As we mentioned last month, craft beer produced by small local breweries is one of the new industry trends entrepreneurs are taking advantage of. But with a shortage of hops and price increases for other ingredients, beer prices are rising worldwide, according to an AOL News article.
Sales for craft beers rose 31 percent over the past three years, giving hope to an industry that has been losing sales to wine and cocktails. But harvests of hops in the U.S. were down this year likely due to excessive heat in the western states, while drought and other weather problems have affected crops around the world. In addition, rising prices for barley, wheat and production materials are said to have an additional impact on small breweries that are unable to negotiate prices for raw materials as successfully as their larger counterparts. As a result, some craft brewers are having to alter their recipes or raise their prices to make up for the shortages and price spikes.
"Brewers are trying to take pricing up, but it's hard when beer is pretty sensitive to pricing per volume--and when drinkers are leaving beer to go to wine and spirits," Harry Schuhmacher, editor of Beer Business Daily, said in the article.
However, Schuhmacher adds that small breweries have more leeway in raising prices without losing consumers than the bigger companies.