Editor's note: This story was published in the Record-Eagle's 2017 Economic Outlook section, which was inside Tuesday's newspaper. For more stories, click here to read the section in its entirety online.
Water, hops, malt, yeast — four ingredients that when combined produce a frothy beverage known as beer.
Up until the early 1980s, beer produced in the United States was light, refreshing, and — some would argue — flavorless. Nearly 37 years ago to the day, in Chico, California, Ken Grossman brewed the first batch of Sierra Nevada Pale Ale. It was a flavorful, hop-forward ale that began what has become a craft beer revolution.
The Brewers Association defines craft beer as: Small — annual production of 6 million barrels of beer or less; Independent — less than 25 percent of the craft brewery is owned or controlled by a beverage alcohol industry member that is not itself a craft brewer; and Traditional — A brewer that has a majority of its total beverage alcohol volume in beers where flavor derives from traditional or innovative brewing ingredients and their fermentation.
The U.S. craft beer industry has grown dramatically over the last several years. In 2013, while total beer production was down 1.9 percent, craft beer production increased 17.2 percent — to 7.8 percent overall market share by volume (Brewers Association).
In 2015, total beer production was down 0.2 percent, while craft increased 12.8 percent — to 12.2 percent overall market share by volume. While exact figures are difficult to determine, there are more than 5,300 craft breweries in the U.S., including at least 334 in Michigan alone (Halfpenny, pers. comm.). Nearly 50 percent of growth by volume can be attributed to hop-heavy India Pale Ales.
Hops (Humulus lupulus) are an essential ingredient in beer production. Brewers use hops for aroma and bittering, which counters the sweetness of malt, another main ingredient. Hops also have preservative qualities.
Humulus is the genus of herbaceous climbing plants that most likely originated in China, but is indigenous to temperate areas of the northern hemisphere including Asia, Europe, and N. America.
Humulus is one of the two genera in the Cannabinaceae family. The other is Cannabis.
Hops are dieoecious (separate male and female plants), perennial below ground, and produce annual bines from an overwintering rhizome (below-ground stem/root system). Only the female flower or “cone” is desirable for use in beer production. The cones are light green, papery, strobiles that contain Lupulin glands, which are home to alpha and beta acids and essential oils.
There are two distinct markets for hops: the alpha market where hops are used for bittering, and the aroma market where hops are used for flavor. Some varieties of hops are considered “dual purpose” and can be used for both.
The U.S. historically was the leading producer of alpha hops, which were sold to mega-brewers for bittering. Until 2008, 75-80 percent of U.S. acreage was planted to hi-alpha, bittering hops. With the dramatic growth of craft and aromatic beers (IPAs), 83 percent of U.S. acreage now is planted to aroma hops (2016).
From 1930-2015, total U.S. hop acreage has averaged between 20,000-40,000 acres. In 2016, there were more than 50,000 acres in the U.S.
The craft beer movement, local food and beverage trends, and favorable growing conditions have facilitated the development of new hop production enterprises in new or re-emerging regions. Of the 50,000 U.S. acres planted in 2016, 2,500 acres were planted outside of the Pacific Northwest (Washington, Oregon, Idaho).
Michigan currently is ranked fourth in hop production, with 800+ acres in the ground. While this pales in comparison to Washington state, if Michigan was a nation, it would rank in the top 15 globally. Not bad considering the first commercial hopyard was installed on Old Mission peninsula in 2007.
Within Michigan, Grand Traverse, Leelanau and Benzie counties account for more than two-thirds of the total statewide acreage. Growers throughout the state contend with a variety of challenges common to other agricultural industries — disease, insects, weather, marketing, competing with fifth-generation Pacific Northwest producers that grow proprietary varieties, obtaining virus- and disease-free plants, and more. Despite of these challenges, there are opportunities.
According to Nielsen Survey data, millennials are more interested than other age group in purchasing craft beer that has been brewed locally using local ingredients. Just within the last two years, sales of locally produced craft beer in major cities like Chicago and San Diego surpassed sales of all other craft beer combined.
This trend is likely to continue, and offers opportunities for Michigan hop producers to grow, analyze and market Michigan grown hops, which may have different flavor profiles when grown in our unique environment and climatic conditions. Brewers have noticed, for example, that Chinook hops grown in Michigan have more fruity, aromatic traits as compared to Chinook hops grown in the Pacific northwest.
As the craft beer revolution expands overseas, opportunities should become available for Michigan producers to export hops abroad.
Closer to home, many Michigan craft brewers are now featuring fresh wet-hopped harvest ales. These are only produced immediately after harvest, since the fresh-harvested hops are taken directly from the field to the brewery. Because of the proximity between Michigan hop producers and craft brewers, many wet-hopped harvest ales are produced using Michigan grown hops.
These delicious beers are available for only a limited time and should be consumed immediately for optimal flavor. I encourage you to try a Michigan craft beer produced using Michigan hops. You won’t be disappointed.
