Microbreweries Face Rising Production Costs
Price Of Hops Increases
Updated: 9:39 pm CST November 13, 2007
MADISON, Wis. -- When it comes to beer, microbrews are becoming more and more popular. However, as more neighborhood breweries pop up across the country, the hand-crafted beer is becoming harder to produce.
VIDEO: Watch The ReportJust as with any business, the cost of operating a brewery has gone up dramatically in recent years. But the difficulties go beyond cost. Some brewers are finding it just as hard to find the ingredients they need.Dan Carey, brewmaster at New Glarus Brewery said that quality ingredients are becoming scarce, and if things don't change in the near future, brewers across the nation will be scrambling for supplies."We could not have enough barely to make beer," Carey said.In the last year, expenses at New Glarus have raised as much as 12 percent. The price of hops and barley has doubled, WISC-TV reported.But to brew his brand of beer, Carey said he needs specific ingredients from across the country and across the world.But he said fewer farmers are growing the crops."In the United States, there's no inventory of barley," Carey said. "Usually there's about a year's worth of barley floating around. It's no longer there. Basically, barley's turned into malt and sent to us. If there's another bad year, it could be catastrophic."New Glarus produces high-end microbrews. The product costs more to produce, so its customers are used to paying a bit more for their product.The Minhas Brewery in Monroe is the 15th largest brewery in the country, and it continues to grow.Hops makes up only 1 percent of Minhas' ingredients but still costs the company more than $600,000 a year.Combined with other expenses, brewers said it adds up."Anytime you're spending any money, it's significant," said brewery co-owner Ravinder Minhas. "In the overall scheme of things, water, barley, labor, fuel surcharges, really drive beer prices, not necessarily hops."Both New Glarus and Minhas are trying to find ways to keep costs down for customers."I'm sure there will be price increases, but I think most brewers will do a combination of absorbing the cost and passing on some of the cost too," Carey said.In addition to the rising cost of making beer, bottling and transporting costs are also on the rise. Glass bottles have become more expensive, because the cost of natural gas has risen; natural gas is used to melt sand to make glass.
VIDEO: Watch The ReportJust as with any business, the cost of operating a brewery has gone up dramatically in recent years. But the difficulties go beyond cost. Some brewers are finding it just as hard to find the ingredients they need.Dan Carey, brewmaster at New Glarus Brewery said that quality ingredients are becoming scarce, and if things don't change in the near future, brewers across the nation will be scrambling for supplies."We could not have enough barely to make beer," Carey said.In the last year, expenses at New Glarus have raised as much as 12 percent. The price of hops and barley has doubled, WISC-TV reported.But to brew his brand of beer, Carey said he needs specific ingredients from across the country and across the world.But he said fewer farmers are growing the crops."In the United States, there's no inventory of barley," Carey said. "Usually there's about a year's worth of barley floating around. It's no longer there. Basically, barley's turned into malt and sent to us. If there's another bad year, it could be catastrophic."New Glarus produces high-end microbrews. The product costs more to produce, so its customers are used to paying a bit more for their product.The Minhas Brewery in Monroe is the 15th largest brewery in the country, and it continues to grow.Hops makes up only 1 percent of Minhas' ingredients but still costs the company more than $600,000 a year.Combined with other expenses, brewers said it adds up."Anytime you're spending any money, it's significant," said brewery co-owner Ravinder Minhas. "In the overall scheme of things, water, barley, labor, fuel surcharges, really drive beer prices, not necessarily hops."Both New Glarus and Minhas are trying to find ways to keep costs down for customers."I'm sure there will be price increases, but I think most brewers will do a combination of absorbing the cost and passing on some of the cost too," Carey said.In addition to the rising cost of making beer, bottling and transporting costs are also on the rise. Glass bottles have become more expensive, because the cost of natural gas has risen; natural gas is used to melt sand to make glass. Copyright 2007 by Channel 3000. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
