Balance 2023 - Less beer and too much hops
Global beer production has decreased. A total of 188 billion liters of Beer were produced last year, according to the annual report of the world's largest hops trader, BarthHaas, based in Nuremberg. This represents a decrease of 0.9 percent or 1.7 billion liters compared to the previous year. The decline came unexpectedly: "Despite adverse conditions, we had expected a slight increase for 2023," says Peter Hintermeier, BarthHaas' business manager.
Germany defended its fifth place as a beer producer, despite a 3.3 percent decrease in beer output to approximately 8.5 billion liters. China topped the list with 35.9 billion liters, followed by the USA with 19.3 billion, Brazil with 14.9 billion, and Mexico with 14.2 billion liters. While China and the USA saw production decline significantly and moderately, respectively, Brazil and Mexico both saw slight increases.
"Consumers are complaining"
The future of beer production, according to BarthHaas, is uncertain. "The brewing industry is still feeling the effects of the Ukraine war," says Thomas Raiser, another business manager at the hops trader. "Consumers are complaining in many countries under the weight of high inflation. For the current year, we therefore expect only a stable beer output, but a clear trend for the future cannot be discerned."
At least hops will not be in short supply in the foreseeable future. The harvest yielded significantly more than the previous year, with 118,415 tons representing a 11.5 percent increase. However, this is also due to the weak comparison year, which was marked by drought, heat, and heavy storms.
The market is still oversupplied with alpha acid, the hop compound that provides the bitter note in beer. As a result, the cultivated area must be reduced to match the decreased demand. This trend began last year and continues this year, as indicated by numbers from the German Hop Growers Association a few weeks ago. The largest part of the decline, however, affects the USA, as reported by BarthHaas. As a result, Germany has regained the title of the world's largest hop producer by cultivated area in the current year. However, the USA still leads in harvested tons with 47,601 to 41,234 tons. The harvest for 2023 is still pending - the country that produces the most hops this year will be read about in the BarthHaas report next year.
Larger price impacts on beer are unlikely to result from developments at the hop market: The costs for the ingredient have little impact due to their relatively small share.
The United States of America, despite leading in harvested tons of hops, has experienced a significant decline in hop cultivated area due to oversupply.Brazil and Mexico, while producing less beer than last year, managed to slight increases in overall output.BarthHaas, recognizing the uncertainty in the future of beer production, expects only a stable beer output for the current year, but a clear trend remains unclear.Germany, due to a successful hops harvest, has regained its title as the world's largest hop producer by cultivated area.Despite the significant decrease in global beer production, the costs associated with hops, a key ingredient, are unlikely to have a substantial impact on beer prices.
