Craft brewers increasing demand for Washington hops

By Kristi Pihl, Tri-City HeraldJanuary 5, 2014 

white bluffs brewing brewmaster beer hops aroma

Mike Sutherland, brewmaster and owner of White Bluffs Brewing in Richland, contracts two years ahead for the aroma hops he needs for his beers. The demand for aroma hops has been growing due to increased popularity of craft beers.

KAI-HUEI YAU — Tri-City Herald Buy Photo

Washington farmers may have boosted hop production in recent years, but it still remains a challenge for small craft breweries to get the hops they need to make their beer.

Mike Sutherland, owner and brewmaster of White Bluffs Brewing in Richland, says he has to secure a contract two years in advance to get the hops he wants. Last year, he made about 500 kegs.

The growing demand for craft brews like Sutherland's has prompted more farmers to plant the aroma hops that craft breweries use to add herbal, fruity, floral and citrus flavors to their brews.

It's also led to an increase in production, with Washington farmers harvesting more than 54.9 million pounds of hops last year, up 13 percent from 2012, according to the U.S. Department of Agriculture.

Hops farmer Dan Newhouse, co-owner of Irving Newhouse & Sons near Sunnyside, said he used to think microbreweries were a fad. But over the past decade, craft beer has continued to gain in popularity, especially in the past few years.

It seems to be a shift, rather than an anomaly, he said. And that's a good thing for hop farmers because craft breweries tend to use more hops per barrel than mass-produced beers.

The United States produces the second most hops in the world, after Germany, according to data from Hop Growers of America. Washington grows about 79 percent of the nation's hops, according to the USDA.

Shifting demand

Washington farmers used to primarily grow alpha hops, which act as the bittering agent in beer, said Ann George, administrator for Hop Growers of America. At one point that made up about 70 percent of the state's production.

But with craft breweries, aroma hops have grown in demand. This year, the amount of aroma and alpha hops were about even in Washington. George expects to see that grow to about 60 percent aroma hops this year or in 2015.

It's a challenge, since aroma varieties can be more sensitive to excessive heat, Newhouse said. Last year's hot summer meant some varieties did not fare well. But overall, yields were OK, he said.

Washington has a conducive growing season for hops, which can be planted and harvested during their first year, George said. Farmers can produce cheap, high-quality alpha hops effectively, with much of those hops exported to other countries.

But the demand for alpha hops has been mostly flat, Newhouse said.

Meanwhile, demand for aroma varieties such as Cascade, Chinook and Centennial have exploded, George said. Now, about 50 percent to 60 percent of the U.S. hops crop goes to the craft industry.

George expects to see more demand for some of the newer aroma varieties, such as Mosaic and Simcoe.

Washington farmers grew 382 acres of Mosaic last year. During the two previous years, there were too few acres for the variety to be individually named. Production of Simcoe has grown from 495 acres in 2011, to 940 in 2012, then up to 1,298 acres last year.

Flavors of aroma hops can vary widely, Newhouse said. At Irving Newhouse & Sons, about a dozen varieties are grown, with a couple dozen more possibilities in a nursery.

"All these breweries want to be unique and they want their beer to stand out," Newhouse said. Hops is one way to accomplish that.

Craft beer used to be a small percentage of beer volume, George said. But it has kept chugging along, reaching about 10 percent of beer volume a couple of years ago.

There are consumers who would rather drink one or two high-quality beers than a six pack, and who will participate in beer tastings and beer pairings like some do with wines, George said.

"I think that we will see continued phenomenal growth here for a few more years," George said. Then, it's likely to become more moderate.

Complex crop

Craft brewing has been a bright spot for an industry that has struggled with a pattern of acreage expansion and reduction in response to demand.

Hops, which are made into pellets or an extract after harvest, can be stored for quite some time, George said. That means for several years, farmers produce less than the demand to use up an oversupply.

Since 1990, the state's acreage has varied between almost 32,000 acres to less than 20,000 acres, according to data from the Hop Growers of America.

For the past two years, hop acreage has grown to reach more than 27,000 acres, according to the USDA.

The average price has gone from $1.44 per pound in 1990, to a high of $4.08 per pound in 2008. Last year, the price was about $3.68 per pound.

The fluctuation is a challenge for growers, since hops are too expensive of a crop for banks to be willing to take a risk on farmers adding noncontracted acres, George said. Merchant companies contract with growers for hops that they will then sell and bigger breweries will contract with growers or with merchants.

The crop requires a lot of investment, including in trellises and drying facilities, Newhouse said. Insects and disease are expensive to control, and it's a high-labor crop.

Hops are perennial and will return year after year. But farmers tend to switch varieties in response to market demand before the plants become unproductive, Newhouse said.

When the hop plant goes dormant, everything above ground dies, Newhouse said. Then the plant comes back from the roots in spring. The heads of the vines, or the growing top of the plant, will follow the sun around the twine on the trellis. Each day, the head makes another revolution.

During harvest, farmers remove the entire vine, he said. In one year, it will grow from the ground up about 18 feet.

Brewing beer

Part of the challenge craft breweries have been facing is the growth of the industry. As of June 2013, there were almost 2,500 craft breweries nationwide, according to the Boulder, Colo.-based Brewers Association. That was nearly 500 more than in 2011.

And those breweries are all competing for hops, Sutherland said.

At White Bluffs Brewing, Sutherland said he's had to substitute hops he could find for those he wanted before he started contracting for the specific varieties he uses in his recipes.

The popular India Pale Ales, called IPAs, are heavy on aroma and alpha hops, Sutherland said. IPAs tend to be bitter with a citrus, tropical fruit or melon flavor.

And area breweries say they don't expect the demand for craft beers to decline.

Craft beers are flavorful, said Geoff Gruetzmacher of Richland's Growler Guys. And it's that taste that has helped make them popular.

Growler Guys offers about 41 craft beers that are rotated through the taps.

"You can taste all the ingredients," he said.

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