When the American beer industry’s big brother rescued the little guys

Note — this article was originally drafted a for a client in the building trade but wasn’t quite for them, so it’s being posted here so it isn’t lost.

What do brewing beer and building homes have in common?

The construction industry’s materials shortage is the result of worldwide turmoil that goes well beyond the actual building sector, but the effects are following a familiar route — some of the most vulnerable buyers are feeling the pinch first.

Smaller firms, in particular self-builders or those contracted by self-builders, are struggling to source materials to start or maintain their building projects. Even larger firms are suffering project delays due to the materials crunch, and the cost of what is available marches inexorably higher for the time being.

There are very few easy answers, and it’s far from [our] area of expertise to offer any kind of solution.

We can, however, relay a charming story of time when a critical material shortage had a silver lining — the 2008 hops shortage, and how one brewery saved the day for thousands of tiny businesses.

When the American beer industry’s big brother rescued the little guys

In 2008, there was a drastic global reduction in the availability of hops, a crucial ingredient in the beer-making process.

Fewer farmers chose to grow hops, then crop failures combined with a warehouse fire to cause hop prices to skyrocket.

Larger American brewers like Molson-Coors and Anhauser Busch were spared the worst of the crisis, benefitting from enormous standing orders with hop growers that, along with significant reserves, guaranteed them their usual brew.

The smallest brewers, however, really felt the pinch. Hops, an indispensable beer ingredient, went from $2 USD a pound to $20 USD. For any industry, a sudden ten-fold increase in raw materials will have a huge impact. For a microbrewery, it’s a crippling hike in costs.

Despite the reputation for Coors, Budweiser, and Miller to dominate the American beer landscape, the USA is a very much a nation alive with passionate microbrewers. According to the Guardian, there are 9,000 known microbreweries in the USA, roughly 180 for every state, before we even mention smaller home brewers.

And in 2008, they all needed hops they could actually afford to keep their industry, and their brewing subculture, alive.

It’s just not beer without it

Recipes can be tweaked, workarounds can be employed, but at its core beer is grain, water, yeast, and hops. Even if you draw up a recipe with almost no hops at all, the hops still have to be there to call it a beer.

In the medium-to-long term, demand would draw the hop-growers back in the fields to answer the demands of the market. But in the short term, many of the smallest American craft and microbrewery businesses faced a crisis that threatened to kill them off before the next harvest would be available.

How the Boston Beer Company rode to the rescue

Enter the Boston Beer Company and its co-founder Jim Koch, makers of the popular Samuel Adams beer brand.

In a gesture of goodwill to the smallest American brewers, the Boston Beer Company made 20,000lbs of hops available to any brewer that needed them, sold at cost.

Depending on what kind of recipe the brewers used, 20,000lbs of hops could be enough to brew between 500,000 and 1,000,000 gallons of beer. And that’s before combining them with whatever hops the brewers had on hand or could source themselves, potentially doubling that figure.

Not that much compared to the billions of litres of lager that Americans drink ever year, but microbreweries by definition produce less than 15,000 barrels of beer a year, and the Boston Beer Company’s gesture was aimed mostly at the absolute smallest and neediest of brewers.

The Boston Beer Company asked no questions of the brewers that ordered, trusting their gesture to be seen to be received in the spirit it was offered — the collective goodwill of beer enthusiasts to want to make lots of interesting and creative beers so that lots of people can enjoy them.

Some beer experts credit the Boston Beer Company for playing a huge part in keeping the American homebrew and microbrewery world alive — or at least making sure it could limp through 2008 until the price of hops normalised.

Back to the building trade

As we said earlier, [we] don’t see it as [our] place to try and offer solutions to the global supply chain crisis. We certainly hope to see the speediest possible resolution to the issue so that everyone, from self-builders right through to skyscrapers, can commit to projects in full confidence that their projects can start.

[We] are also certainly not trying to compel any construction material suppliers to plug gaps in the self-build supply lines out of the goodness of their hearts.

We just thought you might enjoy a nice story from when another industry faced a crucial materials shortage.