Drought conditions in Europe and the U.S., and disease in the UK, led to a poor hops harvest in 2015 that has some brewers scrambling to source the ingredient, according to a report by CNBC.
With the number of breweries exploding across the U.S. and Europe, the fight for quality hops is all ready intense and increasingly expensive. Add to that a poor harvest from adverse weather conditions, and it could spell disaster for some breweries—specifically, those that purchase hops on the “spot” market.
Larger and more established breweries typically purchase multi-year contracts for their hops, but smaller breweries who cannot afford to purchase hops contracts rely on purchasing their hops as needed on the spot market.
However, even the breweries who have contracts aren’t immune to the effects of the poor harvest. According to the report by CNBC, with the crop 20 to 25 percent lower than the average harvest, traders had to renegotiate many of the European long-term contracts with their customers.