Declining Beer Demand in Industrial Countries Pressures German Hop Farming

Weaker demand in wealthy markets is having a direct impact on domestic producers. This year, the cultivation area shrank by 1,101 hectares, or just under six percent. Germany's total cultivation area this year thus stands at 17,861 hectares. Because 62 hop growers have given up the business, only 904 hop growers remain across all of Germany.

World's Largest Producer Under Pressure

According to Association President Adi Schapfl, Germany remains the world's largest hop producer: more than a third of globally cultivated hops are grown in the Federal Republic, followed by the USA and the Czech Republic in second and third place. The majority goes to export. This means the domestic harvest depends to a large extent on how much beer is consumed elsewhere.

Measured by cultivation area, hops – compared to corn or wheat – were already a niche crop even in good years. Precisely for this reason, consumption declines in industrialized countries have a disproportionately strong impact on the already small number of specialized operations. The loss of 62 producers in a single year illustrates the structural change that has been emerging in the industry for some time.

Niche Crop with Export Dependence

Association President Adi Schapfl views the development with concern. The cultivation area has declined significantly because demand is weakening in important sales markets. Global consumption is still growing slightly overall, but the shift toward markets outside wealthy industrialized countries is changing the calculations for German producers, who have so far primarily produced for export.

The situation on international beer markets is considered a decisive factor: declining per-capita consumption in Western Europe, North America, and parts of Asia is putting pressure on brewery order volumes and thus on contracts with hop farmers. Since hops are also a perennial crop, cultivation areas can only be adjusted to changing markets with a delay.

Outlook: Cultivation Area Follows Demand

The association, headquartered in Wolnzach in Upper Bavaria, represents the interests of the remaining producers. It closely monitors the consumption curve and export markets in order to advise its members on future cultivation decisions. According to the association's assessment, the size of next year's cultivation area will depend significantly on whether the trend in industrialized countries continues or recovers slightly.

For German agriculture, hops remain a small segment despite their economic significance. The current decline, however, exemplifies how global changes in consumption can severely impact even niche crops – and how quickly a production advantage grown over decades can come under pressure in a shrinking market.