In the middle of these two large companies, craft beers seek to make a place for themselves. The largest number of factories are located in the Province of Buenos Aires (45%) and the second and third place is occupied by the City of Buenos Aires with 8% and Córdoba with 6%. The rest is distributed throughout the country, especially in Patagonia. More than 320 craft breweries generate more than 2,000 jobs. The majority are family SMEs where only 4% of the factories have more than 30 employees.
The companies that are within the Chamber, more than 132, only 5% of them have exports to different countries such as China, the US and Europe. “Although these exports have not increased in the last period, but they have been maintained,” he commented Juan Manuel González Insfrán, President of the CCAA in dialogue with Ámbito. In most cases, they are not interested in exporting for at least three reasons: 1) lack of capacity to produce larger volumes 2) difficulties in the export system 3) problems in distribution and quality control since beers need adequate refrigeration and care in relation to oxygen. In most cases, craft breweries supply an increasingly demanding domestic market.
According to a survey of Ambit by three craft beer factories in Bariloche -Berlina, Wesley and Patagonia Bariloche-, produce from 24,000 to 100,000 liters per month. In the case of Berlina, it has the capacity to export 10,000 liters.
Hops: a vital raw material, in lack
Any beer is made with at least four basic ingredients: water, yeast, malt, and hops. The latter is an essential raw material for the preparation, despite the fact that it represents a small percentage in relation to the other components. But what is the peculiarity? Hops are important to brewers as they help distinguish beers and find new flavors and varieties. In particular, the IPA products that we usually know depend on hop alternatives that are not manufactured in Argentina but abroad. The sector is facing a complex moment due not only to shortages of hops but also to Suppliers shy away from the payment alternatives proposed by breweries due to the obstacles to accessing dollars.
“Argentina produces some varieties of hops and achieves a harvest of 300 tons per year. In the beer segment, 700 tons per year are consumed, this has been increasing year after year. This is due to the great work that SMEs have been doing in presenting styles with a greater presence of hops that also generates new market niche openings”, commented Insfrán.
Berlina, one of the best-known breweries in Bariloche, imports hops from China, Germany, Belgium and England to achieve its varieties. This plant costs around US$12 to US$30 per kilo. “It is very difficult to import inputs, there is only one producer that can import in January, the industrial companies import what they want. There are shortages, that is supply and demand and the price goes up, it is difficult”expressed Guido Ferrari, one of the Berlina brothers in dialogue with Ámbito.
Other breweries, such as the case of Patagonia, use hops from Río Negro and El Bolsón. However, this alternative is not enough given the growth in demand due to shortages of imported hops.
“Hops don’t come from the US, you have to start doing what you already have without changing the beer. It’s very difficult, especially now that they don’t give you dollars. This year it got complicated,” said one of the Wesleys from Cervecería Wesley in consultation with Scope. “You have to adapt and use a lot of ingenuity. The industrial companies are the ones that concentrate on the market and we began to get into the crack.”
In most queries, Brewers say that, as in other industries, the new SIRA system, which replaced SIMI, caused delays in import approvals, which, in many cases, forced them either not to produce the beers that require more hops in quantity or to look for alternatives so as not to stop production.
Imports: there are already lists with premiums
According to a recent report by the Chamber of Craft Brewers of Argentina, 40% of brewers consider that there is a total shortage in the market, while 30% consider that there is some shortage. However, over 58% consider that there is a complete lack of hops. With malt, however, 40% consider that there is something lacking. Regarding the bottles, more than 40% believe that there is a partial lack in the market.
“An extra cost that breweries have is the bottle itself. There are shortages of glass, in a market with three bidders”who set their own price“, expressed from Wesley. This situation forces many SMEs to import glass to avoid speculative maneuvers.
According to the CCAA, the treatment of SIRA “has not been entirely beneficial from its implementation to date, 98% of companies do not import on their own, they have seen their stock reduced and the system worsened of payments that had to be made once the SIRA was approved. Lists of suppliers that bring hops with increases of up to 30% in dollars are already appearing. This clearly means that the available stock that these distributors have is coming to an end and it is necessary to replenish it as quickly as possible,” they commented.
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Craft beer: can there be a price increase?
Craft breweries brew their varieties with up to 8 grams per liter of hops. According to Insfrán, the IPA variety, which is the one with the highest concentration of hops and is the most consumed by Argentines, may “disappear or be for a very exclusive segment.” In addition, he did not rule out a price increase due to the differentiation of values.
“The transfer to the price of the product is really very complicated for SMEs. Transferring these prices to a supermarket that cannot increase more than 3% and to a medium-sized company, it costs a lot to place the product when we make these products.”
Franco Lapenna, President of the Chamber of Brewers of Bariloche A change in consumer behavior is observed: “since the post-pandemic period, consumption fell a lot, logically also because people are tighter with the inflation issue, they do not have the possibilities of consuming the same things they used to go out before. He is taking care of his pocket a bit. Beers are being sold in more places but much less quantity”.
In this context, Insfrán revealed the significant competition that exists between the craft beer sector and industrial ones: “multinationals also enter the segment generating dumping, placing their equipment with premium brands in gastronomic establishments. This increasingly generates less possibility of access the market. When a beer company closes, this is not occupied by another craft brewer, it is occupied by companies that belong to large groups. We are heading towards a rather complicated scenario for beer producers,” he concluded.
This week, the craft brewers will meet with the Secretary of Commerce to discuss and find a solution to the problem of imports.
Source: Ambito
