The hop plant is responsible for the distinct flavor and aroma found in every beer. In 2007, poor harvests in Europe and Australia, as well as a depressed market price produced an insufficient world supply of hops. This discrepancy initiated an upwards price shock that has changed the nature of the craft segment of the beer industry. The effective utilization of supply chain risk management techniques allow breweries to decrease their costs and ensure the supply of the raw materials that they need to prosper. In my thesis I chose the medium of a nationwide survey sent to every member of the Brewers Association that provided an email address in the 2009/2010 Brewers Resource Directory as well as three interviews with Colorado brewers of different sizes. I received 110 responses to the survey, including the Sierra Nevada Brewing Co, the Stone Brewing Co and the Odell Brewing Co among others. I conducted my interviews with the Bristol Brewing Co in Colorado Springs, the New Belgium Brewing Co in Fort Collins and MillerCoors in Golden. It is my hypothesis that hops merchants engage in opportunistic pricing structures that quote smaller breweries at higher prices. By forming coops, micro brewers can increase their market power to better negotiate contracts with the hops merchants. I also discuss a variety of strategies that brewers could use to ensure a more stable price and supply of hops.
Bibliography : pages 85-88