How climate change and COVID-19 are threatening your beloved IPA

Brewers today are faced with two crises, COVID-19 and climate change, that are affecting the way beer is being consumed, valued, and produced. The crises pose particular threats to smaller manufacturers who must find ways to be sustainable and resilient while ensuring that they still turn a profit.

Like most other businesses in the service industry, breweries have been forced to respond to the pandemic by closing their doors to in-room tap sales, which has caused a steady drop in customers. The other crisis is less visible.

Beer, which is a resource-heavy product, depends heavily on water. Approximately seven barrels of water are needed to brew one barrel of beer. When factoring in the amount of water that is used in agricultural processes to grow the hops, malt, and barley that beer requires, the amount skyrockets to about 11-40 barrels of water for a single barrel of beer.

Chris Swersey, a supply chain specialist and competition manager for the Brewers Association, a nonprofit trade association of American craft brewers, said that these crops are shifting. Barley, for instance, “is starting to concentrate more and more north of the border,” Swersey said, as climate change has made the crop harder to grow in the US.

On a practical level, climate change impacts brewers’ wallets, thanks to higher costs for resources such as water and energy, Swersey said. He added that industry giants such as Anheuser-Busch and Coors are all investing heavily in finding new drought- and heat-resistant hops and barley. “Sustainability does not just mean doing the right thing. Sustainability literally means that. How am I going to contribute to the ongoing sustainability of my business? You know, the existence of my business?”

Swersey believes that small-scale brewers are less equipped to deal with the challenges posed by the changing climate. After all, he said, “they don’t have hundred million -dollar budgets.”

Local breweries balance sustainability and profit

When Shawn Phillips retired from a 24-year career in the Marine Corps in 2013, he decided he wanted to make beer in an environmentally conscious way, relying heavily on locally sourced ingredients and eco-friendly business practices. Two years later, Phillips realized his dream and opened Spencer Devon Brewing in historic downtown Fredericksburg, Va.

A former military logistician, Phillips hates waste. As much as possible, he relies on grain harvested in Virginia and homegrown yeast and malt. Doing so reduces his business’ burden on the environment and supports the local economy. Plus, shorter supply chains, he said, “just make sense” in terms of resiliency.

For a while, things were going great at Spencer Devon Brewing. Then COVID-19 came, and Phillips’ revenues plummeted, resulting in a loss he estimates at around 85-90% percent of his profits.

In recent days, he’s had to compromise on how to approach his business. Because of the governmental restrictions placed on the brewery during the pandemic, he uses single-use products such as paper plates and trays, disposable plastics, and pre-packaged condiments. While he tries to only buy recyclable paper products and reusable glassware, Phillips knows this is bad for the environment and climate change.

He’s also started selling growlers, which he said also produce some waste but are a necessary revenue stream that’s helping to keep the business afloat. Since climate change threatens scarce water resources and is changing the way some ingredients are grown, “it is incumbent upon breweries to do whatever they can to negate their consumption rate of water,” said Phillips, whose sustainability practice also includes using leftover grain from brewing on feedlots at local farms instead of tossing it out.

While he’s willing to make some compromises to keep his business running, he said he will not shift over to making seltzers no matter how trendy they are. “I think that they distract from the craft of brewing.”

Brian Roberts is the owner of Mad Science Brewing in Frederick, Md. and has a Master’s degree in environmental science.

Unlike Phillips, Roberts said that Mad Science Brewing has not been under as much duress during the pandemic. He started canning their beer last year, which has enabled him to rely more on carry out sales. Roberts said he’s seen a slight rise in sales even with reduced hours.

Still, he believes that climate change is absolutely something brewers need to be concerned about. The changing weather, he said, means that brewers have to change the way they source ingredients for brewing. And depending on how precious resources like hops, water, and wheat become, they will likely be forced to innovate or produce less beer and spirits.

“Some brewers are doing a really great job at innovating technologies to be able to reuse water and prevent waste in their practices,” he added.

Consumers may pay more for sustainability

Aaron Staples, an academic researcher based at Michigan State University, has been studying how consumer decisions drive the way brewers make beer. In a soon-to-be-published study, Staples found that consumers were willing to pay more for beer that was brewed in a more environmentally conscious way.

In what is known as a “choice experiment,” groups were given the choice of beers with different labels and pricing. Staples said that “on average, consumers were willing to pay 70 cents more per six pack when it’s brewed with water or wastewater reduction practices, about 85 cents for carbon reduction, and 98 cents for landfill diversion.”

The study found that “you could attract more consumers to your beer, increasing the probability that someone picks your beer off the shelf, if you can differentiate your product through the sustainability labels or graphics of some sort,” Staples said.

He also noted that this finding applies to people who go into a store looking for a new beer to try out. In other words, they are the kind of consumers who may be open to a more sustainable choice for their next beer purchase.