Azacca® Hops – Spotlight

The American Dwarf Hop Association released the Azacca® hop variety several years ago as one of their first forays into the proprietary aroma hop market. Don’t let the word proprietary scare you in this case. Access is not an issue with Azacca®. Supplies are managed responsibly to meet all the demand out there, not intentionally creating shortage to jack up the price. Speaking of price … You also won’t have sticker shock when you see the price. They are much more reasonably priced than some of the other proprietary varieties that have given “proprietary” a bad name. Azacca® popularity grows with each passing year as brewers become more familiar with the exotic flavors it brings to the table, particularly mango and pineapple.

Azacca® is an aroma hop but delivers high alpha 14-16%. It posses a mild bitterness so you won’t find its alpha spoiling the flavors you’re looking for. We see breweries using Azacca® hops in all sorts of ways, from IPAs to sours and every time it seems to delivery amazing flavor. It seems, however, the most positive comments stem from brewers who have used it later in the brewing process, particularly as a dry hopping addition. Azacca® has a lot to offer all through the brewing process though as evidenced by this post from Founders Brewing announcing their Azacca® IPA.

If you’d like to read another perspective … Here are some useful tasting notes from the user yso191 on the homebrewer association forum. Thanks yso191, whoever you are. 

Conclusion:

In a sea of new hop varieties, Azacca® rises above the rest. It is a versatile variety that find a niche in many different beer styles. It offers everything from mango to pineapple to piney resinous flavors depending on how you use it. Azacca’s® fun exotic flavors really shine though when used late in the brewing process, particularly as a dry hopping addition. If you’re looking to blend it with another hop variety or even some fruit additions, this is the hop that will work with you to accomplish your goals. If you haven’t tried Azacca® yet, you should. It’s so flexible, you’ll be sure to use it in at least one of the beer styles you’re brewing.

And now, in honor of International Woman’s Day, March 8, 2017, we will be offering a Yuuuge discount on a limited supply of Azacca®. Starting at 12:01am on March 8th, for 47 hours, we will be offering 47% off our normal spot purchase price. Use the promo code 47WMDAY at checkout. Sound Good? What are you still doing here … Head on over to our web site store to get some while it’s still available.

 

 

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Hopi Luwak™ – The Ridiculous New Hop Innovation

47Hops is pleased to announce the newest and most proprietary product to hit the hop industry … ever … Hopi Luwak™. This revolutionary new product is an all-natural and fully renewable hop pellet sure to create a movement in the brewing industry. We produce Hopi Luwak™ sustainably because we care about the environment.

Hopi Luwak™ comes from the Latin (Paradoxurus hermaphrodites) a process originating high in the mountains of Indonesia. For years we probed and evaluated this ancient, rare and highly selective processing technique known only to a select few. We applied the Luwak™ process to hops to create a pre-fermented product. Hopi Luwak™ is guaranteed to bring an unprecedented new Earthy flavor to any beer.

To preserve the sensitive resins and oils, we produce Hopi Luwak™ at a mean temperature of an Asian Livet. This is cooler than average T-90 hop pellet production temperatures, and significantly cooler than other known pelleting operations.

Hopi Luwak™ will enable us as a hop merchant to market hops that would otherwise be difficult to sell. Furthermore, we plan to make it available through companies we like and work with. We will control the entire process. We will decide who has access, and we will decide what prices they will pay. Competition in the industry is really tough right now so we had to do something. We decided a new product would make us look very creative and so much smarter than our competitors. Because we are so smart, we expect our new product to wipe out the competition, but don’t expect us to dump it on the market. It has cost us a load to develop this new exciting new product. They will be hella expensive, probably even double your normal hop bill.  Ka-ching! $$$

Processing via the Luwak™ method is filled with twists and turns. We successfully passed them for YOU, our readers. We are confident it will take a while for the claims that Hopi Luwak™ is just snake oil to appear in the market. If Hopi Luwak™ sounds familiar perhaps you are very well traveled or have an eclectic coffee habit. Yes, we’ve borrowed the name from the infamous, and ridiculously expensive Kopi Luwak coffee beans collected from the poop of the Luwak of Indonesia.

YES … this article is a spoof on some of the ridiculous innovation happening in the hop industry today. Please don’t write us ordering any Hopi Luwak™ … although, if enough of you do … who knows … we might have to go to Indonesia!

Hop merchants today overstate the importance of their innovations that basically result in incremental changes in the form in which the product is sold and slight changes to its performance. They hype them up and play everybody else’s products down. It’s all just lipstick on a pig, and we’re good with that. At the end of the day, the flavor of the other guy’s snake oil doesn’t matter if their customer service sucks. At 47Hops, we’re focusing on great quality, no B.S., amazing customer service … not snake oil.

Is a great shakeout coming?

Last week, CNBC published an article about Boston Beer and the coming great shakeout of the craft industry. It may feel like a great shakeout to the corporate craft breweries at the top of the heap, like Boston Beer. They and the largest craft breweries enjoyed hockey stick growth the past 6-7 years. Today, they more closely resemble the corporate brewers against which they rebelled than our stereotypical image of a craft brewer. That growth slowed last year and continues to slow. Large corporate craft breweries are hardly local anymore. Many aspire to sell to stores around the U.S. Some are busy chasing global distribution.

The insatiable desire for growth is creating battles between corporate craft brewers and multinational brewers for control of shelf space and distribution. Neither group wants to stay in their lane. The craft beer industry probably won’t suffer much from that struggle. It will just be a question of who profits from it. Will the corporation worth hundreds of millions of dollars produce your craft beer, or will it be the corporation worth $186 billion? That struggle attracts a lot of attention. The irony of the situation appears to be lost. There’s another shakeout coming, one that will bring with it even more dire consequences.

If hop acreage growth continues on the current trajectory, there is a shakeout coming in the hop industry. How can that possibly be more important than the shakeout in craft beer? I’m glad you asked! Consider this … Last week, I ran into a Yakima hop grower I don’t normally see. He’s a brilliant guy and has done well over the years. We started talking about the trend of small hop farms starting across the country. He was concerned. We both agreed that they serve a purpose in their local markets but that they don’t understand how bad things can get in the market. Then, he emphasized, “Once they saturate their local markets and start selling outside of their area, they’re playing in my sandbox. If they want to do that, they better be ready to sell Cascades for $2.00 per pound.” 

Nobody wants to sell any hops for $2.00 per pound. Nobody makes money at those prices. Hop growers in the Pacific Northwest are prepared to go to the mattresses to protect their family businesses. If you own a small hop farm anywhere around the country, you should keep that in mind. Many PNW hop growers believe they can survive because they can always produce for less. That is their goto strategy. That doesn’t mean they are looking forward to it.

During the years from 2000-2005, PNW hop growers routinely sold hops far below their cost of production to drive out their competition, which at that time was other PNW hop growers. They are ready to use their size and economies of scale against the smaller farmers if necessary. It sounds like a crazy strategy, but it works. It challenges the resolve of the weaker player and to the victor goes the spoils … such as they are. For small hop farms that think this is a bluff … It’s not just hops. Even Amazon.com used the same strategy against diapers.com a few years ago.

To all the brewers excited by the thought of hops for $2.00 per pound … that should be the last thing you hope for. When prices sink below the cost of production everybody cuts corners, quality is a forgotten concept, farms go out of business, and the number of varieties available decreases. In short, you will get what you pay for.

 

 

Why 47 Posts in 47 Days?

During the past 47 days, I wrote these 47 blogs because I believe the hop industry is at an important crossroad. Decisions made now will determine the direction of the hop industry for the balance of this decade and much of the next. The actions of growers and merchants now have never held more consequence and should not be made lightly. They should proceed only after careful analysis of the market and with access to information.

There is obviously a lack of transparency and openness within the hop industry. The hop market is opaque and inefficient. The secrecy and fear of speaking one’s mind is obvious by the lack of comments on these blogs. Thousands have read them each day. I have received hundreds of emails with nice messages of support. There is clearly a shortage of market information. Everybody from the brewer and the grower to the banker is hungry for that information. I may not be able to change the way secrecy permeates the industry so long as the stakes are incredibly high. I don’t expect to. Money doesn’t trust anybody.

My goal with these 47 blogs over the past 47 days has been simply to increase awareness about the times in which we find ourselves by speaking out. We are living through unique and unprecedented times. Today we see sustained increases (albeit at a slowing rate) in the popularity and demand for hops. Customers seem to be sincerely interested in paying a sustainable price, rather than just giving it lip service. The situation requires a fresh perspective and bold new thinking or the industry risks a return to the ways of the past.

No longer is the market an all or nothing game. Growers and merchants don’t need to binge on every opportunity that arises out of fear that the future may bring a vicious down cycle. Binging has been the reason for the down cycles of the past. If another down cycle occurs in the years to come it will be due to a lack of self-restraint. Growers and merchants can afford to say no to bad deals. It is possible to reach a higher plain without jeopardizing everything everybody has worked so hard to achieve.

The hop industry has always reacted to market conditions. Everybody throws their dice simultaneously each spring and nobody knows where they land until harvest. Some of that risk is inherent in agriculture. Part of it though is due to the lack of organization and trust among people who have everything in common. As a result, a feast and famine cycle causes some to find fortune while others dreams are broken. There are great farmers that are out of business today. Success or failure is not a sign of intelligence or goodness. As the dollars grow, the primitive animal spirit keeps growers and merchants fiercely independent. Each player seems convinced they know better than their neighbor. With their determination and stubbornness, the uncertainty grows ever larger.

 

“It is not the strongest or the most intelligent who will survive

but those who can best manage change.     –  Charles Darwin

 

The more things change the more they stay the same. The promise of fortune keeps everybody coming back for more. If growers think they must go full speed ahead in pursuit of the brass ring, the future may resemble the past. That need not be the case.

We’ve reached the end of this challenge, but this is only the beginning. The most interesting times lie ahead. I’d like to thank everybody who read any of the blogs so far. I am honored and humbled that so many of you have tuned in. If a few of you have found them useful, then I consider the effort a success. Going forward (after a short break) I’ll be writing 2-3 blogs every week. The goal for the future will be to continue to increase the dialogue, and to reduce the opacity that embodies the hop market. Subscribe if you want to continue to get an inside view of the hop industry’s most interesting days as they unfold.

Cluster Hops – Spotlight

Cluster is THE O.G. American hop variety. It is a public variety, not proprietary. People didn’t own hop varieties back when this variety came along like they do today. Cluster dates back to the late 19th and early 20th century (and probably even before that) when all beer was craft and local because there wasn’t any alternative. Some speculate the variety traveled over with Dutch or English settlers from Europe yadda yadda yadda … We care more about the future of the Cluster variety than its past. If you want a detailed history of any hop variety, you can probably find it on the Interwebs.


We want to focus on what to expect when you use Cluster hops. Depending on when you use them in the brewing process, it offers flavors ranging from black currant to pineapple melon and citrus. In short, Cluster can provide a combination of earthiness and fruitiness while it brings a clean bitterness to the table.

OK … Let’s address the dark side of Clusters, cattiness. If you’ve never ever heard the term before, it’s not referring to that nice warm kitty purring on your lap as you sit by the fire. It means a cat pee flavor or smell. Yes, you read that right! Some claim that they can smell or taste a litter box / cat pee aroma from Cluster hops. Some people claim the same about other varieties too. Others say they have never experienced cattiness. Cluster is present in plenty of beers that don’t exhibit cattiness. You shouldn’t write off the variety on that rumor alone. Double Mountain Brewery in Hood River, Oregon, successfully brewed their Clusterf#ck single hop IPA with … guess which variety. Here’s a link to  their experience.

If that wasn’t enough, here’s a great blog post from Beervana from a few years ago that mentions some Cluster history. It also offers very colorful and favorable review of the Cluster variety in the Clusterf#ck IPA mentioned above.  

Today, new varieties are all the rage. Legacy varieties aren’t sexy in today’s market. Today everybody wants something new, just for its newness alone. For that reason, Cluster, which once dominated American hop variety, is now counterculture. Allow your creative juices to flow. Challenge yourself as a brewer. Don’t follow the herd. Give Clusters a try. You might be surprised what you’ll find there … Or, you can go ahead and brew another Citra® IPA like everybody else and their dog.

Starting tomorrow, February 16, 2017, for a limited time, we are featuring Cluster in our #throwbackthursday sale on our web site store. Save on this American Legacy Variety while supplies last. 

Contract Repudiation? – Letter to a Brewer

One of our salespeople recently received several emails from an upset brewer in which he seemed to be discussing the repudiation of his contract with us.  It was not entirely clear however. We offered several options for the brewer to change the terms of their contract in an attempt to make them more amenable, but all were shot down. We decided since our salesperson was not able to make any progress, that perhaps our lawyer would. So, we sent the brewer the following letter:

 

February 13, 2017

 

Dear John,

I would like to thank you for your business. I am writing you today regarding your recent communication with one of the members of our sales staff. I have read through your emails and understand that you are not happy with the contract you signed. From my interpretation of your emails, it seems that you do not plan to honor the terms of your agreement in full.

It seems there may be some confusion on your part as to the purpose of our contract. Our contract exists to dictate how our companies will work together. Unless we mutually agree to changes in writing, those are the terms. In your emails, you appear to dictate what you are willing and not willing to do and you unilaterally intend to change the terms of our agreement. That, I am afraid, is not how this works. We are very willing to discuss reasonable adjustments that are mutually agreeable for both parties. However, the changes you have requested are unreasonable, completely one-sided, and therefore unacceptable.

I would like to ask you to clarify for me if it is your intention to repudiate your contract. If you choose to do so, please be aware that we will not relinquish any rights we have under this contract to any remedies to which we are entitled. The remedies, and our willingness to pursue them, are clearly presented in your contract. I am hopeful that our companies can find a compromise on this issue so we may continue to work together in the future.

Kindest Regards,

Steven

In-house counsel, 47Hops

 

Following that letter, not surprisingly, the brewer’s attitude seemed to change a little bit. Honestly, we want nothing more than to find an agreeable solution for both parties. It is not in our interest to bring any brewer to his or her knees. Hopefully the brewers don’t want that for us either. During the challenging times that lie ahead, we must all remember that we need each other. We should strive to work toward goals that are mutually beneficial so we can all survive long into the future.  

Money doesn’t trust anybody

I sold an old truck to the wife of our farm manager. He and I had a great relationship, and I gave him a great deal on my dad’s old truck. The truck was in great shape. His wife gave me an envelope with the money. Right away, without thinking, I put it in my pocket. She insisted that I count it. I told her that I trusted them. To that, she responded,

Money doesn’t trust anybody … count it.

She was right. Whenever there is money involved, personal feelings should go out the window. It’s business! It is your responsibility to make sure the deal is done correctly. 

Why am I mentioning this now? There are a lot of hop contracts today. They exist to guide how companies should work together. There are renegotiations happening too. There are some things that may happen during the course of those renegotiations that neither side will like. It’s not personal. It’s just business. Sometimes that sucks when things don’t go your way. I’ve learned the importance of divorcing yourself from your emotions when it comes to business. I used to get offended or hold a grudge from some transactions. In the long run though, it’s not worth it. The only person whose life you affect by doing that is your own.

Some brewers in the industry today are new to running a business. They get butt hurt when they feel like they don’t get what they want. This message is for you. 

Hop Contracts – Did you read before signing?

At CBC 2016 a brewer visited the 47Hops booth. We talked for a while. By the end of the conversation, he wanted to sign a contract. I gave him the contract and terms and conditions to read. He was about to sign them without reading them. It was the 2nd day of the 3-day show. I told him that I’d make sure the hops didn’t go anywhere and suggested he take the contract and the terms and conditions back to his hotel, read them. I assured him we could talk about it the next day if he had any questions. Then he could sign the contract.

The next day arrived and so did the brewer. He was a little hungover, but had the hop contract and terms and conditions in hand. I asked him if he had the chance to read it. He responded, “Naaa … I didn’t. I don’t like reading those things. We like to do business with people we can trust.” I couldn’t believe what I was hearing. We sat down and went over the contract, terms and conditions together. I highlighted varieties, quantities, prices, payment dates, penalties for not paying, how long hops could be stored for free and storage costs once they did kick in. The rest was legal stuff about venue and jurisdiction. It seemed he was paying attention and then signed the contract.

Most of us click the AGREE box on the ULAs for apps and for our cell phone operating systems. Today, people are accustomed to not reading contracts. There’s a great South Park on that called HUMANCENTiPAD. I have to admit, regarding the iOS on my iPhone I don’t read the ULA before agreeing to it. I figure if I want to use that phone that’s the price I have to pay. If it says in there they can track my location, then that’s the price of that technology.

It seems some brewers take the same approach with hop contracts. So many brewers are surprised later … when they have too many hops and discover they cannot just walk away from them. Finally, they read the details of the contracts they signed. That feeling of surprise can turn anger and some get very emotional. That doesn’t help.

Please read your hop contracts. You should read every contract you sign, unless you’re just willing to accept whatever costs there may be to working with a company. Education is never free. I suppose this is one of those expensive business lessons new brewers need to discover not only how to brew better beer, but run a better brewery in the process.

We’re in this for the money

It sounds so noble to say you’re not doing something for the money. Some brewers are passionate about brewing beer. They say they just want to make good beer. Some hop growers love farming. They say all they want to do is farm. At the end of the day, everybody cares about the money. If they didn’t, it would be called charity. How much of your time have you ever volunteered in your life?

At 47Hops we are doing this for the money. Unless you’re independently wealthy, you are too. The growers from whom we buy the hops expect to receive money so they can continue to produce hops from one year to the next. Try not paying somebody and see how quickly they react. The people who work any merchant company or brewery expect to get paid on a regular basis. Even if somebody doesn’t have a family, chances are they enjoy eating on a pretty regular basis. When it comes down to it, money is the reason we do all this work so let’s not be ashamed to say that.

The money in the hop industry comes only from one source, from the breweries. It’s not great that there’s only one source, but that’s the hand we have been dealt. For that reason, it’s important for brewers to pay their bills on time and respect the system. If they can’t they should make arrangements to schedule those payments so everybody knows what to expect. It throws a wrench in the system when they don’t or when they try to walk away from contracts.

Hopefully, along the way, we all derive some pleasure from what we do too. Let’s be honest though … enjoying what you do for work is really secondary to eating. If you can’t afford to eat, you’re not doing the right thing with your time.

 

American Hop Farmer Strategy “If there’s a bad crop …”

The strategy most often discussed at American hop conventions about a dozen years ago was how “Maybe next year things will be better” or how “if there’s a bad crop in Germany everything will be fine” (no offense ever intended to the German growers of course). Weak prices and a dire outlook for the future introduced plenty of humility to the hop industry. It used to be that without a fire in a kiln or a warehouse, there wasn’t enough money on the farm to pay for new equipment. I remember jokes like, “I tell my guys if the kiln catches fire to drive all the hop trucks right up next to it.” Back then, normal prices often didn’t even cover the cash cost of production. There were few people under the age of 40 in the industry. The industry was growing old and dying. 

In today’s world, everything has changed. Strong pricing the past few years has helped finance a renovation of much of the industry’s equipment. All that new investment brought along with it huge increases in capacity. It brought home a younger generation. In some cases, the pride and arrogance is off the charts. Some of them seem to think they invented hops or something. Much of the humility is gone except for those who lived through the bad times. You can tell they’re happy at the turn of fortune. It’s clear that memories of how bad things can be are just under the surface. I imagine they view the opportunities in the industry with some skepticism … and rightly so.

What hasn’t changed with all the ups and downs over the years is the American hop industry’s penchant for gluttony and the seeming inability to find a happy place. Maybe that’s just an American thing? Other countries’ hop industries seem to be relatively content when they’re making good money. When Doug Donelan of the New Zealand Hops Limited stated their strategy at an IHGC that New Zealand, that growers were content with their current levels of production, it shocked the rest of the participants. It was as if with such blasphemous statements he had just cursed the baby Jesus and the Virgin Mary in one go. Others scoffed at what they perceived to be a naïve position. They claimed those Kiwis were missing out on an opportunity of a lifetime.

I have to admit my Americanness made me wonder why they wouldn’t go for the brass ring. They seemed to have gotten it all right though. When is enough enough? Contentment?? American hop growers cannot seem to find the level at which they are content until they are looking at it in the rear view mirror. So long as there is an opportunity for growth, American hop growers will chase it. The money in today’s industry has emboldened them on that quest.

The more things change the more they stay the same. Since the last harvest I started to hear, “If there’s a bad crop everything will be just fine” again. That sounds oddly familiar. Everything is just wonderful in the industry today … isn’t it? A strategy based on somebody else’s misfortune does not sound like a good one. I believe there are cracks that lie just beneath the surface. If we scrape too much away, I imagine we will discover that what seemed like cracks in the ice are enormous crevasses.

Despite the recent upward trend, the hop market remains a fragile thing. If the industry had a strategy to responsibly manage production, as the New Zealand growers have done so well, perhaps there would be less cause for concern. Even those organizations in the U.S. that do resemble New Zealand Hops Limited aren’t showing any restraint. Unfortunately, there seems to be no plan, no strategy, no leader, no controls, no warnings and no consideration for the consequences of over supplying the market. So, we all continue forward on this roller coaster ride at full speed not knowing where the tracks may lead.