There aren’t many better things than a big cold beer on a hot summer’s day. But, along with everything else it is threatening, climate change could put a stop to that.

Beer generally contains four ingredients: water, barley, yeast and hops. Water is the main ingredient, with barley providing starch that is converted into sugars, yeast does the fermentation and hops adds bitterness and flavour.

The bad news for beer lovers is that climate change could drastically reduce barley yields, leading to price increases and supply shortages, according to researchers at the University of East Angila.

“If you still want to still have a couple of pints of beer while you watch the football, then climate change [action] is the only way out,” The Guardian quotes Professor Dabo Guan as saying.

And this could hurt not only your thirst, but also your hip pocket, if you happen to be invested in one of the ASX’s two small cap beer stocks.

Broo (ASX:BEE) makes Broo Premium Lager and Australian Draught, and has become known for its innovative name and kangaroo-featuring logo.

The other small, independent beer brewer on the ASX, Gage Roads Brewing Co (ASX:GRB), makes four pale ales, an IPA and a cider.

Rather than be spooked about climate change, however, Broo executive director Kent Grogan says the beer industry is proactively seeking more sustainable methods to operate.

“The beer industry has historically been one of the world’s biggest consumers of water and power,” he tells Stockhead.

“Historically it has taken about five litres of water to produce one litre of beer, with that slowly coming down to about two-and-a-half litres of water through advances in technology over the years. At our facility we’ve been able to get that down to about 1.2 litres.”

Grogan says Broo aims to have zero carbon footprint and is looking to renewable energy for its power needs.

“It has been a conscious decision, and one that is being made across the industry,” he says. “We are planning to build the world’s greenest brewery in Ballarat and we want to be sourcing our power from renewables… I believe solar and wind are the best options.”

As for the barley issue, Broo can’t control the formidable forces of climate change, but it can look to operate more sustainably.

“We distribute spent barley as stock feed,” he says. “I would be surprised if anyone is wasting spent grain.”

Australian Whisky Holdings (ASX:AWY) and Digital Wine Ventures (ASX:DW8) are two further stocks which will need to be on the lookout for effects of a changing climate: whisky is often made from barley, while winemakers are already feeling the pinch on grape harvesting.

Featured Companies

You might be interested in