our attention when it comes to Quebec hops: quality and competitivity. The former is a matter of stability, but also of product characteristics, and pertains to growing as much as to transformation; the latter is a matter of production costs, but also has to do with product characteristics. The whole positions the Québec industry amidst the global range of products brewers can choose from.
However, before setting ourselves about both these aspects and the forces underlying their optimization, which will be the subject of my next articles, an important slice of history must be covered, from which there is much to be learned.
The Great Hop Shortage
Let us go back in time just a little bit. In 1992, global hops production hit an all-time high. In the following years, a series of factors pushed the market prices down to a point where the global growing acreage was diminished to half that record until 2006, since many growers had had to sell at loss for too long. In parallel, there developed a trend for very hoppy beers, especially in North America. Add to this some bad climatic conditions having affected the european supply in 2007, speculation on rising prices, and the loss of over a thousand tons of hops in a fire in some Yakima growing farm in 2006, and the planet very soon found itelf in a massive hop shortage, in 2008.
Then, not only did the prices drastically go up, but also aromatic breeds, so popular among craft brewers, gave way to more bittering ones because of their profitability, which are often converted to hops extract and sold to the mass-brewing industry. Those « volume » brewers, and large breweries in general, are usually better protected against price shocks than small brewers because they have the leverage of establishing contracts over many years with the growers, securing constant stocks and a priority on the client list. All in all, in 2008 some harvests went for as much as 150$ per kilogram, never seen in our age, and craft brewers were the first to take the blow, rather quickly.
As global prices were reaching an all-time high, some Quebecers decided to start growing hops because of its apparent profitability; however, after the few years required for the bines to produce mature flowers, prices were already back down to the trend price and the result was not so advantageous for producers, especially as they had to deal with harsher climate conditions than the main competition.
In light of this slice of history, we must understand that a movement towards increasing Québec expertise must be wrought before the next shortage happens, and that exploiting the scarcity-induced lowering of the price differential adds positively to the forces that would foster a desirable structural change in our local industry.
The next article will observe today’s global conjuncture to put Québec in perspective vis-a-vis the above exposed realities.
By Biére de Lys