Providing Access to Hops for the World's Craft Brewers – Hopunion

Providing Access to Hops for the World’s Craft Brewers – Hopunion

Read how Hopunion in Yakima, Wash., provides international craft brewers with direct market access to hops, a key ingredient in every style of beer worldwide.

Providing Access to Hops for the World's Craft Brewers – Hopunion

A beer revolution is sweeping the globe, giving Washington’s Hopunion the power to provide hop growers and brewers access to the wonderfully bitter rewards.

Visitors see the tiny green cones growing on the endless rows of trellises throughout central Washington’s Yakima Valley, and they’re stumped. What are those things? Packed like tightly clustered clotheslines, the structures stretch out in all directions between foothills of the Cascade Mountains.

“I’ve never had anybody guess what they are,” says Dave McFadden, the head of the Yakima County Development Association.

That, beer lovers will tell you, is hops, the only agricultural product in the world that has only one purpose: making beer.

Hops are a key ingredient in every style of beer, giving the planet’s most popular alcoholic beverage its characteristic bitterness and punchy aromas. In the Yakima Valley, where more than 75 percent of America’s hops were grown last year, they’ve been the life’s work of generations of farming families.

Hopunion LLC helps form the supply chain of the industry, buying hops from farms and shipping them to breweries around the globe. There are a handful of other hop dealers in the valley, but one major thing sets Hopunion apart. It chooses to shun the large brewing conglomerates like Anheuser-Busch InBev and MillerCoors, instead providing the fast-growing segment of smaller, independent “craft breweries” with that key ingredient, and it has blossomed by doing so, with revenue growing 1,900 percent since 2002. (Craft brewers are defined by the Brewers Association as those that produce less than 6 million barrels annually, are at least 75 percent independently owned and avoid substituting rice and corn for malted barley in their recipes to cut costs.)

Tapping into the rising global demand for craft beer, Hopunion has brought the Access Effect to the Yakima Valley. It pumps money into the local economy and provides full-time jobs to 48 people and counting, while delivering some much-needed stability to farmers in the process.

Ralph Olson, a co-owner and founder of Hopunion who’s known in the beer world as the de facto mayor of hop country, has watched craft beer come of age. “I started the craft brewing thing in the hop industry way back when,” he says. “In the early ’80s it was just a sideline. There was hardly anybody. I remember someone like Ken Grossman, with Sierra Nevada, was going to start a little brewery,” Olson says. “It really wasn’t any customers, but I saw the future.”

That “little brewery,” Sierra Nevada Brewing Company of Chico, Calif., is now the country’s second-largest craft beer maker. According to Bill Manley, the brewery’s spokesman, less than 500 barrels of beer left the brewery in its first year three decades ago. Last year, it sold roughly 760,000 barrels.

Craft brewers are “shaking up the entire global beer industry,” says Julia Herz of the Brewers Association trade group. Back in 1978, there were only 42 breweries in the entire U.S., Herz notes. Now there are more than 1,700, nearly all craft brewers. A beer renaissance has taken hold in America and abroad, and it’s showing no sign of slowing down.

A New Brewing Landscape

Olson got into the hop industry in the late ’70s. In 2001, after years of heading up the increasingly lucrative craft side of the business for large international hop dealers, he drafted six hop-growing families from the Yakima Valley and Oregon’s Willamette Valley to band together and help him buy Hopunion from its German owner. He plans to retire officially this summer, leaving the company in the middle of an unprecedented period of growth.

Hopunion Landscape

“We’ve had back-to-back record years,” says Don Bryant, the new head of Hopunion. In 2002, the company’s first full year on its own, revenue reached $2 million. “Last year we did $40 million,” Bryant says. “We’re projected to do $100 million in three years.” He expects that the number of full-time employees will rise to 60 by the end of next year, with as many as 100 on hand during the annual harvest rush.

The craft beer craze was already in full swing when Olson formed Hopunion, but since then it’s continued to ramp up. Last year, while the overall volume of beer consumption in America dropped 1 percent, craft brewers saw their sales revenue increase 12 percent.

More beer drinkers in America and around the world are passing up brews by the large conglomerates in favor of craft beers by companies such as the Boston Beer Company, makers of Samuel Adams, New Belgium Brewing and Dogfish Head Craft Brewed Ales. When they do, they’re savoring hops that almost certainly passed through the warehouses at Hopunion.

“We probably do business with almost every craft brewery in North America,” says Bryant, who joined Hopunion in 2009 after working for Procter & Gamble and the Gallo wine company. But Hopunion’s customers are spread much farther than North America.

“We go to Australia, Italy, Greece, Japan, Taiwan, Mexico, South America” and elsewhere, says Jennifer Stevens, Hopunion’s Director of Procurement and Inside Sales. Including Canada and Mexico, international clients currently account for approximately 20 percent of the company’s business, Stevens says. And according to Bryant, the company uses FedEx for roughly a quarter of its total shipments.

Hopunion has seen its reach ratchet up dramatically as of late, but, as Olson notes, American hops have been traveling to distant lands for some time.

“I’ve gotten hops to every continent in the world. Which one do you think is the toughest?

“Antarctica,” he says, laughing. “They brew their own beer down there” at the South Pole research station.

On the Farm

The Yakima Valley, whose population stands at about 240,000, is among the largest agricultural areas in the country. Hops, the valley’s second most valuable crop behind apples, are an especially labor-heavy product, with their bines — vines that grow around a support without attaching to it — needing to be trained to lines of twine in the spring, cut down one by one for harvesting in the fall and then sent through machines to pull off their flowers, or cones.

Hops, humulus lupulus flowers
The flowers of the humulus lupulus plant, hops are thought to have been first used in beer making around the year 1000.

Thus, the Washington hop industry employs somewhere in the neighborhood
of 3,000 full- and part-time workers, says Ann George, the administrator of both the Hop Growers of America and the Washington Hop Commission. Last year, the 65.5-million-pound U.S. crop was valued at close to $313 million after processing, and more than 52 million of those pounds, 23 percent of the entire world’s production, came from the area around Yakima.

“We produce the cheapest alpha acid in the world here in the Yakima Valley,” says George, referring to the chemical inside hops that gives bitterness to beer and helps ward off bacteria. “We can pump it out by the truckload. And we’re kind of the pork bellies of the hop industry here: It’s an industrial-scale, low-cost, very efficient operation.”

During the harvest, as many as 200 workers make their way past the emerald rows of hops along Highway 24 to C&C Hop Farms Inc. in Moxee, Wash., seven miles southeast of Yakima. For three generations the farm has been owned by the Charron family, and it’s now one of only 40-some-odd family farms that produce all of Washington’s hops. Bob Charron, his sister Cindy Charron-Houser and brother-in-law, Keith Houser, grow between 800 and 900 acres of hops at C&C’s three sites, as well as 250 acres of apples and about 18 acres of cherries.

“We diversify because it helps with the labor situation,” says Houser, while outside the farm’s office, near fields filled with dormant hops, a half dozen workers go through their late winter ritual of breaking up bales of twine preparing for hop bines to poke up from the ground. The hop industry is hugely labor intensive, Charron says, and growing a variety of crops gives the farm “a steadier workforce.”

Ann George agrees, noting that as opposed to places that rotate crops like wheat or vegetables, the Yakima Valley has “a pretty strong base of permanent crops that need a consistent amount of labor year after year after year.

“We’re able to keep that workforce here long-term, and they become important members of the community, their kids go to the schools, they’re here. They’re here and very important contributors to the economy of the valley.”

After Washington’s large slice of the hop production pie comes Oregon, where the Willamette Valley, home to three of Hopunion’s partner farms, turns out close to 15 percent of the U.S. crop. (Idaho accounts for the country’s remaining production.)

According to Pat O’Connor of the Oregon Employment Department, 35 businesses make up the state’s hop industry, “which amounts to 24 families that grow,” he says. “We’re small compared to Washington.” Still, George’s records indicate that close to 600 people make their living full- and part-time in the hop industry in Oregon.

A Changing Game for Growers

Hop growers have long been at the mercy of the large brewing conglomerates, whose products still account for more than 95 percent of the beer sold in America. That share may look big, but it’s been shrinking steadily as of late. Craft beer has shown “continual growth year after year in the last 10 years,” says Herz of the Brewers Association, whose data shows that U.S. craft beer sales totaled $7.6 billion in 2010.

Brewers in 32 countries depend on Hopunion
Brewing companies in 32 countries depend on Hopunion for the ingredient without which they could make no beer at all.

For mega-brewers, hops are nothing more than alpha-acid delivery systems, and so they contract growers to produce only hops packed full of the bittering agent, varieties with names like Columbus, Tomahawk and Zeus. When a large brewer decides to change a recipe, the move can have disastrous effects on farms.

For instance, “Anheuser-Busch backed away from Willamettes,” says Houser, referring to a long-popular variety. “They took an 80 percent reduction over the last two to three years.” That pushed one of the country’s largest growers, Roy Farms, to go so far as to offer free Willamette hops to anyone willing to come pick them at its farm in Moxee.

Craft brewers, on the other hand, treat hops less like a commodity, favoring the rather citrusy or pine-like aromas and flavors of certain varieties, such as Cascade, Simcoe, Citra and Amarillo, to make hop-heavy beers like India Pale Ales. Hopunion works with craft brewers to determine their needs and then communicates with growers so they can plant accordingly, allowing them to tap into the relatively small but growing demand for specialty hops.

“Our direct deal to the craft brewing industry is through our relationship with Hopunion,” hop farmer Houser says, which allows them to have “a better understanding of what hops we need to grow, or not grow.”

Currently, about 35 percent of C&C’s crop is contracted to Hopunion. A hops shortage in 2007 brought spikes in prices and dealers’ profits. It also kept many craft brewers from getting the hops they needed, so today, more brewers are signing contracts to buy hops in advance rather than risking the open market at brewing time.

Fresh Endeavor

Once hops are harvested, dried and pressed into 200-pound bales at the farms, they’re picked up by trucks and, like bees bringing pollen to the hive, toted to Hopunion and other dealers in Yakima, such as John I. Haas, S.S. Steiner and Yakima Chief. Yakima Chief purchased a stake in a division of Hopunion in 2006.

Hops arriving at Hopunion in 200-pound bales
Hops arrive at Hopunion pressed into 200-pound bales.

Hopunion loads the bales into five mammoth cold-storage warehouses, and from there most of the hops enter a long processing pipeline, eventually arriving in its pelletizing plant, where they’re sent through a series of machines that form the most potent parts of the flowers into compact, easy-to-use pieces.

Recently, however, an ever-larger part of the mountain of hops has begun arriving at Hopunion straight off the bine. These “wet hops,” as they’re called, are used to make a popular seasonal beer style known as fresh hop ale. Filled with juicy, crisp hop flavors, the style has become a passion among beer drinkers.

Since hop cones are composed mostly of water and will mold if not dried or tossed into a brew kettle within a short time of being harvested, fresh hop ale was long confined to the West Coast. Now, with help from FedEx, Hopunion has begun spreading the joys of fresh hop ale around the country. Hopunion’s Bryant notes that in a 48-hour period during last year’s harvest, 30,000 pounds of fresh hops went out to homebrewers and small brewers all over North America. That’s “more than twice as much as we’ve ever done before,” he says.

Hopunion is buzzing with activity these days. The main offices are undergoing renovations, investments are being made in an on-site laboratory, a small brewhouse is being installed for the company to make its own high-end beers, and a push is under way to tap into the burgeoning craft beer scene in Brazil. It’s clear that for Hopunion, good beer has also become good business.

“The nice thing is, now craft’s driving the bus,” Bryant says. “Historically, it was all A.B.; it was all the big guys. So we’re having a little bit of fun now having some leverage.”

Add a Comment

Please note, your comment will not appear until approved, and all fields are required. Your email address will not be published.