Wednesday, January 12, 2011

Competition Good for Hops, Farmers and Brewers

Attention Craft Brewers:

I hope this note finds you in a robust spirit as we settle in to the new year. Fortunately, we have much to be upbeat about – craft brewing is one of the few bright spots in an otherwise dismal economy. Every day it seems we’re hoisting hoppier beers and welcoming more happy converts.

As you plan your future hop needs, please consider Indie Hops.

Our prices may not be the lowest you can find but they will be competitive enough to not have a significant effect on the hop portion of your COGS. If it's more, it will be a tiny fraction of the $10 more per lb. you were paying just recently and it's a fair price to pay to insure that everyone in the supply chain is healthy so that the hop supply stabilizes.

After several years of selling hops at a 400% markup, the de facto hop cartel in Yakima can afford to offer new contracts virtually at cost in order to keep you dependent on them when the next price cycle comes along. Yes, there was a tight market in 2008 and it is reasonable that brewers without contracts would have to pay more that year. However, the very next year 7,000 additional acres of hops were put in and there was no longer a shortage to justify the long contracts at record high prices. Having few alternatives, you had little choice but to agree to lopsided terms.

Do you want to reward the Yakima merchants for this behavior by giving them all of your business now that spot prices are low? Unless Indie Hops and others are around to offer competition the next time the supply tightens, you will once again have no choice.

So having said all that, I politely encourage you to continue to diversify. Buy from your current suppliers. Buy directly from farmers. Buy locally. Buy from overseas. And buy from the new guys with the lightly processed fresh pellets who believe in promoting publicly owned cultivars – Indie Hops. Spread the love, lower the risks of controversial shortages, promote hop and hop farmer diversification, and make a new friend with a fresh spirit.

Keeping competition alive will be as good for the hop industry as it has been for the brewing industry. We appreciate your support.

Cheers!

Roger

Available hops: http://www.indiehops.com/pdf/IH_Order_Form.pdf

2011 crop: http://www.indiehops.com/pdf/IH_contract_pricing.pdf

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