Craft Breweries Keep Pouring Into Market, But Is There a Bubble?

Oct 2, 2013

Northwest farmers are wrapping up this year’s hop harvest at a time when the craft beer industry is seeing huge growth. The change in Americans’ beer-drinking habits means hop farmers are selling more of their crop to smaller breweries than ever before. But all this success begs the question: is there a craft brew bubble?

Patrick Smith is a fourth-generation hop grower. He guides me inside his family’s hop-drying plant in Moxee, Washington. 

Beds of hop cones dry out recently in a massive kiln in Moxee, Washington.
Beds of hop cones dry out recently in a massive kiln in Moxee, Washington.
Credit Anna King

Imagine a grocery store filled with nothing but hop beds 2½feet deep. Massive heaters blow air up through the bright-green hops. It feels like a high-priced sauna.

“Yeah, it’s pretty humid,” Smith said. “We’ve got to dry off tens of thousands of pounds of moisture in each one of these beds.” 

Smith says he uses some of the same technology his grandfather did. But the customers are very different, and so is the product. His family used to grow mostly alpha hops to extract a bitter oil for large-scale breweries. Now, Smith’s family grows mostly aroma hops for craft breweries. Those are less bitter and have more complex flavors. 

“The United States hop industry is rapidly shifting acreage away from alpha hops to aroma hops to meet that growing demand,” Smith said.

In 1978, there were 48 breweries in America. Now, there are 2,600. Smith says he’ll see where the family stands a few years down the road, “but for now, the future of craft brewing looks bright.”

“And what’s good for the craft brewer at least in the last few years has been good for the hop grower,” he added. “We look forward to continued good times in both of those industries.” 

Meghann Quinn, center, along with her brothers and husband have started up Bale Breaker Brewing Company.
Meghann Quinn, center, along with her brothers and husband have started up Bale Breaker Brewing Company.
Credit Anna King

The Smith family thinks so much of the craft brew business that they’ve started their own, called Bale Breaker Brewing Company, right on their hop farm. It comes in cans, not bottles. Smith’s sister, Meghann Quinn, says they haven’t ben able to keep up with demand since opening in April. 

“So we have two more fermenters coming. They will actually arrive in about two weeks. That will actually double the amount of beer we can make out of this facility, which will be good,” Quinn said.

But will the growth of craft breweries come to a head? Julia Herz with the National Brewers Association says no; there’s still more room than supply. 

“We get asked a lot should there be more breweries, and that would be like asking the National Restaurant Association if there should another restaurant down the street. And the answer is: of course. If they can make word-class product and differentiate themselves, they absolutely will be able to service their customers,” Herz said.

And that demand will have a lasting impact on the beer industry. Joshua Bernstein, a New York-based writer and book author who specializes in beer, says younger consumers don’t tend to go back to traditional beers after they try local craft brews. 

“When you’re 21 you have a great IPA and you understand what a great beer is, you know, you can make your distinction. You want to have your Bud, or your Bud Light—and that’s totally fine. But you understand what a quality beer is at a much younger age,” he said.

Bernstein says just as with food, another top trend in craft brew is the careful sourcing of hops, barley, and wheat. There are already several craft breweries in the Northwest growing their own ingredients just like Bale Breaker. Patrons there can see the hop harvest happening just outside the brewery’s windows.