1) You’re a little late to the party. Had you planned your new hop farm a few years ago, you might have had it paid for by now and you’d be enjoying this article from a different perspective. Today, there’s no need for new hop farms, or even new acreage. Anybody planting hops commercially today is missing the bigger picture and contributing to oversupply. For all you passionate small growers just getting started … No, I don’t just want to keep acreage out to keep prices high just so I can get rich. Hop merchants can make money if prices are high or low. It’s growers who will take it in the shorts if the price drops below the cost of production.
2) Quality and service matter, but they’re not the only things that matter! There are very few brewers who are loyal to a certain supplier regardless of whether or not the price is competitive. Cue defensive brewers who want to argue to the contrary! I’m not saying they don’t exist, but, in general, brewers buy hops the same way they buy milk. Think about it … you don’t look for a certain variety of milk, do you? Unfortunately, price plays way too important a role in the hop industry. That’s the fault of the industry itself (a topic for another post). Grow what you have sold instead of selling what you have grown.
3) The industry feels big today with all the attention, but everybody in it is still in a very small boat. You may lose. It may not be something you do that brings you down, but something somebody else does. That’s why you need to know what’s going on in the industry and understand what that means for you. Everybody rises and falls together with the tide. Come to think of it, that doesn’t just apply for the small hop grower.
4) Nobody owes you anything! Sometimes the idea of sustainability alone isn’t sustainable. If you’re a small local producer, that doesn’t mean your local brewers have to prefer your hops. I know of a larger brewer who was excited to support their local hop growers. They bought local hops at $17 per pound really just because they were local. They thought they were doing the right thing. Sounds like a great sustainable thing to do … right? Unfortunately, quality and consistency were all over the place. By supporting their local hop industry they were supporting the wrong behavior. Fast forward to today … the brewery is back to buying hops from the Pacific Northwest. Being local in and of itself won’t be enough.
5) You have to know your market and know your place in it. If you produce hops in Michigan, Montana or Florida, your hops aren’t local in Illinois. Once you go out of state, you lose that competitive advantage. You may have high quality hops, but your local advantage is gone. Once you go out of state … guess what … all of a sudden you’re competing with Pacific Northwest growers. If you’re going there, you better be ready for a fight. Those guys are the big league. They could care less if you go out of business. In fact, they might even enjoy it a little bit. That would justify their business model and there are some sadistic mofos in the industry.
6) There’s no room for idealism in the hop industry. It’s a cutthroat business. That means you might have to do things you didn’t consider doing when you started to make money. Maybe you only want to sell organic hops. You can try to specialize, but at the end of the day you have to do everything possible to survive. You can’t live on enthusiasm and you can’t eat hops.