So, Your Ingredient Costs are Doubling...

[beertje46]

what are you doing?

This topic has been floating around the BA Forum with no real responses, so I thought I'd throw it out here.

[scott isham]

Has anyone got any real information on what the price increase is going to be? I've been asking around and nobody has any info other than there is going to be a rise in malt prices. Somebody has to have some sort of idea by now.

[BMOOR]

I've heard about .10/lb, but that of course was not confirmed. Doesn't seem like much, but that is 30% of base malt price.

I was in desperate need of a .25 cent increase on beers at our pub. This increase, in effect 9/1, will help quite a bit. (3.75 pints up to 4.00 pints; seasonals stayed at 4.25) Chicago suburb market.
Also, as a 600 bbl/year brewpub where we use a lot less ingredients in a year and 65% of gross comes from restaurant side, I think we won't see much hurt.

[Captain Mullet]

2007 Cascade price at around $10 a pound.

http://www.probrewer.com/vbulletin/showthread.php?t=8916

[frigatebay]

I switch my base malt and use a little more specialty grains. Dropped low alpha hops for bittering and added high alpha. I'm not sure the market will allow for too much of a price increase

[MatthewS]

Being that we are just starting to build our new brewery, I feel that we are at a slight advantage when it comes to the pricing/inventory issues. You see.. we have not made beer with certain ingredients for so long that we don't want to change them. I am using the best possible ingredients for the money and will settle on not using a certain malt because of price. i also am looking at inventory of hops...ugg but I have chosen wisely based on what HopUnion is telling us... I just contracted for our hops and figured for about 14 months worth. I went with more high alpha then I would have typically but it makes sense nowadays.

What is everyone else doing?

Matthew


EDIT... just to clarify.. in no way do I feel like I am compromising the quality of my products by purchasing certain malts that are cheaper. in fact, I believe the malts we have chosen are world class, and may be alittle cheaper than some overly 'popular' varieties that have a name attached.

[scott isham]

I heard Castle Malt is going up seven cents per pound and Wyermann is going up 40%, this comes from Brewers Supply Group.

[Captain Mullet]

My cost of raw materials, (malt, hops, H2O treatment and yeast) runs between 6% and 11%. The increase in pricing is not going to effect my beer, I am not going to make changes. We do an all grain Double IPA,for each barrel we use 120 pounds of Maris Otter, and 4.3 pounds of hops, (2006 price for these hops $7.50 a pound). This beer is our 2nd most popular, if we start making changes to the beer I can trust that sales will drop.

To save on the high cost of the malt our second runnings go for a Bitter. We get around and extra 0.7 bbls of wort per barrel at around 1.040 or 10 degrees Plato.

I also prop my own yeast. The cost of a lab for propagation is frugal over time and pitchable quantities of yeast.

[lhall]

Munton's Pale malt is going up 10 cents a lb by the container load, and a good bit more by the pallet, according to Crosby and Baker. Weyermann is also going up 10-15 cents a lb too they say,

[Alex T]

Hi,

Yes, malt and hops are increasing dramatically. Over the past two years there have been harvest issues for both of these commodoties.

Malt is looking to increase by up to 100%, depending on your individual contracts, existing prices, supplier, etc. There is generally an undersupply of malt and a net increase of brewing in the world (fuelled by large growth in China and Eastern Europe). The only thing that will take pressure off this price rise is a fantastic harvest in all global areas - if you are in the US and the US has a good harvest, it does not mean that you will necessarily see a reduction in price - the global brewers are competing for the materials which is driving price up.

Hops are also in the second year of devastating harvests. There is a serious undersupply issue coming out of the Cz Rep, and many Saaz contracts (and similar varieties) cannot be filled - so many people have to look towards alternatives. With a few other disasters around (i.e. recent ones in Oregon and Idaho, and eastern europe), combined with lower alpha yields, pricing is currently skyrocketing. 2006 supply issues have carried foward to 2007, and now 2007 issues will carry foward to 2008.....

So perhaps get ready for some price increases......

Alex

[Greenbrewmonkey]

Hello All,

As my prices rise, so must my prices rise. The market will bear it. They have to. Just as I pay over $3 a gallon for gas, they have to. If quality is there, I will pay the price. My issue this year is; prices went up, and quality down. This I take issue with. As should all. I will switch my purchasing on quality, not price. Price up, quality down, I look elsewhere. Price up (everywhere) and quality the same, well then, we can talk. Brew the beer you want to brew. Just raise your prices. You have to. I am. The people who appreciate your beer will understand, and thank you for not compromising.

Cheers,
Ron
Jolly Pumpkin Artisan Ales
PS But at the same time, demand from your suppliers that they supply more, better, barley and hops! We are small, but we are mighty!

[Beersmith]

Amen Brother Ron!

I too agree with Ron - don't change your beer or decrease the quality of your ingredients. The market will bear it - we are all pretty much at the mercy of global market conditions for our inputs and everyone will have to either increase prices or eat the difference.

Forecast and Contract!
I have been hearing for years that small brewers should be prepared to contract our ingredients. I started years ago with certified organic hops, last year I locked up our Cascade supply, and I'm really glad I did this year again -they were still reasonably priced back in July. And finally bulk malt for this harvest year.

FYI, I was told a couple of weeks ago by our malt supplier to expect some malt increases as high as 70%.

[frigatebay]

I guess I should clarify something. I switched brewers, I'm a contract brewery, and found that I prefer my new malt, Canada malting to my old malt, Franco belges and its cheaper which is a great bonus.

K

[Buckley]

I just switched my base pale malt from weyer. to crisp. Mostly because they batches I did with the weyer were at least 1 plato short of what it should have been. After switching to crisp my numbers are right it was a couple of cents cheaper and honestly i prefer the taste =)

[Larry Horwitz]

Raise your price. We are. Most beer isn't expensive enough anyway.

[dubo11]

Does anyone know why Muntons stopped distributing American Pale Malt? Crosby and Baker told me they went to put in an order and Muntons told them they stopped production and offered no other explanation.

[frigatebay]

I'd love to raise my price, I retail for 7.99/6pack which is the going rate for local beer around my neighborhood. I'm waiting for the first one to go up and I'll follow suit a day later.

[Mike Hall]

Why wait be a leader. on average a 20 BBl batch run's 400+$'s and with the new price increase's a 20 BBl batch will run 750+$'s. Can we say 11+$ 6 pack's January first.

[einhorn]

Just read this morning: the head of EU Agriculture has decided to allow farmers in the EU to use their entire land for growing grain. Up until yesterday, farmers were required to NOT plant 10% of their crop land. Experts are expecting approximatley an additional 10 million tons of grain on the market next year.

This is, of course, more so to go with industrial grains as with brewing malt. Nonetheless, due to increased prices in brewing malt, I could imagine that by next year the prices of european malts will head back to a "normal" level.

Prosit

[DrSuds]

Sir:

I am afraid that the cost of brewing beer is going to take a very nasty turn for the the worse in the near future. We are being quoted rediculously high numbers for malt for the upcoming calendar year. I won't give numbers because everyone is working on adifferent contract schedule but we are looking at a 50% increase. I have heard of 100% increases. It is going to be a lot tougher to keep the cost of goods under control. Perhaps we should look at contract malting through an independent to save some money.
The discussions will defenitely have to come around to brewhouse effeciencies. We have to be able to establish 1 to 2% more yield above what we are doing now.
Unfortunately, the ideal of making the best beer in the world will be tempered by a more aggressive cost accounting towards brewing. Reduction in production losses will be critical.
Other than that it will be great tob a brewer.

[nohandslance]

Last year we were buying our malting barley for 7.00/ a 100. or to make it simple : 50 Pounds for $3.50 (Metcalf 2-Row), This year it is now $6.25 for 50 pounds.
Depending on geographical area add an additional 20% - 30%, if we have a harsh cold beginning to the winter months.

[yog]

Last year we were buying our malting barley for 7.00/ a 100. or to make it simple : 50 Pounds for $3.50 (Metcalf 2-Row), This year it is now $6.25 for 50 pounds.

I take it that is for raw 2-row.

In UK Muntons has just given us price hike of nearly 40% for crushed grain. To be reviewed in December.

One other problem here in addition to poor harvests is that farmers are now getting subsidies to grow crops for use as bio-diesel and are turning field over to growing crops other than barley.

This will add less than £0.02 to a pint so gonna have to swallow this for now.

Still, there are no bean counters in my brewery yet!

[dicksbeer]

My bulk grain increased 51 % under contrat for 2008. Thats not a real problem. Hop prices have increased from $3.15 per pound to $19.95 pound if supply last. $14.95 a six pack for Barley Wine? The question is not the price are you going to get any. Hop Union predicts some breweries will not get any hops.I see a lot of capital investment in the brewing business being postponed until the hop issue is resloved.why expand your brewery if you cann't get hops to brew more beer? Sad situation indeed.If the price of beer goes to high will our customers switch to another beverage?

[frigatebay]

Am I the only one not hearing the same price increase as Dicksbeer mention? I'm only expecting 25% on malt and 50% or so for hops? Maybe I should give my suppliers another call.

I wouldn't mind getting 14.95 for a 6 of BW. How come no one has started to raise prices yet or have I not seem them yet?

[frigatebay]

Well I just checked malt yeah its 50% percent more. Being a contract brewer I dont pay as close attention as possible.

[PMR]

I'm just in construction on my first brewery that I'm working to open in January of 2008. It seems like every bad thing that could happen is happening as far as materials goes-- first with the price of stainless, then the price and availability of glass, and now hops and malt. Luckily I was able to procure enough hops for my first ~1000 bbl from the 2006 harvest at a reasonable price. I plan to contract for the 2008 harvest as soon as I can (I'm told the first of the year). As for malt, I've been told the supply issues are not as bad as hops, so I'm taking it one order at a time. I'll be using domestic malt since quality and price of European malt is not favorable at this time. I'll probably look to contract grain once I get a better idea of how much beer I'll be making.

Good luck to everyone. For those who can't get hops, don't rule out other bittering plants/herbs (wormwood, tea tannin, heather, etc.). I know I'll be looking at some of these just in case!

[DancingCamel]

PMR -

What do you mean by tea tannin - never heard of this in beer.

[PMR]

DancingCamel: Just an idea at providing bitterness through tannins-- not a traditional ingredient in beer. You'd probably want to use it for a portion of bittering in conjunction with bittering hops. Just thinking outside of the box! :)