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Hops growers rush to meet rising demand

Crop grown heavily in Washington in sort supply due to popularity of craft breweries

The Columbian
Published: June 21, 2015, 12:00am
2 Photos
Lines are strung in a hop field in Moxee. Spectacular growth in production of craft beer across the U.S.
Lines are strung in a hop field in Moxee. Spectacular growth in production of craft beer across the U.S. has led to a big increase in the production of hops, a boon for farmers in the Yakima Valley, where 75 percent of the nation's hops are produced. Photo Gallery

Vancouver craft brewers say that navigating the hops market for their brews is a tricky business, requiring purchase commitments years in advance of need and a keen sense of keeping up with changing tastes among beer drinkers.

While local brewers say that common varieties of hops are not generally in short supply from growers in Washington and Oregon, the small-quantity brewers say they are competing with major players in the beer market in purchasing the most highly coveted varieties of the flavorful flowers. Industry veterans say those starting in the booming craft brewing industry sometimes fail to consider the importance of lining up a supply of hops that adequately meet demand if a brew hits a high note with beer lovers.

Brewers use hops to add bitter flavor and aroma to beer. While major brewers use a blend of commonly available hops, craft brewers look for strong and distinct flavors, and typically use far more hops than are found in major beer brands. Many of the most desired hops are patented, giving growers a captive market if brewers use those hops for a popular beer variety.

Craft beers are a booming business in the Portland-Vancouver area, with sales as a percentage of beer sales far exceeding the national average. With 256 craft brewers, Washington ranks fifth in the nation per capita, according to the Boulder, Colo.-based Brewers Association. Oregon, with 216 craft brewers, is second per capita in the nation. After years of scant brewpub offerings in Vancouver, the local craft brewing industry has taken hold in the city’s downtown with several new and popular pubs. On June 26, Heathen Brewing Feral Public House will add to the mix with its new pub at 1109 Washington St. in downtown Vancouver.

Steve Bader, whose Bader Beer & Wine Supply in Vancouver sells to home and small craft brewers, said crossbreeding hops varieties produces new flavors that can move in and out of popularity very quickly. Because hops require three years from planting to harvest, the challenge for growers and brewers is to catch the wave of popularity at the right moment.

The hops industry, which once met predictable demand for limited varieties from major brewers, has had to adapt to demand for richer varieties from a large number of craft brewers, Bader said.

“What’s happened in the past 15 years is that brewers went from using the same 30 hops in every beer to using crossbred varieties that are becoming highly popular,” he said.

Hops with citrus and grapefruit flavors have come on strong, and tropical flavors are now appealing to beer drinkers. But, Bader said, tastes can be fickle.

“There are varieties people get excited about, and the next thing you know, they are in low demand.”

Growers, unwilling to invest three years in a crop that might end up out of favor with brewers and their customers, generally demand contracts three years in advance of purchase. Sunny Parsons, owner of Vancouver’s Heathen Brewery, said it’s tough to know in 2015 what hops to buy, and how much, in 2018.

“That’s the really hard part for the small guys,” he said.

A miscalculation means that those small craft brewers are buying “the leftovers from the big boys” to meet their needs.

“It’s quite the racket,” he said.

Tom Poffenroth, co-owner and brewer at Vancouver’s Loowit Brewing Co., said he buys most of his hops from growers in Oregon’s Willamette Valley. Poffenroth said its easy for inexperienced brewers to underestimate the need for lining up an adequate supply of the precious flower.

“When people are thinking of starting a brewery that’s one of the last things they think about ,” he said.

— Gordon Oliver

These are good times for growers such as Ben St. Mary. He stood at his family’s farm in Washington recently and watched as employees built trellises where a new field of hops, the key ingredient in the flavoring of beer, will grow.

“We’re riding a pretty good wave right now,” said St. Mary, whose Black Star Ranch in Moxee grows hops on 670 acres. “The whole craft beer thing is great.”

Hops are in short supply because of the dramatic increase in the popularity of craft breweries. That has growers in the Yakima Valley, which produces 75 percent of the nation’s hops, rushing to expand their production.

Hops are cone-shaped plants that are added to beer during the brewing process to add bitterness and flavoring. In Washington, acreage grew more than 6 percent in 2014 from the year before, and is projected to rise 10 percent this year, industry officials said.

Craft beers typically use four to five times more hops in the brewing process than blander mass-produced beers. The steady rise in the popularity of craft beers in recent years caught the hops industry, which had been in a slump, by surprise.

St. Mary understands that brewers are worried about getting the hops they need. “It’s caught them off guard,” he said. Last year, Blackstar Ranch added 35 acres of hops and this year they are putting in 45 more acres, St. Mary said.

Mitch Steele, brewmaster for Stone Brewing Co. in Escondido, Calif., agreed that “hop usage is outpacing supply.” Stone Brewing, one of the nation’s largest craft breweries, typically contracts several years out for its hops.

“When beer volume projections change, we get into trouble with some varieties,” Steele said. So far, Stone Brewing has been able to buy or trade for the hops it needs, he said.

But some brewers have had to curtail production because of the shortage, he said. It’s not just the hops plants that are in short supply, Steele said. More processing facilities that dry and bale the plant are also needed, he said.

Tomme Arthur, chief operating officer of The Lost Abbey in San Marcos, Calif., said their solution is to contract for more hops than they need.

“For the past three years, we have sold off our surplus to friends and other brewers in need,” Arthur said. But they will likely quit doing that as the brewery is expecting growth of some 20 percent per year, he said.

Paul Gatza, director of the Brewers Association, a Boulder, Colo.-based group that represents 2,500 craft brewers, said prices for hops are climbing as the supply remains tight. The group has a goal of 20 percent of market share belonging to craft brewers by 2020, up from 11 percent now, he said.

To grow hops, farmers must build 18-foot tall trellis systems that the plants climb as they grow. It costs $8,000 to $10,000 an acre, and the crop is highly labor intensive.

Hops are not widely grown. The Yakima Valley, for instance, grows 25 percent of the world’s supply. Oregon and Idaho are the other big hop producers in this country. Overseas, Germany and the Czech Republic grow hops.

Ann George, administrator of Hop Growers of America, based in Moxee, said the hop market is divided among two basic types.

Alpha hops are used to flavor traditional mass market beers, George said. What’s new is the rising demand for aroma hops, which add unique bitterness and other strong flavors to beer.

The U.S. grew 10,000 acres of aroma hops in 2010. That number rose to 24,000 by 2014, George said. Acreage devoted to alpha hops is dropping. Meanwhile, prices for aroma hops climbed to $3.83 per pound, up 13 percent from 2013.

Aroma hops can also impart a wider variety of additional flavors, including fruity, citrus, chocolate, mango or other notes, to beer, George said.

The demand for hops has spawned interest from farmers in other states, such as Michigan, Montana and New York, George said. Hops grow best along the 45th parallel, she said.

Vancouver craft brewers say that navigating the hops market for their brews is a tricky business, requiring purchase commitments years in advance of need and a keen sense of keeping up with changing tastes among beer drinkers.

While local brewers say that common varieties of hops are not generally in short supply from growers in Washington and Oregon, the small-quantity brewers say they are competing with major players in the beer market in purchasing the most highly coveted varieties of the flavorful flowers. Industry veterans say those starting in the booming craft brewing industry sometimes fail to consider the importance of lining up a supply of hops that adequately meet demand if a brew hits a high note with beer lovers.

Brewers use hops to add bitter flavor and aroma to beer. While major brewers use a blend of commonly available hops, craft brewers look for strong and distinct flavors, and typically use far more hops than are found in major beer brands. Many of the most desired hops are patented, giving growers a captive market if brewers use those hops for a popular beer variety.

Craft beers are a booming business in the Portland-Vancouver area, with sales as a percentage of beer sales far exceeding the national average. With 256 craft brewers, Washington ranks fifth in the nation per capita, according to the Boulder, Colo.-based Brewers Association. Oregon, with 216 craft brewers, is second per capita in the nation. After years of scant brewpub offerings in Vancouver, the local craft brewing industry has taken hold in the city's downtown with several new and popular pubs. On June 26, Heathen Brewing Feral Public House will add to the mix with its new pub at 1109 Washington St. in downtown Vancouver.

Steve Bader, whose Bader Beer & Wine Supply in Vancouver sells to home and small craft brewers, said crossbreeding hops varieties produces new flavors that can move in and out of popularity very quickly. Because hops require three years from planting to harvest, the challenge for growers and brewers is to catch the wave of popularity at the right moment.

The hops industry, which once met predictable demand for limited varieties from major brewers, has had to adapt to demand for richer varieties from a large number of craft brewers, Bader said.

"What's happened in the past 15 years is that brewers went from using the same 30 hops in every beer to using crossbred varieties that are becoming highly popular," he said.

Hops with citrus and grapefruit flavors have come on strong, and tropical flavors are now appealing to beer drinkers. But, Bader said, tastes can be fickle.

"There are varieties people get excited about, and the next thing you know, they are in low demand."

Growers, unwilling to invest three years in a crop that might end up out of favor with brewers and their customers, generally demand contracts three years in advance of purchase. Sunny Parsons, owner of Vancouver's Heathen Brewery, said it's tough to know in 2015 what hops to buy, and how much, in 2018.

"That's the really hard part for the small guys," he said.

A miscalculation means that those small craft brewers are buying "the leftovers from the big boys" to meet their needs.

"It's quite the racket," he said.

Tom Poffenroth, co-owner and brewer at Vancouver's Loowit Brewing Co., said he buys most of his hops from growers in Oregon's Willamette Valley. Poffenroth said its easy for inexperienced brewers to underestimate the need for lining up an adequate supply of the precious flower.

"When people are thinking of starting a brewery that's one of the last things they think about ," he said.

-- Gordon Oliver

It can take two to three years to get a field into full production, she said.

Traditional beers use a quarter to a fifth of a pound of hops per 31-gallon barrel of beer, George said. Craft beers use about 1.4 pounds of hops per barrel, she said.

Growing hops has not always been a good business in the past 20 years, when oversupply caused demand to plummet and some growers to go out of business, George said. Then came the worldwide economic downturn of 2008.

“We found out beer was not recession-proof,” George said.

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