I was just listening to a discussion about Lagunitas going global. One person mentioned how that kind of thing might impact small craft breweries, and I suppose all of us to some degree. My understanding is that the monsters kind of have free reign on hop contracting. I imagine that AB or Coors or Heineken could call Yakima and get what they want easier than, for example, pFreim in Hood River. I wonder how that might play out in the future. Imagine Lagunitas growing to the size of Bud and having giant breweries in 50 or 100 other countries. Multiplying the demand for hops but not the availability. Imagine if there were as many bottles of Hop Stupid as there are Bud Light. You may say that will never happen, and I agree you are probably right, but probably right not because the market will never exist. Probably right because there can only be so much hops produced.
The Lagunitas deal may not have a large impact in the next few years, but if they accomplish their goal, it has to have an impact at some point. What if 5 or 6 breweries like them all went global?
I’m curious what some of our resident craft brewers think. Are we looking at a Hopocolypes?
That is why smaller breweries have hop contracts. The growers use contracted hops to justify going to the bank for a loan to put more new hops in the fields. There are ones that deal on the spot market, but volatility can be a problem there (availability and price).
The big breweries have contracts too, but some of those would be for Alpha hops that are turned into extract.
Mitch Steele covered what the effects of growing craft beer sales may have on the craft beer market on his blog. It’s pretty chilling to think that the megas have the power to do whatever they want.
The way I hear it, contracts dont guarantee that the brewery gets its contracted hops though. A monster can make a call and end up with them, and the craft sized guys are out of luck, contract or no. Marshalls latest test may prove valuable. Maybe we should start squirreling away pellets for the future.
Yep. If Big Beer wants to buy up all of the Amarillo to make syrupy “Pale Ales” then fine with me. I’ll just move on to other hops and call it a day. Good excuse to try something different anyway.
Maybe we can create a couple thousand profiles on the beer rating sites and start raving the hell out of some garlic bomb 100% chinook IIIPA… let the mega marketers chase that ghost a while
Exactly. It’s a cool thing that there’s such an explosion of new late hop varieties being grown now. Worst case you could stockpile some Magnum and Columbus to bitter most beers and buy the lesser known ‘castoffs’, many of which are excellent, to use late.
Really? I know there are clauses due to poor crop years so that you get prorated amounts of what you contracted. If they can sell out from under you, what kind of a contract is that?
That is how it’s been explained to me. Brewery commits to buying, but grower isn’t committed. IF they have them, great. If they don’t have what they want they can sub out. Like if they don’t have cascade, maybe you can sub simcoe or mt hood.
It’s a contract to buy. If the grower has the hops then the buyer has to buy them at the agreed price but the grower is not committed to tender the hops to fulfill the contract. Generally the farmers are going to fulfill contracts because they want those guarantees before committing cash to fields but they don’t want to be on the hook for paying the costs of a bad harvest caused by natural factors.
Yeah, I get that part about the poor crop harvest. One of the local breweries only got 1/2 or 2/3 of the Saaz contract back in 2007/2008 due to the poor harvest in Saaz region. Adjustment had to be made to keep a popular beer flowing.
What I was questioning them selling to the highest bidder, i.e. the big brewers. Do the farmers and brokers sell to the highest bidder in a poor year, not honoring the contracted portion? The spot market would be the Wild West, as it can be.
