Latest / No Dirt No Flowers Podcast / Brewers Perspective With Pinthouse Brewing / Ft. Joe Mohrfeld

Transcript

Brewers Perspective With Pinthouse Brewing / Ft. Joe Mohrfeld · No Dirt No Flowers Podcast

• 0:00
  Hello everyone and welcome back to No Dirt No
• 0:02
  Flowers. We are working our hardest to crank
• 0:05
  out as much material for you as possible this
• 0:07
  harvest. Today we are very happy to welcome our
• 0:10
  very first brewer guest, Joe Morfeld of Pine
• 0:14
  House Brewing. This was a very fun podcast to
• 0:16
  record. I hope you enjoyed as much as we did.
• 0:19
  Without further ado, No Dirt No Flowers, episode
• 0:23
  10. There he is. There he is. Joe's our first
• 0:39
  Texan. Well, first Texan, but first brewer on
• 0:44
  the podcast. So Joe Moorfield joining us today
• 0:47
  is our first brewer that we've had on No Dirt,
• 0:51
  No Flowers. Longtime customer of ours. Very much
• 0:55
  appreciated and are excited to chat about things
• 0:59
  today. Yeah, tell us a little bit about yourself.
• 1:02
  I mean, I'm sure a lot of the listeners know
• 1:04
  who you are, but I don't know how long you've
• 1:07
  been in the business, how you got started, what
• 1:09
  are your likes and dislikes? Yeah, so I've been
• 1:11
  in the industry for maybe 17 years this fall,
• 1:15
  which is starting to feel like a long time. That's
• 1:18
  a run. Yeah, I mean, you guys probably go through
• 1:22
  it as you hit that point in your life where you
• 1:25
  feel like you're the young person for so long,
• 1:27
  and then all of a sudden you're the old person.
• 1:30
  I've never felt that. Good for you. I guess the
• 1:33
  hop industry is different. You don't get as many
• 1:35
  new folks coming in and starting hop farms as
• 1:37
  we get people starting breweries. Yeah, 17 years.
• 1:41
  Got my start with Odell Brewing Company and had
• 1:44
  Brendan McGivney as my mentor. And he's the one
• 1:48
  that really got me passionate about hops. He
• 1:50
  brought me up here in 2011 for the first time.
• 1:55
  That really kind of changed my course in brewing,
• 1:57
  you know, getting to go onto the farms, meet
• 2:00
  some growers for the first time and see the,
• 2:04
  you know, what the valley was, see the whole
• 2:05
  operation and really the connection between the
• 2:09
  raw material and how that, you know, influences
• 2:12
  the beer. You know, we started Pine House in
• 2:14
  2012. I think I got back up here in 2013. And
• 2:19
  aside from 2020, I've been up, you know, multiple
• 2:21
  times every year since. I know quite a few people
• 2:25
  through the Valley. We're also an active member
• 2:27
  in Hop Quality Group. I serve as the Washington
• 2:31
  grower ambassador. We come up here and do farm
• 2:33
  visits and talk to growers. We look at food safety.
• 2:36
  We look at really the things that the growers
• 2:40
  can do that will affect us as brewers. You know,
• 2:43
  we're not going on farms trying to audit and
• 2:45
  say, like, you guys need to do this better. Your
• 2:48
  operations are not, you know, what we're hoping.
• 2:50
  You know, we're really looking at it from a brewer
• 2:51
  perspective. Because we're using a lot of hops
• 2:54
  in the dry hop, which wasn't always the case.
• 2:57
  There was a kill step in the brewery. So we're
• 2:59
  looking to make sure to keep foreign material
• 3:02
  inclusion out, to keep birds out of bales. We
• 3:06
  don't want a trap getting into a bale or any
• 3:09
  of that stuff. So that's kind of what we're coming
• 3:11
  out. And really, from my perspective, it's really
• 3:13
  continuing to build the relationship with the
• 3:15
  growers. That's really one of my big passions,
• 3:18
  both in the brewing industry and just across
• 3:20
  the industry. I've seen the industry come a long
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  way back when you'd walk through a picker and
• 3:26
  it was definitely keep your hands inside the
• 3:29
  car at all times. And now there's a lot of really
• 3:34
  beautiful facilities out there and the quality
• 3:36
  of hops are better than they ever have been.
• 3:39
  And I think from my perspective, it's just how
• 3:41
  do we keep pushing that way so that we as brewers
• 3:44
  can keep making these great beers. You're an
• 3:48
  ambassador. I'm an ambassador between the brewers
• 3:50
  and growers. Love it. Jeremy Mornier did it for
• 3:53
  about a decade. So big shoes to fill there, but
• 3:56
  I've been doing that the last couple of years.
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  And how long have you been a member of the Hop
• 4:01
  Quality Group? I think we joined in 18. Those
• 4:04
  are big drive for joining. For me, it was really
• 4:07
  that continued connection to the growers, to
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  staying as connected as possible. You know, being
• 4:12
  in Austin, Texas, we're pretty far away from
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  the Valley. It really helps, you know, just any
• 4:19
  of that connection we can to see what's going
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  on up here. I was also I was at Odell when Hopcaldi
• 4:25
  Group formed and Brendan was one of the founding
• 4:27
  members. So I was really intrigued. And then
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  for a long time, they it was really only larger
• 4:32
  brewers were the members. And we've changed the
• 4:35
  whole membership process quite a bit. The motivation
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  was that connection with the growers. Yeah, it's
• 4:40
  really interesting because you mentioned auditing
• 4:44
  and things like that. And I'll admit, when the
• 4:46
  Hop Quality Group first formed, I don't know
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  if it was just that it was something new and,
• 4:52
  you know, brewers are coming out and there was
• 4:55
  an auditing component. But if it was just because
• 4:58
  it was new or if it was because of the auditing
• 5:02
  component or some combination of that. But I
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  think even as open as we were to it, there was
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  kind of like a little bit of a pushback. Like,
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  you know, like, oh, well, maybe we should have
• 5:12
  a brewer quality. you know, group. Yeah. Big
• 5:17
  push for that for a while. Yeah. But I do like
• 5:19
  to hear that there's this desire and focus on,
• 5:23
  on the connection piece there, like, you know,
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  connecting the brewers with the growers and,
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  and, and that can happen a lot of different ways
• 5:29
  in the industry, but, you know, kind of circling
• 5:31
  back to some of the stuff we talked about, you
• 5:33
  know, with independent and merchant and that
• 5:36
  entire landscape, I think it's good to have an
• 5:39
  unfiltered connection there that brewers can.
• 5:43
  can engage in. Yeah. I mean, obviously I agree
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  with that too. And I mean, I think it's a huge
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  benefit for brewers who are members of the group
• 5:52
  because we have the farm reports. And so if you
• 5:54
  can't travel out, you know, you can look at the
• 5:56
  reports and depending on how new the reports
• 5:59
  are, more photos or less photos of the farms
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  we have, you know, what they've done for upgrades.
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  But I think it just really gives more transparency
• 6:06
  for the brewer into the, what that grower is
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  doing and, you know, and how. engaged they are
• 6:12
  in trying to focus on food safety, hop quality.
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  And there's been a lot of improvements for what
• 6:20
  we need in the product because of the group.
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  You know, kiln temperatures have gone down, focuses
• 6:24
  on oil and aromas over Pure Alpha. Pick windows
• 6:29
  have shifted and tightened up. So there's been
• 6:32
  a lot of, I think, improvements that have come
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  that have really helped us as brewers. And at
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  this point, a lot of what we do, I think, is...
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  Really hoping to maintain those relationships,
• 6:41
  you know, to stay unbiased. I always, you know,
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  have to make sure that, you know, it's like I
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  have my Hop Quality group hat on. I'm not here
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  as a pint house representative. You know, I'm
• 6:50
  here to really just look at the farm and kind
• 6:53
  of see like what we can do as brewers. You know,
• 6:56
  how can we help push this industry forward over
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  the next, you know, if we've been, I think Hop
• 7:00
  Quality has been 13 or 14 years now, somewhere
• 7:04
  in there. And, you know, how can we do it for
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  the next 15 years? Yeah, make sure that we can
• 7:09
  forge that connection because we want to make
• 7:13
  sure that there's transparency through some of
• 7:15
  the merchants and sales desks so brewers have
• 7:18
  visibility into some of these other farms. Because
• 7:20
  it's really hard to go visit, say, like an independent
• 7:22
  farm down in Prosser than a grower that's in
• 7:27
  Moxie that's part of a big sales desk or a merchant
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  -owned grower that they're going to take you
• 7:33
  to on a selection visit. So showing transparency
• 7:36
  into some of these other farms. I think it's
• 7:39
  really important. Yeah. I commend you guys. And
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  that's, that's a very cool component of it. Do
• 7:45
  you see the charter or I guess a couple of questions
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  has the charter of the hop quality group changed
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  in the last few years? I know there's breeding
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  activities going on in some way, shape or form
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  and kind of follow up to that as you talk about
• 8:00
  quality. And I mean, I think what. You guys are
• 8:04
  doing it serves a really valuable purpose and
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  with great power comes great responsibility as
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  well. Are you guys looking at, you know, steps
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  beyond just how do you influence and navigate
• 8:17
  the current challenges that exist in the hop
• 8:19
  industry? As a example to that, there are kind
• 8:23
  of the stronger growers that kind of have their
• 8:29
  supply chains locked up a little bit more and
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  then growers that don't. And of course, those
• 8:34
  that do have it locked up can't produce enough
• 8:36
  hops for everybody's needs. And so we need the
• 8:39
  independent growers to be there and be able to
• 8:42
  keep up in some way, shape or form or still meet
• 8:45
  those demands that brewers have. But that creates
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  a lot of questions as to how do we make that
• 8:52
  happen? There's a lot to unpack there. I mean,
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  I'll say, has the charter changed? It's evolved.
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  You know, I think originally it was really focused
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  around. food safety, and the whole idea of oils
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  over alpha, focusing on kilns were a big part
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  of it, right? It was kiln temperature, getting
• 9:12
  people over to propane or natural gas from other
• 9:16
  methods. There was a lot of stuff in the picker
• 9:19
  with foreign material inclusion. So that was
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  probably the initial thing. The breeding program
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  was always kind of there. It kind of got some
• 9:25
  more legs in the last probably five years. I
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  think there was a couple of things that kind
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  of... correlated there is we saw the need for
• 9:34
  the breeding program to have more emphasis because
• 9:36
  the usda program was struggling a bit and it
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  didn't feel like it was making a push at the
• 9:42
  time to suit the craft members the independent
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  craft members you have hrc which is a great organization
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  but i think it's serving a slightly different
• 9:50
  definition of brewers and so hop quality group
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  the idea was we really want to focus on aroma
• 9:57
  hops we want to focus on getting stuff out there
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  for like the ipa producers you know at the end
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  of the day that's kind of what it is john henning
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  as he got later in his career i think just had
• 10:07
  a little more time to focus on the breeding program
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  we were able to put a lot of funding towards
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  that through hop quality group and then we got
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  really lucky there was a hop that you know john
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  cross that had a huge style level that ultimately
• 10:23
  you know he kind of pushed us to say like i think
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  you guys should push this forward i would you
• 10:28
  know just get behind this hop. This is really
• 10:30
  unique. And if you guys think it's good aromatically
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  and brews well, like let's see if we can kind
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  of push this a little bit faster through. And
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  so then that became that process. And so the
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  breeding program, I think took a front seat for
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  a while. I think it's going to inevitably take
• 10:44
  a bit of a backseat after hop quality group four
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  gets fully released, which is kind of bound up
• 10:50
  in paperwork with USDA, but it'll probably be
• 10:51
  fully released by spring with name. And then
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  the material transfer will open up for all growers
• 10:58
  that want it can get it. And that was really
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  our goal, you know, to kind of segue into your
• 11:03
  second question on that. You know, the idea of
• 11:05
  the breeding program, too, is the initial farms
• 11:07
  that it was going to. Well, we actually set up
• 11:10
  six farms. It was two in each growing region.
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  All, you know, what we considered independent
• 11:15
  at the time when they were all structured and
• 11:19
  that had a way to do some direct to consumer
• 11:22
  either feedback or. processing to be able to
• 11:26
  get hops into people's hands. Yeah, the goal
• 11:28
  of that is we don't own the hop. Hop Quality
• 11:30
  Group does not own the hop. It's a true public
• 11:32
  variety coming out of USDA. But we wanted it
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  as brewers. We felt like if you get this group
• 11:37
  of great brewers that are really behind something,
• 11:40
  it's going to push a hop in the public sphere
• 11:42
  and hopefully find some success among brewers.
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  Because I think that's one of the biggest challenges
• 11:46
  with public varieties is there's no marketing
• 11:48
  budget behind a public variety. But if you can
• 11:52
  get some of the best brewers in the world going,
• 11:54
  that's my favorite hop, other brewers are going
• 11:57
  to take notice and they're going to start asking
• 11:59
  for it. And that's what we're hoping with HQG4,
• 12:02
  that push behind it. But yeah, it's ultimately
• 12:06
  public. Any grower that wants to put it in and
• 12:09
  grow it and have it told and sold, they can.
• 12:14
  Why do you say that you think it's going to take
• 12:16
  a bit of a backseat? Well, I think there's a
• 12:19
  lot going on in the current administration. There's
• 12:22
  a lot of funding shifts that are happening. Take
• 12:26
  that for what you want. No, I think not only
• 12:32
  is that going on, but John's retiring at the
• 12:35
  end of the year. Kayla is going to be overseeing
• 12:38
  both programs to our understanding in Hop Quality
• 12:41
  Group. I think that's all still getting figured
• 12:42
  out. It's going to take a little bit of time.
• 12:45
  She's going to be pulled in a lot of directions.
• 12:47
  She's an amazing breeder, and I think she's going
• 12:49
  to be developing some cool stuff. But I think
• 12:51
  it's just with how we can provide resources to
• 12:55
  it and what the resources are, right now the
• 12:58
  focus is getting Hop Quality Group 4 out there,
• 13:00
  getting aligned with Kayla and making sure that
• 13:03
  we have a clear vision on where we want the breeding
• 13:07
  program to continue. We're not going to abandon
• 13:09
  it. For the first time, too, like the facility
• 13:11
  at Prosser, they have a great wolf picker there.
• 13:15
  They have a brand new custom kiln. So they have
• 13:18
  some really cool resources that we've never,
• 13:20
  I guess the USDA has never had. And so I think
• 13:23
  the breeding program is in a better position
• 13:25
  than ever to be pushed forward. So I think it's
• 13:27
  just getting alignment, you know, with some of
• 13:29
  the restructuring and with John retiring and
• 13:32
  Kayla, you know, getting her feet underneath
• 13:33
  her with her new role and all that. Yeah, I think
• 13:37
  Kayla's going to be really good. I mean, there
• 13:38
  was an infrastructure issue at Prosser, but there
• 13:42
  was also this, didn't really seem like there
• 13:45
  was a huge desire to really put the same attention
• 13:48
  into Prosser and vetting varieties there and
• 13:53
  moving them forward as there was down in Oregon.
• 13:56
  Well, and that's what Hop Quality Group saw and
• 13:58
  was kind of one of the big pushes, you know,
• 14:00
  is we need someone. And a lot of that, I think,
• 14:02
  happened when, you know, this is a little bit
• 14:04
  before my time in Hop Quality Group or even probably
• 14:07
  in the industry. But, you know, AB pulled a lot
• 14:09
  of funding after their acquisition by InBev.
• 14:12
  When a lot of funding got pulled out of the public
• 14:14
  breeding program, I think Prosser got hit the
• 14:16
  hardest in that. And so, you know, it took a
• 14:21
  collective of craft to come together and pool
• 14:23
  some resources to. at least start to make some,
• 14:26
  some progress. And now AB has been giving money
• 14:29
  back to them again. And I think they're in a
• 14:31
  really good spot. And in hop quality group, we're
• 14:34
  all really optimistic about the next phase forward
• 14:36
  and breeding. And, but it is, I will say as a
• 14:39
  group, I think we're really looking holistically.
• 14:41
  Cause I don't think we, I don't know if we ever
• 14:42
  thought for sure that we would have a hop come
• 14:44
  out, you know, this push. And so now that it
• 14:47
  is, and we're kind of getting this final push,
• 14:50
  get through the finish line. It is kind of like,
• 14:52
  well, what. what does the charter look like for
• 14:54
  the next 15 years of it? You know, how do we
• 14:56
  get members engaged? How do we get new members
• 14:58
  in here? You know, the grower relations part's
• 15:01
  a big part. There's been so much infrastructure
• 15:02
  put into farms. It's not like we're going out
• 15:04
  there anymore and, you know, telling people they
• 15:07
  need to do this to a kiln or a picker. And there's
• 15:10
  not a lot of money out there, so we also can't
• 15:12
  go out and say that too, you know. We can make
• 15:14
  suggestions and hopefully, you know, keep that
• 15:16
  dialogue open. But, yeah, it is kind of understanding.
• 15:20
  I think what is going to be the biggest impact
• 15:22
  for the group over the next 10 or 15 years. And
• 15:25
  that's a big internal discussion right now. One
• 15:28
  question that I have that has never made sense,
• 15:31
  and we've had discussions about this. It seems
• 15:34
  to me like the best way to make what you guys
• 15:38
  are trying to do more successful is to bring
• 15:42
  in a level of brand management into those varieties
• 15:44
  when they're released. And why not have... you
• 15:48
  know guidelines of hey here's what needs to happen
• 15:50
  with these hops when they get into market here's
• 15:53
  quality parameters here's marketing parameters
• 15:56
  and then put it out to bid to a private obviously
• 15:58
  somebody in the hop industry why not have somebody
• 16:02
  manage it and put the marketing muscle behind
• 16:05
  it charge a small royalty that is totally vetted
• 16:09
  through hop quality group that goes back to continue
• 16:11
  funding breeding and funding the the management
• 16:16
  and this way you can make sure that these varieties
• 16:19
  get out into the public but still serve kind
• 16:23
  of serve the purpose of creating value throughout
• 16:26
  the supply chain and still getting out there
• 16:31
  with the support that it needs it's a problem
• 16:35
  the public programs have always had is here's
• 16:38
  something cool now what happens i don't know
• 16:40
  i don't i yeah i don't disagree i think it's
• 16:43
  something that we have discussed internally a
• 16:45
  lot because there is this kind of gray area of
• 16:49
  like, we do want this to be a public variety,
• 16:51
  but what does that truly mean? I mean, this is
• 16:56
  the, you know, you ask a bunch of farmers how
• 16:57
  to do one thing, they're all going to give you
• 16:59
  a different answer. This is true. And so I can
• 17:03
  tell you with the three main growers that we've
• 17:05
  just been working with, I don't know if they
• 17:08
  would all agree on what the right path forward.
• 17:10
  And so then you add. Three more, and you're going
• 17:13
  to have three more answers, and then it's going
• 17:16
  to keep going that way. You guys are the ones
• 17:18
  that are funding it, so you should probably have
• 17:20
  a say in, okay, thank you for your opinions.
• 17:22
  Well, we're helping fund it. It's not just us.
• 17:25
  Right, right, right. It is USDA, so we think
• 17:28
  we need to be careful around that. I mean, one
• 17:30
  thing we have talked about, and I think this
• 17:32
  will be a component of this hop in particular,
• 17:35
  is having like a growing guide, a rough growing
• 17:37
  guide of. with some of the knowledge that we've
• 17:40
  learned from the three regions and having like
• 17:43
  the three growers that have grown it provide
• 17:46
  some of that insight so that there can be some
• 17:48
  management of this variety without any guidance
• 17:50
  going to the other growers. I do think there's
• 17:53
  going to be, well, I know there's going to be
• 17:54
  some marketing component, but you know, our hope,
• 17:58
  and I think that this is gonna work out really
• 18:02
  well. So I think having something organically
• 18:04
  come through with just a bunch of great brewers
• 18:07
  going, this is really good, I think is actually
• 18:10
  going to like kind of be a bit of a Trojan horse
• 18:12
  into this market. Yeah. But that's just my opinion.
• 18:17
  Sure. But I kind of hear that from some brewers.
• 18:19
  I mean, I think it's fun to have all these, you
• 18:22
  know, it's something new all the time and there's
• 18:25
  some great varieties coming out. But at what
• 18:28
  point, what do we do with them? You know, like
• 18:29
  I just don't. It's a really weird thing. Like
• 18:33
  we hear over and over and over again. The brewers
• 18:37
  want new varieties to play with. They're looking,
• 18:42
  but there's also varietal fatigue or option fatigue.
• 18:46
  Okay, so what is the main goal of that? Because
• 18:49
  sometimes we have these surface -level conversations
• 18:52
  about, well, we're looking for new varietals,
• 18:56
  but are you looking for another workhorse varietal
• 18:59
  to offset? You know, some of your other usage
• 19:02
  so that you can broaden your choices in the supply
• 19:05
  chain or you after more flavor options, like
• 19:09
  what is the purpose? And so it's probably a little
• 19:12
  bit of all of that. But from your perspective,
• 19:15
  like if you're out there looking for new varietals,
• 19:17
  whether it be pop quality group four or I don't
• 19:21
  know, something out of another breeding program,
• 19:23
  like what is your main driver right now? I mean,
• 19:24
  you talked a little bit about uniqueness in.
• 19:28
  you know, your selection and your beer and the
• 19:31
  premium that you're charging. But then, like,
• 19:33
  as far as the supply chain goes, what would you
• 19:35
  be looking for? I mean, I think that's a really
• 19:39
  good question, and I think it's a question that
• 19:41
  I don't think we got past the surface level for
• 19:46
  about a decade between breeders and brewers.
• 19:49
  You know, I think brewers are like... yeah of
• 19:51
  course we want to try something new like this
• 19:53
  is fun and but there's there was never this like
• 19:55
  call to action ask from the brewer to be like
• 19:58
  but would you actually support this if it went
• 20:01
  into acreage like how much would you really buy
• 20:03
  it was always kind of like yeah we'll take a
• 20:06
  box of it and we'll give you feedback I can't
• 20:09
  speak for you know every brewer out there I'm
• 20:11
  sure everybody kind of has a different motivation
• 20:13
  I think from our perspective a couple of the
• 20:17
  big things that my like desires in breeding is
• 20:21
  one to move some of the continental varieties,
• 20:25
  the old world varieties over to the States. Your
• 20:29
  new land. As you're wearing the new world noble.
• 20:34
  Oh yeah. But that's a big one for me from really
• 20:38
  from an environmental standpoint too, from a
• 20:40
  carbon footprint perspective. Like I feel bad
• 20:43
  that we have this feeling as small brewers that
• 20:49
  we need to be shipping heavy, dense, raw materials
• 20:55
  that can be grown stateside across the world,
• 20:58
  around the world, you know, from New Zealand,
• 21:00
  Australia, Germany, you know, all these places
• 21:02
  when we have very capable, you know, breeders
• 21:06
  and growers here. So I think that's a big motivation
• 21:09
  is long -term environmental impact, carbon footprint,
• 21:12
  being focused more on sustainability. I think
• 21:14
  that also goes to... some of the sustainability
• 21:17
  around varieties so like if we could have a variety
• 21:20
  that grows better that could go in place of another
• 21:26
  variety we're using as a workhorse but it has
• 21:29
  less inputs for the grower potentially could
• 21:31
  you know be cheaper to us or just cheaper i mean
• 21:35
  i take costs out of it really i think it's like
• 21:37
  can we just grow a better variety i think that
• 21:42
  i mean again it goes back to like a carbon footprint
• 21:43
  perspective I know you guys, this year, water
• 21:47
  was a big topic of discussion. If you can have
• 21:49
  a crop that's more resilient and lower water
• 21:53
  needs, that's cool. That's something that I think
• 21:58
  is interesting to breed for. And then I think,
• 22:01
  yeah, having more options out there for flavor
• 22:04
  and aroma is really important because we need
• 22:07
  to be chasing the palate that the consumer is
• 22:09
  constantly evolving to. But the issue with that,
• 22:13
  I think, is like... It's hard to understand too
• 22:18
  far ahead of what that profile is. And so like
• 22:21
  Centennial was a big flavor profile for a long
• 22:24
  time. It still is. And then Citra has really
• 22:27
  kind of taken off as that next one. I don't think
• 22:30
  anything's going to like overtake that soon.
• 22:33
  But what are the accents we can put around it
• 22:35
  so that we can continue to make unique beers?
• 22:39
  But those volumes are going to be a lot smaller
• 22:41
  than. You know, like a Citra or Mosaic or, you
• 22:45
  know, the top tens out there. It seems like there's
• 22:47
  two schools of thought on flavor profiles. I
• 22:50
  know like Nestle and Coca -Cola and, you know,
• 22:53
  all these big, big companies are looking at what
• 22:56
  10 -year -olds and 12 -year -olds are eating
• 23:00
  and drinking today. And they're using that as
• 23:03
  a predictor for what they're going to be drinking
• 23:06
  for their alcoholic choices. Maybe not Nestle,
• 23:09
  but... Probably Nestle. But for like food products
• 23:12
  or whatever, but everything is trying to be predictive
• 23:15
  on what the younger generation is doing. And
• 23:18
  that's one school of thought. And the other school
• 23:19
  of thought is on specifically on beer is that
• 23:22
  the consumer doesn't know what they like yet
• 23:25
  because there's always new flavors that have
• 23:29
  been coming out. I mean, there's a stout phase.
• 23:32
  There was a sour phase. There was, you know,
• 23:35
  big, fruity, juicy, and now. Feels like a lot
• 23:39
  of that's going back to, well, maybe actually
• 23:42
  I like the West Coast heavy cascade beer more
• 23:46
  than these other ones. So is it the brewer that's
• 23:50
  showing options and the consumers deciding what
• 23:53
  they like? Or are brewers chasing what kind of
• 23:57
  what the big flavor houses are chasing also?
• 24:00
  Does that make sense? Yeah, I see what you're
• 24:03
  saying. I think there's a lot. Going on there,
• 24:06
  though, too, because you take a brewery like
• 24:08
  us where we're a direct -to -consumer selling
• 24:13
  beer through our locations component. If you
• 24:17
  think about that in the world of beer, that's
• 24:19
  hospitality. I think what we're trying to do
• 24:21
  is create a drinking occasion space, as the industry
• 24:25
  likes to say. But it's really more around hospitality,
• 24:28
  and I think we can take people on a journey in
• 24:30
  that space more. So we can give them... maybe
• 24:33
  what they're wanting or what they're used to.
• 24:35
  But we can also, that's where we get the chance
• 24:37
  to really take people on a journey and see what
• 24:40
  sticks. And that might influence some of what
• 24:43
  goes out to market or some of the changes that
• 24:45
  we make to our beer. So like what we've learned
• 24:47
  over the years is for a while, bitterness went
• 24:50
  down and now the desire for bitterness is kind
• 24:53
  of coming back a little bit. Oh, it is? You think?
• 24:55
  I think so. I mean, I think we're, we're tending
• 24:58
  to be a little more bitter than we were five
• 24:59
  years ago in a lot of our beers. It went from
• 25:02
  beers were fuller, a little sweeter, to now they're
• 25:06
  drying out a little bit more. So we're kind of
• 25:09
  seeing that and, you know, adjusting to how we're
• 25:13
  brewing some of our flagship beers and sending
• 25:14
  those to market. I mean, but then, you know,
• 25:17
  you're talking about like the Flavor House stuff.
• 25:19
  I mean, that's kind of such a different world
• 25:22
  than what we're living in. I mean, that would
• 25:24
  be probably a much better question for like a,
• 25:26
  you know, a bigger craft like a New Belgium or
• 25:29
  a Sierra. Sure. You're thinking about a national
• 25:32
  palate, which is really tough to try to figure
• 25:34
  out, right? Because I always think about our
• 25:36
  beer. We say this a lot. Our flagship is Electric
• 25:39
  Jellyfish. We brew it for Austin, Texas. It's
• 25:42
  really hot in Austin. It's humid. So we do a
• 25:46
  hazy IPA that is dry, has bitterness. I mean,
• 25:50
  it almost drinks more in a West Coast realm that's
• 25:54
  just soft and has a little bit more fullness
• 25:56
  than what you're going to get from. Someone in
• 26:00
  the New England area where it's not 100 degrees
• 26:04
  for 90 days. So, like, you know, I don't think
• 26:08
  that beer would translate outside of Central
• 26:10
  Texas. I mean, it probably might, but it's not
• 26:13
  going to, like. It's pretty good. I mean, it's
• 26:15
  good. Yeah, thanks. But it's not, like, it's
• 26:17
  designed for our market, I think. So, like, I'm
• 26:21
  happy we don't have to figure out a national
• 26:23
  flavor. I also think that what you're talking
• 26:27
  about is leading to a lot of this fast innovation
• 26:30
  that cycles through the industry in a matter
• 26:33
  of months. And if it's not like quickly adapted,
• 26:36
  it just gets thrown away, which seems exhausting.
• 26:41
  Yeah. And then, I mean, yeah, thinking about
• 26:44
  like breeding hops for that, like how do you
• 26:46
  do that, right? Yeah, our own breeding program
• 26:49
  is, I would just say, been quite confused for
• 26:51
  a while because it started out as a... as a low
• 26:54
  trellis alpha breeder and then had to kind of
• 26:57
  reinvent itself as a high trellis aroma breeder
• 27:00
  you know at the same time looking for high trellis
• 27:03
  alpha and we still have some low trellis stuff
• 27:06
  in there too and then like as we're reinventing
• 27:09
  ourself as a high trellis breeder we're asking
• 27:12
  ourselves do breweries even want more choice
• 27:17
  but we kept on going and now we have some pretty
• 27:20
  good stuff in the program we feel But I think
• 27:24
  we're still asking ourselves that question and
• 27:26
  we're seeing interest. And so I think we're going
• 27:30
  to advance some varietals. I know we're going
• 27:33
  to advance some varietals, but there's still
• 27:35
  that question there about are they serving a
• 27:37
  real long -term purpose or are they just going
• 27:41
  to be kind of flash in the pan and whatnot? We've
• 27:45
  always kind of approached things. from the perspective
• 27:48
  that we want to solve a problem. And so you spoke
• 27:50
  a little bit about it. I mean, at the grower
• 27:52
  level, if we can figure out how to use less water,
• 27:54
  less inputs, things like that, that's great.
• 27:58
  But, I mean, it's really hard to crack into the
• 28:02
  market that's highly comprised of these HPC workhorses,
• 28:06
  really. And on top of that, now you have new
• 28:10
  brewing solutions, new innovations that, to your
• 28:15
  point, And then it's very confusing is on our
• 28:20
  side, where do you invest? Feels like at the
• 28:23
  end of the day, good, strong aromas with good
• 28:26
  yields that we can hit a price point and provide
• 28:31
  a brewer something that's stable and everything
• 28:33
  else will be ancillary. Yeah, I think the biggest
• 28:36
  thing that we potentially going on right now
• 28:40
  is that most of the varieties that we have released
• 28:43
  or looking at releasing are high yielding. varieties
• 28:46
  that basically require less inputs. I mean, that's
• 28:51
  a huge advantage for us and anybody else that's
• 28:53
  growing them, obviously, is, you know, if we
• 28:55
  use 20 % less water with very few, if any, pesticide
• 29:00
  or powdery mildew sprays, along with something
• 29:03
  that, you know, does 2 ,800 pounds to 3 ,200
• 29:06
  pounds per acre, it's a huge advantage to us
• 29:09
  and the supply chain because we can go in at
• 29:11
  sustainable pricing and blah, blah, blah. I don't
• 29:15
  know. It takes a lot of money to try and crack
• 29:17
  into that. And then we have a lot of our customers
• 29:20
  that have a good amount of their portfolio already
• 29:26
  in proprietary varieties. And then they have
• 29:28
  another percentage of their portfolio that's
• 29:30
  in Publix, you know, mostly Cascade, Centennial,
• 29:34
  Chinook, probably. Do they really want to see
• 29:37
  that proprietary portion of their portfolio increase?
• 29:42
  Because there's pros and cons with proprietary
• 29:44
  varieties and like our program is no different.
• 29:46
  Like as an example, Joe and I were sitting over
• 29:49
  the other night and we texted a brewer and one
• 29:52
  of our customers and we said, hey, how much of
• 29:54
  your portfolio is proprietary versus public?
• 29:58
  They said, well, does proprietary include, you
• 30:01
  know, your guys' stuff? And we're like, yeah.
• 30:04
  And they said, well, it's about 50 % HPC. I think
• 30:07
  it was like 15 % latitude 46. And then the rest
• 30:13
  was public. Probably mostly Centennial or Cascade.
• 30:16
  And I don't think that's probably an unrealistic
• 30:18
  mix. Like, what's yours? Well, our biggest one
• 30:24
  is a YCR. Because we're a huge Simcoe user. I
• 30:28
  love that variety. I mean, that's not an HBC.
• 30:31
  You know, it's a YCR. So that's our biggest by
• 30:33
  far. And then it actually flattens. Well, then
• 30:37
  citrus is probably our number two. But then it
• 30:39
  gets really flat with a bunch of varieties that
• 30:42
  are kind of a mix of either public or international.
• 30:47
  But like Chinook is typically, I think Chinook
• 30:51
  is our third by volume largest contract. But
• 30:55
  then, you know, we get a lot of Galaxy from HPA.
• 30:58
  We get. Mosaic is growing for us a little bit,
• 31:01
  but we haven't historically. I mean, we didn't
• 31:03
  contract Mosaic for a lot of years. We didn't
• 31:06
  have enough need for it, so we would actually
• 31:07
  write a contract to cover two years so that we
• 31:11
  could select it. So we would do 1 ,100 pounds
• 31:13
  and then just kind of chew away at it for two
• 31:15
  years and then recontract it. We're using a bit
• 31:18
  more now, but we're still, it's pretty low, but
• 31:22
  it's, yeah, Simcoe and Citra make up a large
• 31:25
  chunk of it. I mean, yeah, if you said pure.
• 31:29
  I mean, it's in some form, whether that's, you
• 31:34
  know, an HPC, YCR, HPA, it's probably 85%, you
• 31:38
  know, some form of a proprietary. So not to put
• 31:41
  you on the spot, but so there's a desire to see
• 31:43
  more choice. Currently, the portfolio is limited
• 31:48
  in terms of its support over the broader industry,
• 31:52
  maybe, to a mix that better supports a broader
• 31:55
  percentage of the industry. Sure. Yeah, I think
• 32:00
  there's a there's a couple of things going on
• 32:02
  in here about seeing more variety is, you know,
• 32:08
  you take an HPC variety. And if we limit the
• 32:13
  number of growers growing that for the particular
• 32:17
  sales desk, I'm going to see less options of
• 32:20
  that variety, which that's problematic for me.
• 32:23
  Like there is at one point where I mean, Drew
• 32:26
  can speak to it more how many. People are growing
• 32:28
  citrus and cone mosaic. There was a lot more
• 32:31
  options a few years ago than we're seeing in
• 32:34
  the last couple of years. So that becomes a concern
• 32:37
  for me because you start to look at just the
• 32:40
  same farms that are growing it. Some of them
• 32:43
  are really good growers of it, which is great.
• 32:45
  But the desire to not lose a smaller, more independent
• 32:52
  farm that maybe had 50 acres of citrus or mosaic.
• 32:57
  that they lost that contract. Well, that takes
• 32:59
  one off the table in the proprietary world. So
• 33:02
  I think there's kind of two things going on there.
• 33:04
  And then on the public to proprietary, I think
• 33:07
  this is Simcoe making up such a big chunk of
• 33:11
  it. It's going to be, you know, in some ways
• 33:12
  hard to move. Like there's always going to be
• 33:15
  a kind of a big starting percentage that's made
• 33:19
  up of that hop. But going back to some other
• 33:22
  varieties, if I could find replacements that
• 33:26
  are us grown i would prefer that it's funny how
• 33:32
  we got into galaxy we were sold galaxy because
• 33:34
  we they wouldn't sell a citra back in 2014 because
• 33:39
  there wasn't enough citra out there and we were
• 33:42
  a small brewery and so they wouldn't write a
• 33:44
  citra contract they're like but we got this hop
• 33:46
  galaxy we heard it's pretty cool would you be
• 33:48
  interested well then galaxy turned out to be
• 33:51
  like the next cool hop for about four years and
• 33:53
  then it was kind of really mismanaged and picking
• 33:55
  and everything and so then It got a bit of a
• 33:58
  black eye for a few years. I think it's coming
• 34:00
  back in quality now. It's been great. We've had
• 34:02
  it back in our beer for five. This will be the
• 34:04
  fifth harvest. We just selected it, and it's
• 34:07
  great. They've done a really good job. Hats off
• 34:10
  to HPA and how they've managed that. It's kind
• 34:13
  of funny how we ended up in some of these positions.
• 34:16
  We exist on a pretty short timeline. This is
• 34:20
  our 13th year. We really didn't have contracting
• 34:22
  power until maybe 2015. And then it was still
• 34:26
  only a few brokers. I mean, you guys have worked
• 34:29
  with us from day one, mainly because we, you
• 34:32
  know, I knew you guys from my Odell days. And
• 34:35
  we've had a couple other brokers or people that
• 34:38
  have worked with us from, you know, the beginning
• 34:39
  off and on sometimes, but I've always been there.
• 34:42
  And we've had a couple of merchants that have
• 34:44
  changed their name three times in that amount
• 34:46
  of time, you know, and we've had contracts off
• 34:48
  and on with them too. It's kind of a short. life
• 34:50
  cycle but you know from the public in the proprietary
• 34:55
  i think it's just what's out there it's going
• 34:58
  to be hard to move the needle huge to the public
• 35:01
  side i think if we have some more options that
• 35:05
  can compete more head -to -head with some of
• 35:07
  the proprietary and the brewers can influence
• 35:11
  some of the growers on how we want that profile
• 35:14
  of the hop to be it's going to For our portfolio,
• 35:21
  for example, it would shift the needle in public
• 35:24
  to proprietary. I think I'm more of a proponent
• 35:28
  of choice across the board, right? Whether that's
• 35:31
  public, proprietary. I think one of my biggest
• 35:35
  concerns in the current kind of down market turn
• 35:39
  with crops getting pulled or acreage being idled
• 35:44
  is the amount of... lots that we kind of get
• 35:48
  to look at shrunk a lot and it there's just less
• 35:52
  options to look at you know um there's a lot
• 35:54
  of farms that i think are getting buried more
• 35:57
  now that like they don't have the sales desk
• 36:00
  component and so if you're a brewer that has
• 36:03
  you know a longer history in the valley you might
• 36:05
  know them and you can talk to them more directly
• 36:08
  or specifically request them but if you're not
• 36:11
  and you're going through one of the larger brokers
• 36:15
  I think it's harder to see the full breadth of
• 36:19
  offering that's out there in the valley. And
• 36:21
  I think my concern as a brewer is if we consolidate
• 36:25
  the number of options that are being presented
• 36:27
  to us, it's harder for us to differentiate our
• 36:30
  beer in the long term. And then that's harder
• 36:32
  for us to command like a premium price. You know,
• 36:36
  I liken it to the wine world a lot in the space
• 36:40
  that we live in in craft where we're charging
• 36:42
  $18 a four pack and we're. really producing a
• 36:45
  high -end premium product. I'm not taking away
• 36:48
  anything from different craft that are operating
• 36:50
  different spears, but for us, we need to have
• 36:56
  that unique character for our customers to justify
• 36:59
  that price point. And if we are just getting,
• 37:03
  say, mixed lots of a certain variety or not being
• 37:07
  able to really get that specific flavor that
• 37:09
  has our thumbprint on it. we can't justify that
• 37:12
  price point or that experience for our customer
• 37:13
  the same way. That's what kind of gives me some
• 37:16
  concern with some of these farms that might get
• 37:19
  buried in that mix that are growing some amazing
• 37:22
  varieties that may be public or may be private,
• 37:25
  but it's just harder to be able to access them
• 37:28
  or find them because they're not a front -facing
• 37:31
  sales desk or they're not one of the major players
• 37:33
  for that broker in their model. If you don't
• 37:38
  have that sales desk or you don't have good alignment
• 37:42
  with the sales desk, and really that's the independent
• 37:45
  space, then you're really at risk of probably
• 37:49
  going out of business or just scraping by. And
• 37:52
  then there's this whole other conversation about,
• 37:54
  well, if you're just scraping by, are you really
• 37:56
  able to produce the flavors that you guys as
• 37:59
  brewers want because they can't afford the inputs?
• 38:03
  You know, it's just a slow bleed. Yeah, absolutely.
• 38:06
  I mean, you know, I'll put my Hop Quality Group
• 38:09
  hat on. You're starting to see a bit more separation,
• 38:14
  you know, in the last couple of years than what
• 38:17
  we saw, even during the big growth phase where
• 38:20
  everybody's putting in massive infrastructure.
• 38:22
  You're just starting to see some differences
• 38:25
  in like maybe how some of that machinery is being
• 38:27
  maintained or kept up or utilized than what we
• 38:31
  were seeing, say, in 19, you know, 18, 19. Probably
• 38:34
  still less separation than what I remember seeing
• 38:37
  15 years ago coming out here. I mean, just the
• 38:40
  whole level of growing and picking and processing
• 38:44
  is so much higher. We're not even talking about
• 38:47
  the same industry, it feels like, in some ways.
• 38:50
  But yeah, I think you're absolutely right. That
• 38:52
  separation gets harder and harder to maintain.
• 38:55
  And then it's, looking at it from a brewer perspective,
• 38:58
  I go back to the premiumization of some of these
• 39:02
  beers. But it's easier for us or like a taproom
• 39:06
  brewery or, you know, brewery that's selling
• 39:08
  a lot of direct -to -consumer to absorb a slightly
• 39:11
  higher price point on those hops to get a specific
• 39:13
  profile than someone who is, you know, making
• 39:17
  an extremely small margin in a grocery store
• 39:20
  setting or a retail setting. But then if you
• 39:22
  can't get to the independent farm, you can't
• 39:24
  even offer to pay them that extra money to support
• 39:28
  that, which is challenging, you know? Yep. Yeah,
• 39:32
  a lot of people just can't afford to have their
• 39:34
  own sales desk, sales team, processing infrastructure,
• 39:38
  all of that. So, I mean, the way I look at the
• 39:41
  independent space is there needs to be more collaboration
• 39:44
  and maybe even some consolidation in the independent
• 39:48
  space in order to maintain that choice for the
• 39:53
  brewers. often come at the cost of others you
• 40:04
  know to protect ourselves i mean we're businesses
• 40:06
  at the end of the day same as you guys are yeah
• 40:08
  for sure you know i mean that's the reality right
• 40:10
  we can dance you know i think craft was trying
• 40:13
  to dance around that for a lot of time like everything's
• 40:15
  just we're all happy we're all just existing
• 40:17
  in this space like everybody's gonna grow it's
• 40:20
  gonna be wonderful like that's it you know it's
• 40:22
  really great to think about it that way but that's
• 40:23
  not real like at the end of the day like we need
• 40:26
  to take someone's shelf space at the end of the
• 40:28
  day to grow or we need to find more consumers.
• 40:31
  Those are the two ways to grow. I think what
• 40:34
  is interesting is, and again, I'll kind of throw
• 40:36
  the Hop Quality Group hat back on, but when we
• 40:38
  do these visits, one of the questions I've been
• 40:40
  asked in the last two years is really like, what
• 40:42
  can we as brewers do to help the growers, whether
• 40:47
  they're more on the independent side, more in
• 40:49
  a co -op model, or even like a merchant -owned
• 40:52
  model, but really asking the farm managers and
• 40:54
  the growers and the people that are managing
• 40:56
  that acreage. It's communication transparency
• 41:00
  because I think they're still seeing the merchants
• 41:04
  being kind of a filter between the brewers and
• 41:07
  them. And there's still kind of this feeling
• 41:10
  that there's not an understanding of what, you
• 41:12
  know, brewers really need from the growers specifically.
• 41:14
  It gets kind of filtered through. And I think
• 41:18
  that's just, I mean, that is the nature of it,
• 41:19
  right? That's going to happen. And I don't think
• 41:22
  there's anything wrong with that. I don't think
• 41:24
  you can fault anybody on that. But I do think.
• 41:28
  And this is something that, you know, I've been
• 41:30
  also thinking a lot about is, you know, we have
• 41:33
  kind of this new generation of brewers that are
• 41:35
  coming out here. You know, it's not the folks
• 41:37
  that started to build a lot of these relationships
• 41:40
  with the growers. It's, you know, we're now all
• 41:42
  in our early 40s, like myself and Steve Luke
• 41:46
  and Kelsey McNair and, you know, Bob Highland.
• 41:50
  And, you know, but like we need to start making
• 41:52
  a more concerted effort, like our generation
• 41:54
  than the generation behind us to build those
• 41:56
  relationships direct to. these growers and not
• 41:59
  get so caught up in some of the merchant stuff
• 42:03
  you know yeah and so when I look at our ranch
• 42:06
  are we an independent are we not I mean we deal
• 42:09
  you know large volumes to some of the merchants
• 42:12
  and we also have a sales desk and we have to
• 42:18
  because we're big enough that nobody at least
• 42:22
  to date has wanted to take all of our hops you
• 42:24
  know And that puts us in a really awkward position
• 42:27
  because we just want to be good partners to our
• 42:29
  direct customers and our merchant customers and,
• 42:33
  you know, do a good job. And we have gotten ping
• 42:38
  -ponged around and labeled as a competitor, which,
• 42:40
  yes, okay, we are selling to some of the same
• 42:43
  customers. But that doesn't mean that we're not
• 42:46
  good partners when we sell hops to you, you know,
• 42:51
  merchant. And so, I don't know, it's been pretty
• 42:53
  frustrating. Because at the end of the day, like
• 42:56
  we can do both in my mind. I mean, yeah, it doesn't
• 43:00
  sound much different than, you know, it'd be
• 43:02
  like, well, there's a lot of similarities with
• 43:04
  the beer world, right? Like if we're selling
• 43:06
  direct to consumer versus through our distributor,
• 43:08
  there's some feeling that if we're not giving
• 43:11
  them beer because we're selling it direct to
• 43:13
  our consumer, then they're like, well, you're
• 43:15
  taking away our sales. I don't know. That's just,
• 43:19
  it is what it is. Yeah, it is what it is. You
• 43:21
  know, we keep coming back to this. idea of choice
• 43:25
  and i think when we originally sat down maybe
• 43:29
  just because it was it's kind of a fresh conversation
• 43:32
  about public versus private it is more about
• 43:37
  choice you know i think i'm i'm thinking about
• 43:40
  that it's not public versus private it's about
• 43:43
  choice and in this current market like you just
• 43:46
  said there is less choice within these varietals
• 43:53
  Well, I think my guess is the hops that have
• 43:57
  the most amount of choice to look at are probably
• 44:00
  still Cascade and Centennial. Just because they're
• 44:03
  probably growing on the widest number of farms.
• 44:05
  There's going to be the most lots of them, even
• 44:06
  though the acreage may not be as big as Citra.
• 44:09
  Oh, interesting. That'd be my guess. I don't
• 44:12
  know. You guys probably know better than me.
• 44:15
  I think of how many farms I go on to early in
• 44:18
  the year when I'm out here in August that are
• 44:20
  gross Centennial. We don't buy Centennial. But
• 44:23
  a lot of people grow Centennial, you know, where
• 44:25
  you can kind of like know all the Citra farmers.
• 44:28
  I mean, to your point, yes, there's probably
• 44:31
  still a higher number of individual farms that
• 44:35
  grow Cascade Centennial and probably even Chinook,
• 44:38
  right? Yeah, Chinook. Yeah, so those three, I
• 44:40
  guess. And so those three. So when you look at,
• 44:43
  you know, the number of farms that could potentially
• 44:46
  put on the table, it's probably higher, right?
• 44:51
  But they're still pretty widely distributed in
• 44:53
  small amounts. And so that can serve a purpose
• 44:56
  for maybe like a smaller brewer selecting. There's
• 45:01
  more selection, but there's also more variability.
• 45:05
  And it's really hard to kind of wrangle all of
• 45:09
  that on one table. Oh, for sure. And a lot of
• 45:12
  those lots. I mean, we would never look at anyways
• 45:16
  because they're direct to brewer contracts that
• 45:18
  are going out there. I guess I'm just thinking
• 45:21
  of it in if we consolidate certain varieties,
• 45:25
  it's going to limit flavor development in beer
• 45:30
  because you're going to have more singular notes.
• 45:35
  They're all coming off like the same rootstock
• 45:37
  or same fields, same kind of pick windows. I
• 45:41
  mean, like right now, I think there's like you
• 45:42
  think of like. The difference between an Idaho,
• 45:45
  Oregon, and Washington grown variety. And then
• 45:50
  you get in Washington, you have a Moxie grown
• 45:52
  hop versus Toppenish versus Prosser. There's
• 45:55
  some big differences. But if you start cutting
• 45:58
  some growers that are all down by Prosser out
• 46:00
  of a variety, like you just kind of took a flavor
• 46:03
  profile off of the table. Oh, yeah. Yeah, that's
• 46:09
  something I always thought was kind of interesting.
• 46:11
  If I ever owned a brewery. from my previous work,
• 46:14
  being able to work in all three States and all
• 46:17
  throughout the Valley, I could tell you exactly
• 46:19
  where I would go by variety for the profile that
• 46:21
  I like. And it's all over the Northwest by variety
• 46:25
  of what I'd be looking for. Yeah. I mean, they,
• 46:29
  they're all very different, you know, and they're,
• 46:31
  they're not better or worse necessarily. They're
• 46:33
  just different. And so it's like, as a brewer,
• 46:35
  we have a profile and there's stuff that we like
• 46:38
  in that. And we're going to select towards that.
• 46:42
  And again, so I guess like my anxiety about it
• 46:45
  is like, well, if we're cutting an area and then
• 46:47
  all of a sudden like mine gets chopped and I
• 46:49
  get forced into this other area, like that's,
• 46:52
  that's tough. Then I need to figure out what
• 46:54
  am I replacing that with or how am I moving that
• 46:56
  profile? Yeah. So maybe that's another point
• 46:58
  of the breeding program is to keep putting more
• 47:01
  options out there. When you look at the hop industry
• 47:05
  in general, and this could be through answered
• 47:08
  through the lens of your position with top quality
• 47:10
  group or. pint house or general feel, where do
• 47:16
  you see that the U S hop industry has, has a
• 47:22
  ways to go still? Cause you've already pointed
• 47:25
  out the, you know, we've invested heavily into
• 47:27
  new quality programs, updating facilities, all
• 47:31
  of that sort of stuff. And we should all feel
• 47:34
  really good about that. And the progress we've
• 47:36
  done collectively to get there between growers
• 47:38
  and brewers and wondering like, What's the next
• 47:42
  evolution that has to happen where we're just,
• 47:45
  we're not there yet or we're totally missing
• 47:48
  the mark. You're not going to hurt our feelings.
• 47:52
  No, that's a really good question. And this is
• 47:53
  something that actually this, I had a conversation
• 47:56
  with, I want to say it was, it was Jason Peralt
• 48:01
  years ago, but it was written in regards to breeding,
• 48:03
  but figuring out like in the breeding side, kind
• 48:06
  of jumping back in the conversation earlier about.
• 48:09
  you know like what is the role of breeding but
• 48:11
  how could you like have a small program that
• 48:14
  can get brewers hops in an efficient way that's
• 48:17
  kind of constantly evolving it's not you're not
• 48:19
  putting so much behind one variety that it has
• 48:22
  to become a huge variety for it to make financial
• 48:26
  sense and i think that's something that like
• 48:29
  that connection with the brewer could be part
• 48:33
  of it is like how do we find like a kind of a
• 48:36
  more nuanced connection to the to the breeding
• 48:39
  program rather than like, we're just going to
• 48:41
  solve all the problems with each new big variety.
• 48:44
  I mean, as far as like farms go or ranches, like
• 48:47
  you go on a lot of these now, I mean, there's
• 48:49
  not much that we're going to see. You know, if
• 48:52
  I put my hop quality group hat on and look at
• 48:53
  food safety, like things are pretty good. I think
• 48:56
  over the next few years, the big thing is going
• 48:58
  to be maintenance. You know, there's a lot of
• 49:00
  new equipment out here, but there's also not
• 49:04
  as much money. And so making sure that, that.
• 49:07
  Equipment stays maintained and, you know, like
• 49:10
  all the little things are being maintained so
• 49:12
  that we don't have leaky gearboxes over product
• 49:15
  or we're fixing stuff when it's broken. I think
• 49:20
  that's kind of like the big stuff over the next
• 49:21
  few years from that side of things. But I think
• 49:25
  it's I think it's that connection with the it's
• 49:28
  just the brewer to grower, you know, and like,
• 49:30
  how do we find that transparency? I mean, hops
• 49:34
  live in such a weird world because it's like
• 49:35
  there's the commodity aspect, even in the Roma
• 49:37
  side, the commodity aspect of just like you have
• 49:39
  to grow a lot of acres. But then we want like
• 49:43
  very specific profiles at times. But how do you
• 49:47
  do that in a way that's like going to be profitable
• 49:49
  for you? It's not like wine where you can grow
• 49:51
  a small little thing of grapes and do like a
• 49:52
  single 200 bottle release of wine off of one
• 49:56
  terroir on a hillside. Like you couldn't be profitable
• 50:00
  growing that in hops. just selling it to me and
• 50:04
  me brewing a beer. Like you have to have more
• 50:06
  than that. Yeah. And I think sometimes when I
• 50:10
  say, you know, public versus private, I'm also
• 50:13
  in the back of my mind thinking about, you know,
• 50:16
  health and how do we keep producing and being
• 50:20
  healthy in this, you know, quasi independent,
• 50:23
  you know, merchant serving space. And, and then,
• 50:28
  you know, you get into like breeding and genetics
• 50:30
  and market share and all these different things.
• 50:32
  And so I'm listening to, you know, you talk about
• 50:36
  your desire for diversity in the supply chain
• 50:38
  and, and having these unique profiles and then
• 50:42
  also thinking about, you know, the need for scale
• 50:44
  with, you know, all these headwinds out there
• 50:46
  on labor costs and, you know, overhead and, and
• 50:51
  we're no different. Like we need to basically
• 50:53
  maintain a size and there's a lot of headwinds
• 50:57
  in the marketplace. And how do we do that? Is
• 50:59
  it with Publix? Is it with? Proprietaries, what
• 51:03
  is it with? Who do we partner with? I don't have
• 51:06
  all the answers, but as I look over that landscape
• 51:09
  and I think about all the different brewers that
• 51:12
  we deal with and their desire for probably the
• 51:15
  same thing, how do we bring that all together
• 51:19
  and create a healthier supply chain? Because,
• 51:23
  I don't know, you could probably argue that the
• 51:25
  supply chain is healthy or unhealthy right now.
• 51:27
  Probably generally unhealthy, I would say. companies
• 51:32
  and certain pieces of that supply chain that
• 51:34
  are healthier than others and so like what is
• 51:36
  that what is that solution i think the what people
• 51:39
  keep looking to are proprietary genetics and
• 51:42
  it's like you know we need these proprietary
• 51:45
  genetics that can be more stable or higher priced
• 51:47
  in order to survive moving forward and like what
• 51:51
  what do we need to do as i don't know if the
• 51:55
  question is as growers or if it's what do we
• 51:58
  do as independent, you know, direct -to -brewer
• 52:02
  sellers and marketers? Like, what do we need
• 52:06
  to do to be healthier moving forward? Yeah, I
• 52:11
  don't know how much growers can actually do.
• 52:14
  What are we defining as growers? Just growers
• 52:17
  with no sales desk? Growers in general. Okay.
• 52:20
  Communication is the only way that we're going
• 52:22
  to come out of this in the next couple years
• 52:25
  as a more stable supply chain. A problem that
• 52:29
  we have right now, you know, there's objectively
• 52:35
  60 -some -odd thousand acres of capacity in the
• 52:38
  U .S. hop industry right now. There are 41 ,000
• 52:42
  acres planted. We're growing less than the annual
• 52:46
  demand because we're working through inventory,
• 52:48
  right? That's been well discussed. Once we get
• 52:51
  the inventory flushed out of the system, what
• 52:54
  do you think a healthy U .S. acreage number is
• 52:57
  moving forward? 45 to 48. But it depends on a
• 53:02
  couple different things. There's yield, virus
• 53:05
  -free. There's the alpha piece is massive. A
• 53:09
  lot of it depends on what goes on in Germany.
• 53:11
  That could go back up significantly, or we could
• 53:15
  bleed the alpha thing down. But the big question
• 53:19
  is, if we need, let's say, 25 % less acres than
• 53:22
  we have capacity for, there's too many mouths
• 53:26
  to feed in this industry. Right now, you have
• 53:31
  some mouths that are fed just fine. And then
• 53:35
  you have a whole bunch that are just getting
• 53:38
  by. If we concentrated the acreage back to a
• 53:43
  certain group of growers, I think we'll be fine.
• 53:47
  But I mean, by definition, we need growers to
• 53:50
  go away. And that sucks to say. But there's no
• 53:54
  other way around it. We have too much capacity.
• 53:56
  The investment's been made. But then the question
• 53:59
  is, how many do we need? Because you could run
• 54:01
  into a situation real quick where, okay, Drew's
• 54:05
  idea of 45 ,000 was wrong. The number's actually
• 54:09
  52 ,000, but we just lost eight growers, you
• 54:14
  know, making these numbers up. But, well, now
• 54:16
  we've got to go reinvest in capacity again, and
• 54:20
  price has to go up, and there's a shortage. Like,
• 54:23
  brewers' balance sheets cannot afford higher
• 54:25
  -priced hops right now. And we can't afford empty
• 54:28
  trellis right now. The only way to figure that
• 54:32
  out is by, I think by communication or hop exchange
• 54:36
  where the market figures it out, but that's never
• 54:40
  going to happen. So I'll get off that idea. I
• 54:44
  think one more thing on the like proprietary
• 54:46
  versus public, you know, like the definition
• 54:49
  of them. I think the, I think the reality is
• 54:52
  if you pulled. like a cross section of brewers
• 54:56
  my guess is a lot of brewers don't understand
• 55:00
  what that really means there's like the ones
• 55:03
  that are kind of in the gray area too that you
• 55:07
  can grow under licensing but you're not paying
• 55:09
  royalty but yeah i bet if you ask a lot of brewers
• 55:13
  they don't really know what that means you know
• 55:15
  like i don't think they think of citra as like
• 55:17
  a proprietary necessarily i don't think they
• 55:20
  i think a lot of brewers a lot of younger brewers
• 55:22
  probably just see it as like It's another hop
• 55:25
  that we get from this merchant. Yep. So I think
• 55:28
  there's an education piece on that side as well.
• 55:31
  Yeah, that's a good point. I do want to jump
• 55:35
  back. We were talking about the hop products.
• 55:38
  What's going on with that is really interesting.
• 55:40
  And I don't know if it's really interesting in
• 55:42
  a good way. So there's like a theory out there
• 55:45
  with beer right now that there's just too much
• 55:47
  inventory in the supply chain. And a lot of this
• 55:50
  was coming out of the pandemic. Distributors
• 55:54
  started carrying more inventory as things slowed
• 55:56
  down and then warehouses started having more
• 55:58
  inventory. And then we had this, you know, a
• 56:03
  lot of retailers started adding SKU space in
• 56:07
  their sets so they had more inventory. You know,
• 56:11
  beer slowed. But really, it felt more exacerbated
• 56:17
  than it really was because it had to clear all
• 56:19
  of that inventory. Through the system. And so
• 56:22
  it's kind of, I mean, there's some similarities
• 56:23
  to what's going on in hops, right? Like if a
• 56:26
  retailer drops 20 % of their inventory in beer
• 56:29
  because they, they shrunk the shelf and then
• 56:32
  the distributor has to like work through their
• 56:35
  smaller inventory. So, you know, it's like this
• 56:38
  rubber band effect back to the brewer. So you
• 56:40
  have like a, like the hop products. Well, we
• 56:42
  got long. So now we're coming up with different
• 56:44
  novel ways to put hops into these things to store
• 56:47
  longer. You know, like what's the percentage
• 56:50
  of brewers that they're ultimately marketed towards
• 56:52
  or that they could use them effectively? You
• 56:56
  know, there's 9 ,000 plus craft brewers. There's
• 56:59
  some crazy stat that I learned from a brewer
• 57:01
  friend of mine. It's something like the 4 ,500
• 57:04
  range is like 600 barrels or something like that.
• 57:08
  Oh, wow. Like it's a very long tail. I didn't
• 57:13
  know it was that small. Yeah, because the reason
• 57:16
  it came up is we're doing a collab in there.
• 57:18
  Their pilot system, it's how much they brewed
• 57:20
  on their pilot system, and they basically realized
• 57:22
  that they would be in the top 50 % off their
• 57:24
  pilot system, which is kind of wild. That's crazy.
• 57:27
  But then there's so much marketing effort around
• 57:30
  all these new products, but it's really the same
• 57:34
  few larger craft and really non -craft that it's
• 57:39
  towards, but it makes it feel like all these
• 57:43
  crafts should be adopting it, but it's just kind
• 57:45
  of holding inventory in the pipeline. Mm -hmm.
• 57:48
  That's a really good point. Just for clarity,
• 57:53
  when we say hop products or alternative hop products,
• 57:56
  we're talking about what, concentrated pellets?
• 57:58
  Or are we talking mostly about kind of like these
• 58:01
  oil extractions? I think like either the emulsified
• 58:05
  or non -emulsified oil, like flowables, downstream
• 58:08
  products are like the big ones. Concentrated
• 58:11
  pellets have been around for a long time. I mean,
• 58:12
  they got branded more recently, but T45s have
• 58:16
  been around. I get that like CO2 extract and
• 58:19
  some of that, but that's a, that's a totally
• 58:21
  different deal. I think it's more into these
• 58:23
  flowable, you know, where you're super concentrated
• 58:27
  and they're great. You can do some cool things
• 58:29
  with them, but like a brewery making a thousand
• 58:31
  barrels a year. I mean, how much of that are
• 58:34
  you using? Like, how does that, it's tough to
• 58:36
  say that's going to move the needle on depleting
• 58:38
  any hop supply. And is it the right move for
• 58:41
  a brewery like that? Yeah. Well, and the bigger
• 58:44
  challenge that I see. I think we've talked about
• 58:47
  this on the program. We've talked a lot about
• 58:49
  it with individual brewers. So we have probably
• 58:54
  four different buckets, maybe five. We have what's
• 58:59
  being produced on an annual basis. We have what's
• 59:02
  being stored at the merchant level. What's being
• 59:06
  stored in downstream products. What is being
• 59:12
  stored at a secondary merchant level. Somebody
• 59:16
  that's not the one that originally purchased
• 59:18
  it. Right? And then what's being held at the
• 59:21
  brewer level. And nobody knows what those numbers
• 59:25
  are. And because we don't know those numbers,
• 59:29
  this is how markets go absolutely bonkers. Is
• 59:34
  once one chink in the supply chain happens, anywhere
• 59:38
  in there, all the dominoes start falling. As
• 59:43
  long as... The first one, the actual production,
• 59:47
  is below usage. But because there's no visibility
• 59:51
  into where these things are at, and to your point,
• 59:55
  a lot of them are just being staged right now
• 59:57
  into downstream products that are quite useful
• 1:00:00
  to many, as you pointed out. I mean, the Dynair
• 1:00:02
  Boost, Hyper Boost, you hear great things about
• 1:00:05
  those, Abstracts. I mean, those are kind of the
• 1:00:08
  ones that I hear a lot about and hear good things.
• 1:00:10
  You know, obviously some preference makes reviews,
• 1:00:12
  whatever, but generally speaking, really good
• 1:00:14
  stuff. We have no idea how much of that is sitting
• 1:00:16
  out there. No idea what's sitting in warehouses.
• 1:00:20
  I mean, it goes back to how I was mentioning
• 1:00:21
  about storage fees earlier. The reason Roy Farms
• 1:00:24
  is cutting storage fees is because we don't want
• 1:00:26
  our inventory. Well, A, it doesn't make sense
• 1:00:28
  for the brewer because their brew year is different
• 1:00:31
  than our growing year, but we don't want them
• 1:00:35
  to take our hops to another warehouse. Because
• 1:00:37
  then you lose the transparency piece. You have
• 1:00:39
  no idea. And you can't communicate with the brewer
• 1:00:41
  and say, hey, do you need this shit or not? And
• 1:00:43
  if you don't, let's find somebody who does because
• 1:00:47
  it's going to work out better for both of us.
• 1:00:48
  But the second it leaves here and doesn't go
• 1:00:51
  into a brew kettle within two months or whatever,
• 1:00:54
  we have no idea what's going to happen. At least
• 1:00:58
  it's a data point that we still have control
• 1:01:01
  over or visibility into. Yeah, it's scary. Where
• 1:01:05
  is all this stuff? It's like, you know, I think
• 1:01:08
  the CBC every year they do that brewery accelerator,
• 1:01:12
  how to start a brewery, like, pre -conference.
• 1:01:15
  There should be, like, every year it should be
• 1:01:16
  the same hop contracting talk of, like, this
• 1:01:19
  is how much, you know, you should contract for
• 1:01:22
  three years, you know, the 175, 50%. I mean,
• 1:01:25
  I think we used to always say, like, a rolling
• 1:01:27
  15 -month inventory. Now with processing times,
• 1:01:30
  like, all the suppliers are really getting processing
• 1:01:32
  done by the first of the year. So maybe it's
• 1:01:35
  a rolling 12 -month. Maybe it just needs to be
• 1:01:39
  harped on brewers, like, every year. Like, it's
• 1:01:42
  mandatory. You have to sit through this talk.
• 1:01:45
  It's like getting your driver's license. Yeah,
• 1:01:47
  yeah. You get your brewer's license, you have
• 1:01:49
  to sit through this talk. Like a citizenship
• 1:01:51
  test? Like, you got to pass it to come into the
• 1:01:55
  brewing industry? Yeah. And then, yeah, when
• 1:01:57
  you select, like, you know, I agree to not contract
• 1:02:01
  at 140 % just because I think this is cool. Yeah,
• 1:02:05
  I don't know. But I think that's a big reason
• 1:02:07
  we got really, well, yeah, I got a lot of theories
• 1:02:09
  from the brewer's side on why we got really out
• 1:02:12
  of whack. Brewers like to get their egos stroked,
• 1:02:15
  and merchants and growers did a really good job
• 1:02:18
  for six or seven years of telling brewers how
• 1:02:22
  great they were. Sure, you're going to keep growing.
• 1:02:26
  Yep. I know you did 500 barrels and you grew
• 1:02:31
  by 200 % this year, so you'll definitely grow
• 1:02:33
  by 200 % next year. I would just go ahead and
• 1:02:35
  lock that in now. Probably for the next 10. Yeah,
• 1:02:37
  if you want to just start there. Start there.
• 1:02:43
  To that point about how it took years and years
• 1:02:45
  of stroking the brewer ego, what makes me think
• 1:02:51
  that our annual acreage actual need could be
• 1:02:54
  higher than what I think is that was going on.
• 1:02:59
  For years, like probably starting in 2021, something
• 1:03:05
  like that, where inventory had to have been compounding,
• 1:03:07
  but the huge cuts didn't happen until 24 crop.
• 1:03:12
  It somehow carried itself for a few years, but
• 1:03:16
  beers only down, you know, whatever, 8 % or whatever
• 1:03:20
  it is since then. Now, granted, usage has changed
• 1:03:22
  and all that, but if inventory was compounding
• 1:03:26
  that whole time. Well, how many acres did you
• 1:03:29
  have in the ground in, say, 2019? The industry?
• 1:03:34
  Yeah, or like Washington or whatever you guys
• 1:03:37
  are going off for numbers. I think it was probably
• 1:03:40
  50 ,000 or something in 2019. Because if you
• 1:03:45
  look at the chart of beer consumption, you know,
• 1:03:50
  we had the spike and then we went down. But if
• 1:03:52
  you actually look at how it trends, it's still
• 1:03:55
  trending at the same. So, I mean, I think you're
• 1:04:00
  probably way under an acreage right now. And
• 1:04:02
  she was probably pretty close on where the acreage
• 1:04:04
  should be, especially given some of the maybe
• 1:04:06
  higher yielding varieties that have come in.
• 1:04:09
  But it's probably not far off of like a 2020
• 1:04:12
  number for acreage. Oh, for acreage? Like total?
• 1:04:15
  Yeah. While Drew's looking at that, I'm just
• 1:04:19
  looking at, you know, 2020 to 25. Just because
• 1:04:22
  I have these highlighted, like, you know, citra
• 1:04:24
  acreage was like, you know, 11 ,000 acres in
• 1:04:27
  2020, and now it's down to 7 ,500 in 2025. It
• 1:04:34
  was 56 ,000 in 2019. 112 million pounds produced.
• 1:04:42
  Mosaic was 55, peaked at 65, down to 3 ,500.
• 1:04:50
  Cascade is peaked in 22 at 51, down to 2 ,600.
• 1:05:00
  Centennial's been pretty stable. It's like 2
• 1:05:01
  ,900, 23, 24, 24, 24, 25. Chinook's been pretty
• 1:05:06
  stable. Well, that kind of makes sense, too.
• 1:05:08
  I mean, you talked about how there's kind of
• 1:05:09
  two growers that make up a large percentage.
• 1:05:11
  I mean, there's kind of two brewers that buy
• 1:05:13
  a large percentage of that crop. Yeah. You're
• 1:05:19
  probably pretty close with your estimate, Drew,
• 1:05:21
  on what you think the total acreage needs to
• 1:05:23
  be. I would guess so. If you just take that back
• 1:05:27
  of the napkin math on where beer was and then
• 1:05:30
  when we started compounding inventory and all
• 1:05:33
  of that, it's probably sitting in that mid -40s.
• 1:05:36
  Yeah. Well, it's interesting because we're seeing,
• 1:05:39
  and back to the transparency of where all the
• 1:05:42
  stocks held, we are seeing large actors come
• 1:05:46
  back into... contract that weren't doing that
• 1:05:51
  over the past three four years but the big cut
• 1:05:54
  happened again in 24 so we're in the we're still
• 1:05:58
  in the first brew year of that huge acreage cut
• 1:06:01
  which that's the part that is concerning that
• 1:06:06
  it's all trying to use a crystal ball and until
• 1:06:10
  brewers go take their brewing citizenship card
• 1:06:14
  or test and Like we kind of figure out where
• 1:06:19
  we're at. That would be a fascinating survey
• 1:06:21
  for either Hop Quality Group, even if it was
• 1:06:24
  Hop Quality Group members with 100 % response
• 1:06:26
  rate, or for the BA to do is something that says
• 1:06:30
  how much inventory plus contracted volume do
• 1:06:35
  you have percentage -wise relative to annual
• 1:06:38
  demand? I'll propose it to Hop Quality Group.
• 1:06:41
  Even in a small group, you probably won't get
• 1:06:43
  100%. but I bet we get pretty high. We've kind
• 1:06:48
  of rolled through a lot of the overages that
• 1:06:50
  we had in 2020, 2021. Yeah. Well, it would be
• 1:06:56
  a very, very, very smart thing for, that was
• 1:06:59
  a lot of Aries. A lot of Aries. For brewers to
• 1:07:03
  provide that information because, and self -serving,
• 1:07:06
  because if let's say the number is across the
• 1:07:12
  entire industry, 60 million pounds of aroma that
• 1:07:17
  needs to be, it's not that high, it's probably
• 1:07:19
  50, 55 million that gets used domestically. If
• 1:07:23
  I had to take a guess of aroma hops, let's say
• 1:07:27
  there is 110 % is the actual number. So we have
• 1:07:34
  5 million extra pounds and we're producing significantly
• 1:07:39
  under that. A shortage would... Cause crazy,
• 1:07:45
  crazy pricing and nobody can afford that. No,
• 1:07:51
  that wouldn't be, that would be bad timing right
• 1:07:53
  now. Like really. So if we could figure out a
• 1:07:56
  way as an industry, as a global supply chain
• 1:07:59
  to say, okay, here's where we're at. It can be
• 1:08:04
  totally anonymous and then get it all analyzed.
• 1:08:06
  Then at least we could say, Hey, here's what
• 1:08:10
  we actually need. to come back and then you build
• 1:08:15
  in crop variability and we can look at that you
• 1:08:18
  know that's not that hard to analyze by variety
• 1:08:20
  and okay here's where we need to be yeah i think
• 1:08:24
  and well probably unfortunately like we talked
• 1:08:27
  about you know you ask one farmer for a answer
• 1:08:31
  to solve a problem you're going to get a different
• 1:08:34
  answer from every other farmer brewers are gonna
• 1:08:37
  all have their own opinions on all of that stuff
• 1:08:39
  and I'd be curious the willingness of participation
• 1:08:43
  outside of – I mean, there's a lot that I could
• 1:08:46
  foresee that I'd be really willing. I mean, the
• 1:08:49
  VA does a raw material survey. It's not going
• 1:08:52
  to help you understand how much inventory you're
• 1:08:55
  holding and how much is out there. And the participation
• 1:08:58
  is fairly low. And I'll be honest, I forget to
• 1:09:01
  do it some years because it gets in my email
• 1:09:03
  and I get lost. If pricing came back on hops
• 1:09:08
  right now and we went back to 2019 pricing, that
• 1:09:11
  would be brutal because there's not room to take
• 1:09:13
  price on beer right now yeah we can't go to the
• 1:09:16
  consumer i mean yeah okay so this is like a huge
• 1:09:20
  frustration of mine we come out of the pandemic
• 1:09:22
  and we got coffees 48 higher you know all these
• 1:09:25
  other non -elk beverages are taking these huge
• 1:09:28
  prices but like for some reason we can't take
• 1:09:30
  price with beer they this expectation that beer
• 1:09:33
  should still cost what it did when everybody
• 1:09:35
  turned 21 you know whatever beer costs when you
• 1:09:38
  turn 21 is what you expect beer to cost for your
• 1:09:40
  whole life. And I mean, you're, you're just saying
• 1:09:43
  that the expectation is, is widespread or that's
• 1:09:46
  like tap room versus retail, or you'd say it's
• 1:09:50
  the same. I think that's more grocery tap tap
• 1:09:53
  rooms, a little easier to take price, but it's
• 1:09:56
  still hard. I mean, the consumer's getting fatigued
• 1:09:58
  out there. Right. And I think the retailer actually,
• 1:10:01
  and this is an, I'll give an Austin example.
• 1:10:04
  The retailer is to blame in a lot of cases. We've
• 1:10:07
  got a lot of bars in Austin where it's hard to
• 1:10:08
  get a pint under $8. There's no reason they should
• 1:10:12
  be charging $8. Our beer has not gone up. In
• 1:10:16
  our beer, they might be charging $10 or $12.
• 1:10:18
  And it's like there's no reason. Our keg has
• 1:10:20
  been the same price for five years. What are
• 1:10:22
  you charging in the tap room? So we're like $6
• 1:10:25
  to $8 depending on style of beer and whatnot.
• 1:10:29
  But yeah, it's like $7 is pretty typical. $6,
• 1:10:32
  $7 more one -offs or bigger beers might be that
• 1:10:35
  higher price point. Sure. And that's, you know,
• 1:10:37
  I get like stadium pricing or I get concerts
• 1:10:40
  or whatever, but like, yeah, you just go into
• 1:10:42
  a bar downtown and they have a $12 pour. It's
• 1:10:45
  probably not even a 16 ounce pour. Like, come
• 1:10:48
  on. I mean, you're just, you're literally driving
• 1:10:49
  customers away from us at this point. Yes. That's
• 1:10:54
  another rant. That's a problem I have with the
• 1:10:55
  three tier system of beer too. Yes. Future episode,
• 1:11:01
  three -tier system. I mean, mostly the three
• 1:11:04
  -tier system works, but the retailer, I think
• 1:11:06
  a lot of times the distributor gets a lot of
• 1:11:10
  hate over the years. They always seem to be kind
• 1:11:13
  of the punching bag for the industry. I would
• 1:11:16
  definitely put the retailer as one of the big
• 1:11:18
  issues right now. I think they've gotten very
• 1:11:20
  greedy coming out of the pandemic because consumers
• 1:11:22
  aren't going out as much. I mean, there's a lot
• 1:11:25
  of data to show that. So it's like the retailer,
• 1:11:29
  instead of giving them, more reasons to come
• 1:11:31
  out they like flip the script and they're like
• 1:11:33
  well we're just gonna charge you more if you're
• 1:11:34
  not coming as much it's like how does that get
• 1:11:37
  people to like want to come out and drink more
• 1:11:39
  beer yep yeah i don't know they've they've gotten
• 1:11:43
  pretty greedy i think as a result and it'll cycle
• 1:11:47
  back i mean it's just the hospitality industry
• 1:11:49
  nature i mean there's going to be people that'll
• 1:11:52
  come in and find a way to kind of circumvent
• 1:11:55
  that and be more competitive but The interesting
• 1:11:58
  thing about that is the supply chain in general
• 1:12:00
  right now. If we just looked at beer, and this
• 1:12:02
  is true in other ag space as well, because I
• 1:12:05
  know the retailers are impacting apples really
• 1:12:08
  bad, but the industry could definitely absorb,
• 1:12:12
  maybe not for every brewer, but if price was
• 1:12:17
  dropped, economics would say you're going to
• 1:12:19
  move more volume. There's a lot of empty fermenters
• 1:12:23
  out there and there's a lot of empty hop trellis.
• 1:12:26
  There is space to move more product at a more
• 1:12:30
  competitive price. And I don't think the majority
• 1:12:34
  of brewers would complain at all if they could
• 1:12:36
  start moving more beer. We want to move more
• 1:12:39
  beer, but we have to think about margin. I think
• 1:12:42
  that's another place that beer has, you know,
• 1:12:44
  I go back to the barrelage, like we focus on
• 1:12:46
  barrelage for so long. Barrelage is great, but
• 1:12:50
  you have to be profitable. Yeah, that's what
• 1:12:52
  I'm saying is that I think that if they took
• 1:12:54
  a smaller margin. even if it just trickled down
• 1:12:57
  through the, and there's a bit smaller margin,
• 1:13:00
  people would be happy, but you can't take, you
• 1:13:03
  can't just hack out all of it or 50 % of the
• 1:13:06
  margin. It won't work. It's hard out there for.
• 1:13:10
  Yeah. These maturing markets. I liked it when
• 1:13:12
  we were not a mature market and there was just,
• 1:13:14
  you know, all this growth and everybody loved
• 1:13:16
  us and we're all friends. Hey, we're still friends
• 1:13:19
  and we love you. Well, we're still friends with
• 1:13:20
  here, but you know, I'm saying like in the craft
• 1:13:22
  world, like, you know, when it was a maturing
• 1:13:25
  market you know it was just nothing but upside
• 1:13:27
  but but i actually think that's why i think from
• 1:13:29
  figuring out the acreage and finding stability
• 1:13:32
  is going to be a lot easier because we're not
• 1:13:34
  going to go through another boom cycle anytime
• 1:13:35
  soon right i think if we're 13 and a half share
• 1:13:38
  as craft i mean we might jump up to 13 .7 or
• 1:13:44
  something but like it's gonna be pretty steady
• 1:13:46
  hopefully growth but it's it's about where that
• 1:13:50
  share is gonna be there was so much back and
• 1:13:53
  forth with like the BA numbers and probably what
• 1:13:55
  the growers were looking at, you know, hop USA
• 1:13:57
  and thinking about acreage that, you know, it
• 1:14:00
  was like, well, they're going to get to 20. We
• 1:14:02
  need to be ready for it. I remember at the bend
• 1:14:04
  hop convention, they were like, we're on our
• 1:14:06
  way to 20%. Yeah. And they're all making IPAs
• 1:14:11
  at five pounds per, we're going to need a lot
• 1:14:12
  of acres. And simultaneously at that same convention,
• 1:14:17
  when they said that, they also said we have too
• 1:14:19
  many hops in the ground. This is like in 2016
• 1:14:21
  or something. Yeah. I mean, I've only been to
• 1:14:23
  the convention like four times, but I feel like
• 1:14:25
  maybe five. But it's amazing how they can say
• 1:14:28
  the same thing every year, but nothing changes.
• 1:14:34
  I mean, the same thing happens at CBC. I'm not
• 1:14:37
  like calling out the Hopker or by any means,
• 1:14:40
  but I've been to them enough where it's like
• 1:14:42
  the message is kind of the same each time. We
• 1:14:45
  kind of keep doing the same thing. I don't know.
• 1:14:48
  Brewers are. Kind of just inherently bad communicators
• 1:14:50
  maybe too? I wouldn't say it's just the brewers.
• 1:14:54
  The entire supply chain is kind of a poor communicator.
• 1:14:57
  Yeah. Well, I think it's a bunch of folks that
• 1:15:01
  the reason they started doing this or have continued
• 1:15:04
  to do it is because they think they have a way
• 1:15:06
  to do it that's better than someone else. I mean,
• 1:15:09
  that's the only way you start a brewery or continue
• 1:15:12
  to run a hop farm. You're not doing it because
• 1:15:15
  you just like... Yeah, I'm pretty good just getting
• 1:15:18
  by, and my neighbor's growing more than me, but
• 1:15:21
  that's fine. I'm okay with that. I am actually
• 1:15:27
  perfectly okay with that, by the way. Yeah, until
• 1:15:31
  you get a couple margaritas in you, and then...
• 1:15:33
  That's a good point. You know, I like Mike after
• 1:15:38
  a few drinks. Oh, he's the best. Then the creative
• 1:15:41
  juices start flowing. I mean, there's already
• 1:15:43
  creative juices, but that's like... We could
• 1:15:45
  tease this out, but we might be doing... Part
• 1:15:47
  two to this podcast? Part two to this. We're
• 1:15:50
  going to be doing a little backyard grilling
• 1:15:53
  and poolside chat. Yeah, I think we're going
• 1:15:56
  to try and do part two. We're going to do some
• 1:15:58
  mobile podcasting and drinking at poolside selection.
• 1:16:03
  Yeah, we do a unique selection process with Roy
• 1:16:06
  Farms. I wish other growers and merchants would
• 1:16:09
  adopt this, but... And we just, you know, they
• 1:16:12
  bring the cores over to us and sit by the pool
• 1:16:14
  and select them there. It's great. That sounds
• 1:16:18
  way fancier than how it started. Man, what else
• 1:16:23
  can we bring over? Well, we're going to be looking
• 1:16:26
  at some Azaka. Oh, yeah, that's right. Yeah.
• 1:16:29
  You want to talk Azaka? Azaka has been a topic
• 1:16:32
  of the pod for a minute, and we used to be a
• 1:16:35
  big Azaka user. Yeah. But it's a great hop. And
• 1:16:39
  actually, we talk about, we go back to what we're
• 1:16:42
  looking for, varieties and, like, choice or,
• 1:16:45
  you know, like, all the components of, like,
• 1:16:48
  the proprietary versus public or just options
• 1:16:51
  out there. Like, it's a hop that we use very
• 1:16:55
  successfully for a number of years. And, you
• 1:16:58
  know, we would love to integrate back in because
• 1:17:00
  it's grown in the Pac Northwest versus maybe
• 1:17:02
  grown, you know, on the other side of the world.
• 1:17:07
  the agronomics on it and getting it figured out
• 1:17:10
  so it's consistent. And I think that's like we
• 1:17:12
  as brewers, that consistency year over year is
• 1:17:15
  so important, like when it becomes a workhorse
• 1:17:17
  hop. Yep. So I think it's a really cool project
• 1:17:19
  that you guys have, you know, dedicated yourself
• 1:17:21
  to this year to really get that dialed in. Yeah,
• 1:17:24
  thanks. I mean, that's where, you know, some
• 1:17:26
  of these more, I don't know how you want to define
• 1:17:29
  it, but more mature breeding programs that have
• 1:17:33
  been managing multiple growers. quality standards
• 1:17:36
  and consistency over the years have done really
• 1:17:38
  well that we have not just get that consistency
• 1:17:41
  and so yeah one of the things or the feedback
• 1:17:44
  that you gave us was that hey azaka is a really
• 1:17:46
  great hop and when it's on it's on when it's
• 1:17:50
  not it just kind of doesn't deliver in beer the
• 1:17:52
  way that you want it to and so we started looking
• 1:17:57
  at these seasonal i guess you labeled it as seasonal
• 1:18:01
  variations and we need to figure out whether
• 1:18:04
  there are actual seasonal variations or if it
• 1:18:06
  was just kind of a mismanagement of the program
• 1:18:10
  given the fact that the program prior to i would
• 1:18:15
  say this year kind of let people make their own
• 1:18:17
  choices around harvest timing and and how it
• 1:18:21
  got moved in the supply chain and we've taken
• 1:18:23
  on management of that latitude 46 has taken on
• 1:18:26
  management of its varietals and one of the things
• 1:18:29
  we're looking at this year is is getting that
• 1:18:32
  consistency back. It probably never had consistency,
• 1:18:35
  but getting consistency over a Zaka and its other
• 1:18:38
  varietals. And so, yeah, we're pretty excited
• 1:18:40
  about that. I think it'll help quite a bit. One
• 1:18:43
  of the things we've already seen is that, you
• 1:18:45
  know, we need to wait longer than we think on
• 1:18:47
  that hop. Yeah, like make sure it's fully ripened.
• 1:18:50
  Yeah, because you can go into the block and it
• 1:18:52
  can smell great, but it might not actually have
• 1:18:54
  the profile, like the oil profile that we need.
• 1:18:58
  I mean, I think this is like a good example of
• 1:18:59
  that communication aspect between brewer and
• 1:19:02
  grower and having that transparency. I mean,
• 1:19:05
  it's not an easy conversation to have as a brewer,
• 1:19:08
  especially when, you know, you really respect
• 1:19:10
  each other. But hopefully those are the conversations
• 1:19:14
  across the industry that would move the needle
• 1:19:16
  in the direction that helps everybody grow. And
• 1:19:19
  there isn't this like they've stopped contracting
• 1:19:23
  from me, but no real understanding why. I think
• 1:19:26
  that's like one of the difficulties when, if
• 1:19:31
  there is less choices out there or less or more
• 1:19:33
  consolidation or, you know, when I was asking
• 1:19:36
  growers from a hop quality group perspective,
• 1:19:38
  what is the thing that we can do as brewers?
• 1:19:40
  And it was all communication and transparency.
• 1:19:42
  And it's interesting, you know, them saying it
• 1:19:45
  with the merchant being there standing next to
• 1:19:48
  them, but it's still them saying we need the
• 1:19:50
  brewers feedback, like kind of directly. Yeah.
• 1:19:53
  Because I think it gets filtered differently.
• 1:19:55
  Otherwise, you know. Anything you felt like we
• 1:19:58
  didn't cover? No, I think, I mean, I feel like
• 1:20:00
  we kind of zigzagged around everywhere. Yeah.
• 1:20:04
  Pint House Joe, so happy to have you on today.
• 1:20:07
  Any final words for us? No. No, it's been fun
• 1:20:13
  chatting with you guys. I love the podcast and
• 1:20:15
  really fun to get on here and talk ops. It's
• 1:20:18
  been fun being up here for Harvest. It's been
• 1:20:20
  another interesting year. No two years are ever
• 1:20:24
  the same. Cool. Well, thanks, Joe. Thank you,
• 1:20:28
  guys.