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The Growth of Craft Beer |
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The Brewers Association, the trade association that tabulates industry data for craft brewers, reports craft beer sales and growth continue to break records. The volume of craft beer sold in the first half of 2007 rose 11% compared to this same period in 2006 and dollar growth increased 14%. For the first time ever craft beer has exceeded more than a 5% dollar share of total beer sales.
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(click graph for more details)
Overall, the U.S. beer industry sold one million more barrels in the first half of 2007 compared to 2006, with 400,000 of these new barrels produced by craft breweries. This equates to 3.768 million barrels of craft beer sold in the first two quarters of 2007 compared to 3.368 million barrels sold in the first half of 2006.
What that means to Cape Cod Beer: This means it is a great time to be in the craft beer industry! It also means that competion for all things related to craft beer, including customers, shelf space, taps, raw materials, kegs, stainless etc has increased. The hop and malt issues discussed here are part of this - as is the ever-increasing price of stainless steel and kegs
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BREWERS GUILD ?? |
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Over the last few months, brewery owners and operators across Massachusetts have met several times to pursue the concept of a Massachusetts Brewer's Guild. I have been actively involved with these meetings and am happy to say it appears that such a group will be formed. It's exact purpose and mission is still being formulated; the intent is to develop an organization to both protect and promote craft brewing in Massachusetts. Happily, it appears that the newly formed guild has every intention of having a brewer's fest! Stay tuned for more details.
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Support Your Local Brewery |
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Support Your Local Brewery is a national, grassroots partnership of beer enthusiasts, professional trade associations and brewers dedicated to supporting and protecting the legislative and regulatory interests of small, traditional and independent craft breweries.
For more info go to SupportYourLocalBrewery.org
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Greetings!
The next time you come by the brewery for a growler refill you might notice that refill prices have gone up by a $1, making Red & IPA refills $7 and our regular seasonal refills (Summer & Porter) $8.
While most people we've talked to so far, think this is still a "great deal" we wanted to give you some background on why our prices went up - and why the price of beer overall will more than likely be going up across the board in 2008.
If you're interested keep reading! |
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Worldwide Hops Shortage |
 Over the last 2 months our hop costs have increased over 300%. This was caused by 35 years of excess or over supply which has led to the number of U.S. growers falling from 515 in 1950 to 45 in 2007. A perfect storm of events from hail to extended rains and pest damage has further reduced the available worldwide supply for 2008. It is generally believed that there is insufficient global supply to satisfy the demand and that some brewers will be without sufficient hops in 2008. What does this mean to Cape Cod Beer? We have contracts in place for our raw material needs for this coming year and don't foresee any procurement or production issues. But it does mean our costs have increased significantly, and while we are absorbing some of these cost increases, we also must pass some onto our customers - so far via an increase in growlers refills, and shortly an increase in wholesale keg prices. |
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Worldwide Grain Concerns |
Key factors contributing to shortages in the malt supply include:
- Poor harvest in 2006 causing inventories to be at an all time low
- Worldwide beer consumption is at an all time high.
- Under capcity of the malting industry to meet demand.
- 2007 world barley crops were disappointing in terms of quality and quantity
- Ethanol (US) and Bio-fuel (EU) production has pushed all grain prices higher, as well as enticing growers to "grow corn instead"
The result is that malt prices are up between 30 and 50%.
What does this mean to Cape Cod Beer? We know as of today that our contracted prices for grain in 2008 have gone up 45%, thus causing price increases across the industry. But based on our projections we will have enough grain to brew all the beer we need to and want to in 2008. What this means for 2009 is yet unknown to everyone - but there are plenty of brewer's around the world holding their breath! | |
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While some of this is pretty serious stuff going on in our industry, we want our friends and customers to know that 1. We are aware of these issues, and 2. We are doing everything possible to protect ourselves (and you) from shortages due to these issues. We have done so in 2008 by contracting our hops and malt for the entire year, as well as keeping tight control over our raw materials and researching alternatives and improvements in efficiencies, and holding off on price increases until absolutely necessary.
If you have any questions please do not hesitate to call or stop by.
Todd Marcus, Brewmaster
Cape Cod Beer | |
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