Before an audience of more than 320 commercial brewers, homebrewers and others from the beer industry around the world, Brenton Roy talked about how difficult it was to be a hop grower just a few years ago.
Roy was part of a hop grower panel Aug. 31 at the Hop & Brew School, an annual event organized by Yakima Chief Hops.
“Five, six, seven years ago, we were on the verge of being out of the industry,” said Roy, of Oasis Farms in Prosser.
That’s far from the case now — Oasis Farms is among four new grower-owners for Yakima Chief Hops.
Joining Oasis Farms are Black Star Ranches in Moxee, Double ‘R’ Hop Ranches in Harrah and Coleman Agriculture in St. Paul, Ore.
They are the first new owners since 2014, when Yakima Chief Inc. and Hopunion, two separate grower-owned companies, merged into what is now Yakima Chief Hops.
The new grower-owners remember when Pacific Northwest hop farms primarily sold their crops to large breweries owned by multinational corporations. To those brewers, hops were a commodity ingredient to offset the sweetness in the beers they made.
The brewers who were present at the Hop & Brew School in August see it differently: They want and expect high-quality hops because it’s an essential ingredient for flavoring their beers.
“Hop growers were in the backdrop,” Ben St. Mary of Black Star Ranches said during the panel. “Now we’re in the spotlight.”
Bringing in new owners enables Yakima Chief Hops to better respond to a growing craft beer industry while spreading out the increased costs involved in ramping up operations, CEO Mike Goettl said in an August interview.
“We wanted to make sure we keep hop prices manageable for our brewery customers,” he said.
Pockets of growth
Much of the recent talk regarding the U.S. craft brewing industry has focused on slowing growth.
That is true, to an extent — craft breweries in the U.S. produced 25.6 million barrels of beer in 2018, a 3.9 percent increase year over year, according to the Brewers Association, a trade organization.
That’s well below the double-digit increases of just a few years ago.
The Brewers Association defines craft breweries as businesses that make beer, produce fewer than 6 million barrels annually and have no more than 25 percent ownership from a non-craft brewer.
The number of craft breweries, however, continues to grow at a more robust pace. There were 7,346 craft breweries in the U.S. 2018, a 13.2 percent increase year over year. Of the more than 850 breweries that opened in 2018, 69 percent (or 589 breweries) were microbreweries — breweries that produce fewer than 15,000 barrels of beer annually and sold at least 75 percent of their beer off-site either via a taproom or a retail outlet.
“You have a lot more (beer) on a smaller scale, on a localized level,” Goettl said.
There are more breweries opening in parts of the U.S. that historically didn’t have a lot of craft beer, such as the South, he said.
“I think we’re far from seeing complete coverage of the U.S.,” Goettl said.
Several states once had laws that limited craft breweries and the beer they made, said Steve Carpenter, chief supply chain officer for Yakima Chief Hops.
One such law limited the percentage of alcohol content of beer, “which isn’t conducive to hop-forward beers, which is typically a higher-alcohol beer,” Carpenter said.
States are beginning to increase the percentage or eliminate it entirely.
“That’s created opportunities for us to get hops down there,” Carpenter said.
Consumers who go to craft breweries value the sense of community they find there. They also value quality and want details about the beers they’re drinking.
“People want to buy beer made by people they know,” Goettl said.
That’s put Yakima Chief Hops, which has always played up its ownership by multi-generational family farms, in a good position.
Breweries, too, want to feel they’re working with companies that value community and quality, Goettl said.
“They want to know the story behind the hops,” he said. “They want to know it was produced in a way that is fair to the people who produced the product.”
IPAs going global
The company’s Hop & Brew School is one way for brewers to share that story.
Several hop suppliers here hold such events, which include tours of hop fields and breweries, to connect brewers with growers during the hop harvest.
The Yakima Chief Hops event attracted nearly 330 participants, including commercial brewers, homebrewers and distributors.
The latest session of the Hop and Brew School also illustrated another emerging trend in craft beer: Participants represented 18 countries, including Argentina, Japan and Mexico.
While the craft beer market is maturing in the U.S., it’s starting to emerge internationally as these countries are embracing hop-forward beer styles from the U.S. — such as IPAs — and combine them with their own culinary and beverage traditions.
The hops grown in the U.S. have flavors that allow breweries to experiment and localize it to their consumers’ tastes, Goettl said.
“IPAs are becoming very popular in Japan, but they’re using local ingredients like Yuzu (a type of citrus fruit),” he said. “In Vietnam, they’re adding dragon fruit and making it their own.”