Hops & Adjuncts

Hops & Adjuncts Global Market Outlook

The global Hops market is expected to reach a value of at $231.9 million by the end of 2024, growing at a CAGR of 3.34 percent during 2020-2024
Global hops market driving factors are increasing demand for hops in medicinal drugs, cosmetic formulations and alcoholic beverages. Increasing demand for various flavors in beer such as pilsner or lager, the hops market is expected to increase significantly

GLOBAL CULTIVATION (2021 vs. 2022)

• ~62 Thousand Ha, 0.88 percent Ý

GLOBAL SUPPLY (2021 vs. 2022)

• ~130 Thousand MT, 7.2 percent Ý

The growth of hops varies across regions, due to the difference in prevailing climatic conditions, change in demand, preference of variety of hops, etc.

Demand Market Outlook

• Beer is the primary end-use for hops during the start of the pandemic panic-buying helped increase sales of beer at a retail level. Many breweries since then have found it challenging to forecast demand for hops and beer consumption in 2022.

Global Hops and Adjuncts Supply–Demand Analysis 

• The global Hops market is expected to reach a value of at $231.9 million by the end of 2024, growing at a CAGR of 3.34 percent.

• The global hops market driving factors are increasing demand for hops in medicinal drugs, cosmetic formulations and alcoholic beverages. Increasing demand for various flavors in beer such as pilsner or lager, the hops market is expected to increase significantly

Hops and Adjuncts - Global Trade Dynamics 

• The top exporters of hops were Germany, the US, the UK in 2021

• Import volumes, though have decreased in the European countries, had increased in APAC regions, such as China

Cost Structure Analysis - Hops

• Hop orchards start yielding after 4–6 years. The first phase mainly has cost focused on the facilitation of growing the crop, while the harvest and post-harvest, which is considered the second phase, have processing costs, such as drying and pelleting, which occupies over 61 percent of the cost

Cost Parameters in Production and Harvest

• Hop yields are cultivar dependent with full production for a variety, Cascade, for example, has at least 1,500 pounds of dried hops per acre

• Conservative annual yield estimates for year one are negligible, for year two, 50 percent production, for year three, 75 percent, and for years four and five, it is 100 percent

• It is assumed that wet hops contain 75 percent moisture and dried hops contain 10 percent moisture

Craft Brewing Industry Growth and Challenges to Large Breweries

• The craft beer segment accounts for ~1.2 percent of the global beer market volume. However, it consumes almost 10 times more aroma hops per bottle compared to large (traditional) volume beer manufacturing

• This emerging trend has, in turn, led to a shift in the demand from bitter to aroma hops across the US and EU

• As craft breweries mostly use an aroma variety of hops in beer formation, they require almost 10 times more hops in processing. This compels hop growers in the US to shift from bitter to aroma variety hops production to cater to the demand of the growing craft beer segment

• The global production ratio of aroma to bitter varieties is 52/48 in 2021 compared to a ratio of 47/53 in 2018. This will result in a supply deficit of bitter varieties for the large brewery, and it will lead to a high price realization in the future, which will affect their cost. Furthermore, the excessive load for bitter hops will be partly shared by Germany, with an increase in acreage for bitter varieties