Thought Bubble is a regular feature on the Mintel blog highlighting multiple viewpoints on one topic from Mintel’s team of expert analysts around the globe. The popularity of hops in the US – and especially the very hoppy IPA style of craft beer – has never been higher. As with other aspects of US craft beer culture, this trend is likely to spread to the rest of the world in the next couple of years. Unfortunately, this coincides with a shortage of good quality hops, which has been caused by the incredible rise in demand of craft beer – and the fact that supply is hugely geared towards the North-West Pacific region of the US. Mintel has invited three of its analysts from different sectors to weigh in with their thoughts. Jonny Forsyth, Global Drinks Analyst: “Unfortunately, just as hops are taking off, a serious shortage looms. Craft brewers are growing so fast that demand is outstripping supply. This is a much bigger problem for craft brewers than for the bigger companies. Not only do craft beers use significantly more hops than mainstream beers but most insist on using the newly established and the more expensive “aroma” hop varieties. These hops have a more powerful hoppy taste but are much lower-yield than mass-produced “alpha” hops. The likely effect of rises in hop prices is that craft beers will become much more expensive in the next few years, especially as smaller craft players do not have deep enough pockets to buy in bulk and in most cases do not have forward contracts with growers. This is likely to necessitate more consolidation, as craft players seek the buying power of bigger breweries to lower production costs while also safeguarding their beer quality. However, the impending hop threat is also an opportunity. High prices of prized hop varieties (such as Amarillo from the US or Saaz from the Czech Republic) increase the mystique and exclusivity of such hop varietals. However, craft beer makers need to more aggressively educate beer drinkers about their superior taste and where they come from to justify higher prices.” Stacy Glasgow, Consumer Trends Analyst: “In order to understand how craft beer brands can leverage their inclusion of high-quality hops in order to attain a more premium perception among consumers, it’s necessary to look at an underlying cultural shift. Consumers are constantly surrounded by screens and the accompanying strain from visual overload. We are tracking a trend where consumers are seeking to stimulate the senses of touch, taste, smell and feel. Brands that deliver and highlight those experiences can facilitate a stronger consumer connection and ultimately become a more memorable product. For breweries, high-quality hops can certainly become a selling point if the focus is on the intensity of the imbibing experience. The taste, the smell, the feeling of hops on the tongue—even the sight of lively bubbles—can enhance consumer devotion and attention, thus encouraging them to feel confident in paying a premium for brews that are made with these hops. As craft beers continue to become mainstream, breweries will want to be sure that their consumers are educated not only on the quality of the hops, but also on the intense sensory pleasures which they facilitate. Taking this approach could differentiate craft brewers, enabling them to maintain the integrity of their products.” Elizabeth Sisel, Beverage Analyst: “US craft beers call for big, intense aromas and flavors, and of course the finest quality hops. Most important to drinkers are the style of the beer, the brand, and the full-bodied flavor. Indian Pale Ales have been growing in popularity for years in the US, with exploding growth in both on- and off-premise locations in 2013 going into 2014. Hops as a flavor also is taking off, with the US beverage market now seeing hop flavors in both soft drinks and spirits. As the flavors and desire for hoppy beverages continue to evolve, high quality hops are worth the extra expense. What comes next is educating consumers on why they want high quality hops over another varietal and its advantages, particularly off-premise where a knowledgeable employee or waiter cannot help to direct a beverage choice or explain in detail the sensory aspects of the beer, and what it provides to the consumer as a drinker. Craft beers are a very social drink. Brewers can take advantage of this with education through word of mouth and socialization. Higher prices and stronger flavors will further encourage high quality, hoppy beers to be something savored, enjoyed, and discussed in the company of others. At retail, manufacturers will have to rely on on-package information to educate consumers on what makes their product better quality and worth the extra money compared to other brands. Brand loyalty is brewers’ biggest ally, and many of the category’s consumers have a desire to learn and are willing to take suggestions and recommendations from others.” Jonny Forsyth is Mintel’s Global Drinks Analyst. Having previously been responsible for researching and writing all of Mintel’s UK drinks reports, Jonny now works as a Global Drinks Analyst. He brings ten years of experience working in the marketing industry, with roles at Starcom Mediavest, AB-Inbev, and Trinity Mirror. Stacy Glasgow is a Consumer Trends Consultant at Mintel. She specializes in Inspire trends that will propel businesses forward and comes from a diverse background that includes CPG, agency, and marketing experience. Elizabeth Sisel is a Beverage Analyst at Mintel with a background in food science and nutrition, whose focus is on delivering the best insights, analysis and trends to clients within the beverage industry. You might also be interested in: No related posts.