June 29, 2010
West Coast Hop-A-Bout 2010: We love your pellets, we’re grateful for your investment, we admire your passion, but….

 

You load sixteen tons an' what do you get?
Another day older and deeper in debt.
St Peter don't you call me cause I can't go.
I owe my soul to the company store.
-- Jimmy Dean, hop dealer unknown

The setting: eager new hop merchant on hop-a-bout up the West Coast stopping off at craft breweries to field test big fat fresh 100% uncut Oregon-grown hop pellets. After six days and over a dozen brewer rap sessions, a dialogue blueprint has taken shape.

The dialogue goes something like the below. Note, this is a work of Rogue IPA induced fiction and none of the rhetoric is meant to be attributed to any particularly disgruntled brewer; as a whole brewers tend to be a "don't let the bastards grind you down" lot, as the happy-wappy snapshots attest):

IH: Thanks for meeting with me.

Brewer: My pleasure. We’ve heard about you upstarts at Indie Hops. Ambitious agenda you’ve got there. Thanks for funding that aroma hop breeding program at OSU.

IH: You’re welcome. We want to keep the pipeline full of new and improved varieties for years to come.

Brewer: I like your focus on aroma oils. We’re more than satisfied with the super alpha hops out of Yakima, but we could use more variety when it comes to flavoring hops.

IH: Yes, it’s a fascinating quest. So many questions, so many variables, so many palates, so many styles, so many oils, so little known about which to select and amplify. More linalool? More geraniol? More myrcene? We’re pleased to be able to create feedback loops between brewers like you, hop farmers, and the breeding scientists at OSU. It takes a team.

Brewer: I’ve heard about your pellet mill – the one you call a “patient” pelleting mill. Way to go on slowing down the process and keeping the die cool. I’d like to take a look at those pellets.

IH: Here you go. [Opens up a sample pack of Liberties.]

Brewer: Interesting. Bright green. [rolls the pellet between thumb and forefinger] Gummy. They stick to your fingers. I can see the bracts. No barbed wire, that's a plus.

IH: Yes, we tried to change the form of the flower without beating it to death.

Brewer: That makes sense. Less cut surface. Less damage to the lupulin. Coarser, less powdery.

IH: Drop a few pellets in a pint glass of water. Compare the absorption, diffusion and settling against your current hop supplier’s pellets.

Brewer: My my. Yours certainly behave like a whole flower, more buoyant, good suspension, excellent expansion, better chance of extracting the oils. I wonder how they perform for dry hopping.

IH: Why don’t you try them on a test batch?

Brewer: We’d like to. We’ll only know how good they truly are when we actually brew with them. I know you work with excellent farmers, and the Willamette Valley is pretty well known as a superior terroir for aroma varieties.

IH: Great. We appreciate the validation. And, just so you know, these pellets are from the 2009 crop, which we pelleted in late April, when we finished building our new pellet mill. In 2010, we’ll be able to pelletize within a few days of receiving our bales from our nearby farm partners. I’m not aware of any merchant who converts frozen bales of fresh hops within a few weeks of harvest.

Brewer: That sounds great. I’m very curious about the quality of freshly pelleted fresh hops from a mill that ‘s designed to preserve as much lupulin as possible. It all sounds very new, exciting and quality-driven, which is why I got into the business.

IH: Wonderful! Yes, there’s a hand-crafted, artisanal element to our mission, which we were hoping you would appreciate. So, can we supply you with a few hundred pounds?

Brewer: No.

IH: No?

Brewer: Yes. No. I mean, we’d like to, but we can’t.

IH: Why can’t you?

Brewer: Because we are locked in by onerous, long-term contracts with the Yakima Cartel.

IH: The "Yakima Cartel? "

Brewer: All the dealers up in Yakima, who like derivatives traders on Wall Street made gobs of money when the supply was going down and are now making oodles when the supply is going up and price is plummeting.

IH: I don’t understand.

Brewer [peeved]: A few years ago we couldn’t get the hops we wanted. We were told there was a shortage. We were desperate. Our hop prices for the varieties we were lucky to get jumped from $4 to $6 a pound to $20 to $30 a pound. The Yakima dealers swooped in and told us to sign forward contracts. In a panic, we signed. Now we’re paying interest and storage fees on hops from the 2008 harvest that are sitting in a cold storage in Yakima that we can’t use or don’t want. We have more hops than we need. Hell, now we’re ‘hop dealers’ ourselves, trying to sell our excess on the “spot” market, but who wants to buy Willamettes for $30 a pound when today you can get it for a fraction of that?

IH: Why don’t you renegotiate? I’m sure your dealer is sympathetic to your plight.

Brewer: “Sympathetic” as a loan shark. We tried to renegotiate. Even threatened to walk on the contact. I mean, it wasn't exactly an arm's length deal. They had all the inside crop, price and supply data. We were too busy brewing. Yes, yes, they’ll say nobody held a gun to our head but that’s gibberish. Without hops, we can’t make beer. They knew our demand was rising. They put in the hop farm contracts. They knew about the shift towards higher alpha. They own all the pellet mills and cold storage. There wasn't a savage storm or pest invasion that wiped out US, German or English crops. They had to see this “scarcity” coming.

IH: Ugly stuff that. I can see why the larger merchants would focus on higher alpha hops for an extract hungry industrial brewer market. But at least one of the merchants prided itself as "serving" the craft community.

Brewer: Oh we got served. They'll blame it on us for not locking in the aroma varieties we love. But if they're role is to 'bank' hops, wouldnt they forsee our needs and contract with farmers accordingly? Has Indie Hops waited for brewer contracts before contracting with farmers?

IH: No, we canvassed what we thought you guys needed, plus a few varieties that we thought you should try, and invested the money. That's a risk we are willing to take.

Brewer: Exactly. The Yakima crew didn't lock in the craft varieties, shifted the risk to us, and when shortages arose, they jacked the prices up, and exploited the panic by locking us into long term contracts without explaining the farmer costs, processing costs, and margins. Just "sign this or suffer."

Whatever the cause, it certainly showed a lack of leadership, vision, partnership or whatever you want to call it by the Yakima merchants for the needs of crafties. But now that the price has dropped into the basement, won’t they agree to bend a little bit? I mean, I lived in Houston. Every summer there’d be a hurricane down in Galveston which would knock out the water supply and every year an opportunist would get arrested for trying to sell water for $10 a gallon. Gouging is illegal.

Brewer: They’ll agree to lower their prices only if we agree to extend the contract another few years. It’s like a jail cell marriage – to survive today, not only do you have to agree to take it where the sun don’t shine, but you have to agree to add more time to your prison term. It’s, it’s….

IH: . . . Indentured servitude?

Brewer: Yeah, something like that. We just have to rise up, break the chains, stick it to The Man. . .

IH: Well, that would seem to be consistent with your rap as craft revolutionaries. Don’t want to foment a fight, but we do want to offer an alternative. to merchants more interested in transactions than trust. At least a chance to go head-to-head and compete on a level playing field.

Brewer: You’ll get your chance, hang in there. Thanks for the samples. I think I'll call my Yakkety Yak up and tell them to lower their prices or we'll deal with you.

IH: Well, that might help you get to sleep tonite, but in the morning you'd still wake up in bed with a pig.

Brewer: Good point. I need to sack up and . . .

RGW

6/29/10

 
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