The going gets tougher for hop suppliers
Confident that the global beer market would continue to grow unabatedly, the brewing industry placed long-term forward contracts, which led to an increase in hop acreage around the world. From 2007 to 2008 planted acreage increased by more than 12 percent, particularly in Germany and the United States.
Since 2008 there has been a gradual reduction in acreage. It should be noted, however, that primarily areas planted with aroma hops have been cleared. In 2009, the year-on-year reduction was slightly more than 1 percent. For 2010, Mr Barth forecasts a further reduction of just below 8 percent.
However, Mr Barth thinks that there is still an overcapacity of 20 percent to 25 percent in the market.
What adds to the hop market’s malaise is that many brewers have reduced the quantity of hops in their beers, either by cutting their hopping rates or by using hop-saving products.
Hopping rates in the brewing industry have more than halved in the last forty years: in 1970 the average hopping rate was 9.6 g of alpha acid, whereas in 2010 it was only 4.1 g, as international studies by the Barth-Haas Group have shown.
In summing up, Mr Barth stressed the following points: “Too many hops are being grown! Without further clearing of plantations, the hop market will not be able to recover in the medium and long term.”
Joh. Barth & Sohn and the Barth-Haas Group have maintained their leading position in Germany and internationally. Their market share, nationally and internationally, is between 30 percent and 35 percent”, Regine Barth, Managing Partner of Joh. Barth & Sohn, said.
The turnover of the Barth-Haas Group for the current financial year ending 31 July 2010 is expected to amount to EUR 250 million to EUR 270 million. “This represents a year-on-year decrease of 10 percent to 17 percent which, however, is due almost entirely to falling raw materials prices on the hop market”, Ms Barth explained.
The number of employees working for the Barth-Haas Group has remained essentially unchanged: in 2010 there were 625 employees, 40 percent of whom worked in Germany.
