Germany Hops Market

Hops production in Germany reached 42.23 thousand tonnes with a gross production value (GPV) market size of US$ 271.35 million in 2023. Germany holds the position of the world's second-largest producer of hops, representing nearly 30-32% of the global market share. In 2023, Germany exported hops and its derivatives, including extracts, hop cones, and other forms, valued at US$ 147.16 million. Among the primary importers of German hop cones and extracts are Japan, China, Russia, the USA, and the UK. Notably, Japan emerges as the largest importer from Germany, with purchases totaling US$ 32.58 million in hops and hop extracts.

Importance of Germany in the Global Supply of Hops

Germany holds a prominent position in the global hops market, owing to its long-standing tradition of beer brewing and high-quality hop production. The country's favorable climate and soil conditions make it ideal for hop cultivation. German hops are highly sought after by brewers worldwide for their distinctive aroma and flavor profiles.

Germany is a key player in the global hops supply chain, with its products being essential for the brewing industry worldwide. Its reputation for producing high-quality hops has solidified its position as a leading supplier in the market.

Germany Hops Production & Demand Trend

Production: Germany is one of the largest hop producers globally, with regions such as Hallertau and Tettnang being renowned for their hop cultivation.

Demand: The demand for German hops remains consistently high due to their superior quality and unique characteristics favored by brewers. The majority of the hop production in Germany is consumed domestically by breweries, fulfilling the local demand, while also meeting the requirements for export.

Market Growth Factors

■ Growing Craft Beer Industry: The rise of the craft beer movement globally has increased the demand for specialty hops, driving growth in the German hops market.
■ Expanding Beer Consumption: As beer consumption continues to rise, especially in emerging markets, the demand for hops, particularly premium varieties, is expected to increase.

Market Restraints & Challenges

■ Climate Change: Changing weather patterns and extreme weather events pose a challenge to hop cultivation, affecting yields and quality
■ Competition from Other Regions: Competition from other hop-producing regions, such as the USA and New Zealand, presents a challenge to German hop growers.

Germany Hops Supply/ Value Chain Bottlenecks/ Challenges

The hops supply chain in Germany faces challenges like labor shortages, infrastructure limitations, weather risks, pest management, supply chain disruptions, sustainability concerns, and market volatility.

Market Volatility: The hops market is subject to fluctuations in demand, supply, and prices, which can create uncertainty for growers, processors, and traders. Market volatility may arise from factors such as changes in consumer preferences, shifts in brewing trends, global economic conditions, and geopolitical events. Managing market volatility requires agility, risk management strategies, and diversification of market channels.

Supply Chain Disruptions: Disruptions in the hops supply chain, such as transportation delays, logistical issues, or trade barriers, can impact the timely delivery of hops to brewers. Supply chain disruptions may occur due to factors such as natural disasters, geopolitical tensions, or global health crises, as evidenced by the disruptions caused by the COVID-19 pandemic.

Addressing these bottlenecks and challenges requires collaboration across the hops supply chain, including growers, processors, traders, and policymakers. Investing in research and innovation, improving infrastructure, promoting sustainable practices, and fostering resilience to external shocks are essential for enhancing the competitiveness and sustainability of the German hops industry.

Hops Price Setting Power of Germany

Price trends in the hops market are subject to numerous influences, including crop yields, demand-supply balance, quality considerations, market dynamics, and external factors such as currency fluctuations and trade policies. These elements collectively shape the trajectory of prices over time.

A key determinant of price trends is the interplay between supply and demand dynamics. For instance, fluctuations in crop yields due to weather conditions or changes in cultivation practices can directly impact the supply of hops. Low yields may lead to scarcity and consequently drive prices upwards, while abundant harvests can result in oversupply and price reductions.

Demand for hops is influenced by factors such as evolving consumer preferences, shifts in brewing trends, and the growth of the craft beer industry. The emergence of new beer styles and the increasing popularity of hop-forward brews have fueled demand for specialty hop varieties, thereby exerting upward pressure on prices.

Competition from other hop-producing regions, each with its unique offerings and advantages, can limit the price setting power of German hops producers, especially in price-sensitive market segments. Tariffs, import/export regulations, and government subsidies can affect the competitiveness of hops producers and influence pricing dynamics in domestic and international markets.

Overall, while German hops enjoy a strong reputation and price-setting power due to their quality and heritage, price trends are subject to a complex interplay of factors. Producers must closely monitor market conditions, adapt to changing demand-supply dynamics, and invest in maintaining product quality and brand equity to sustain their pricing competitiveness in the global hops market.

Hops End-use Industries

■ The demand for hops is driven primarily by the brewing industry, including both large-scale breweries and craft breweries.
■ Growing consumer preference for unique and flavorful beers fuels the demand for specialty hops.

Germany has a rich brewing tradition and is one of the largest beer producers globally. In Germany, there's a strong preference for traditional beer styles, resulting in relatively modest demand for craft beer. Nevertheless, ongoing innovations in craft brewing may draw more consumers in the future.

Germany holds the title of the largest beer producer in Europe and ranks as the fifth largest beer producer globally, as well as the fourth largest exporter of beer worldwide. In 2023, German breweries sold around 84 million hectoliters of beer (excluding non-alcoholic varieties and imports from outside the EU) which is down by 4.5% compared 2022. Germany domestic market sales of beer declined by 4.2% and exports by 5.9% in 2023 compared to 2022.

Germany Hops Trade (Export & Import) Trend

Germany is a significant exporter of hops, supplying to breweries worldwide. Import trends may include niche varieties not commonly grown in Germany to meet the diverse needs of brewers.

In 2023, Germany exported hops and its derivatives, which encompassed extracts, hop cones (both fresh and dried), and powder/pellet forms, totaling a value of US$ 147.16 million. These exports comprised 3.49 thousand tonnes of hops extracts and 20.44 thousand tonnes of hop cones. The primary importers of Germany hop cones & extracts include Japan, China, Russia, USA, and U.K. Notably, Japan is largest importer from Germany and US$ 32.58 million valued hops and extracts of hops from Germany.

Germany Hops Market Competitive Analysis

German hops producers benefit from their long-standing reputation for quality and reliability. Companies such as Hopsteiner, Joh. Barth & Sohn, and Hopfengut Hopfenhalle are key players in the German hops market. Largest hops end-use breweries include Radeberger Group, Anheuser-Busch InBev, Krombacher brewery, Bitburger Brewery Group, and Oettinger Brauerei GmbH.

Key Companies in Germany Hops Market include (Producers/ Processors/ Exporters),

■ Hopsteiner
■ BarthHaas GmbH & Co. KG
■ Simon H. Steiner, Hopfen, GmbH
■ Hildegard Eisemann GmbH & Co. KG
■ Hopfenveredlung St. Johann GmbH
■ Lupex GmbH
■ Hopfen Reitmeier
■ HVG e.G.

Future Outlook

The future of the German hops market looks promising, driven by the continued demand for high-quality hops from brewers worldwide. Innovations in cultivation techniques, sustainable practices, and product development are expected to shape the market's growth trajectory.

Overall, the German hops market's strength lies in its reputation for quality, which positions it as a key player in the global brewing industry. However, addressing challenges such as climate change and increasing competition will be crucial for sustaining growth and maintaining market leadership.