Is Beer a Recession Proof Industry?

Since the summer of 2007, the shortage has pushed the cost of hops from around $3-$5 a pound to $20-$40 a pound. It has forced almost all craft brewers — small, independent and traditional breweries — to raise retail prices. Smaller brewers, who don’t typically have contracts on hops, have had to pay the higher costs, alter recipes or turn to less hoppy brews such as wheat beers, stouts and Pilsners.

Despite rising prices and a shortage in hops, craft beer — beer made by small, independent and traditional breweries — has grown 6.5% in volume and 11% in sales in the first half of 2008, roughly the same amount as the same period last year, Mr. Gatza says. According to the Brewers Association, in 2006 and 2007, 47 of the top 50 craft brewing companies grew in production to keep up with demand. So far this year about 42 of the top 50 are growing to keep up with demand, Mr. Gatza said.

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