Burgeoning Craft Beer Culture Paves Way for Hops Sales
A keen interest in craft breweries and home breweries has taken the global hops market by storm. According to The Brewers Association, more than 550 new breweries opened in 2015 in the U.S. With craft brewers growing at a double-digit rate, the demand for hops is expected to accelerate in the near future.
Hops counterbalances the sweetness of the malted grains, adds flavour, and aroma to the beer. It contains essential oils responsible for releasing the desired aroma. As a result, the demand for aromatic hops has attained robust growth in recent years. In 2013, approximately 60% of the U.S. hop acreage were dedicated to aroma hops. Hops also contains beta acids that delay spoilage caused by bacteria, acting as a natural preservative. These characteristics are expected to work in favour of the global market during the forecast period.
However, the production of hops involves tremendous complexity. Cultivating demands high investments. Before making its way to the brewer, hops undergoes a minimum gestation period of one to two years. Its long harvesting cycle makes it a costly ingredient and one that has to be protected at all costs from natural calamities and possible disasters.
Chinook Segment Capitalizes on Hops Market as it Proves to Be a Valuable Ingredient in Beer
The global hops market is segmented on the basis of raw material, nature, application, and region. By raw material type, the market is segmented as cascade hops, amarillo hops, chinook hops, and centennial hops. The concentration of acid in chinook hops is comparatively higher, varying from 12-14%. This makes it well-suited for the production of alcoholic beverages, especially beer. This reason alone is expected to give this segment an edge over others.
By nature, the market segmentation includes organic and conventional where organic hops are expected to gain more traction owing to the increased demand for organic beer. According to the Organic Trade Association (OTA) sales of organic beer in the U.S. increased by 3.4% between 2017 and 2018. This is expected to shift the focus towards a systemic investment in growing organic hops, thereby boosting the segment in the long run.
By application, the global hops market is segmented as beverages, pharmaceuticals, and cosmetics. Hops are one of the valued ingredients in alcoholic beverages. In the brewing industry, it is used as a flavouring and stability agent, which is expected to drive the segment growth over the forecast period. Meanwhile, the pharmaceutical segment is expected to retain its growth. The inherent medicinal properties of hops such as high antioxidants and excellent anti-inflammatory nature have won the ingredient a lucrative space in the production of drugs for digestion and treatment of menstrual symptoms amongst others.
Organized Supply Chain Management is Supports Market Growth in the U.S.
The majority of hops are cultivated in the U.S. and Europe collectively account for nearly 90% of the global volume production. The key producing locations in the U.S. are Washington, Oregon, and Idaho. Other global hops producer includes include Australia, New Zealand, South Africa, and China. In terms of volume, North America is expected to reflect the largest bubble size on the attractive index. In the U.S., craft brewers are increasing at a double-digit rate. In 2019, according to Brewer Association (U.S.), more than 8000 craft breweries were operating in the country. From the consumer point of view, people are shifting towards fresh and gluten-free alcoholic beverages. These factors are driving the overall hops market in the U.S.
Furthermore, the supply chain of hops in the U.S. is highly organized. More than 90 % of craft breweries are contractual relationships with the farmers. This strategic move helps brewers to secure a guaranteed supply of hops of the preferred variety. This enables growers to plan plantations and ensure a steady production cycle, leading to sustainable supply chain management.
Hops Demand Blooming in Non-alcoholic Beverages Alternatives
Some of the major players studied in the report are Kalsec Inc., Aromatrix Flora Pvt. Ltd, S. S. Steiner Inc., Crosby Hop Farm LLC., New Zealand Hops Limited, Yakima Chief Hops LLC, Glacier Hops Ranch, Inc., Hopco Pty Ltd, Naturalin Bio-Resources Co., Ltd and Xinjiang Elimnatural Hops Co., Ltd.
To grab the opportunity in untapped markets innovators are introducing new products. For instance, Yakima Chief Hops, a global hop supplier, launched a line of hop products called Cryo Hops. The company is deriving concentrated lupulin and bract through cryogenic hop processing technology. The concentrated lupulin offers maximum aroma and reduces negative effects in hoppy beers.
The winning streak of the global hops market is also due to the influx of non-alcoholic beverages that use hops for its peculiar characteristics of flavour and fragrance. Manufacturers are incorporating hops with sparkling water, tea, and soda to create refreshing non-alcoholic drinks. For instance, in 2021, Hoplark introduced craft-brewed sparkling waters infused with hops. The product was launched under three flavours including: citra hops, mosaic hops, and sabro hops.
Please Note: The above mentioned segmentation/companies/countries are likely to differ in the actual report as they are based on preliminary research.
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