Latest / No Dirt No Flowers Podcast / Supply Chain Advocate & Connector / Ft. Pete Mahony

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Supply Chain Advocate & Connector / Ft. Pete Mahony · No Dirt No Flowers Podcast

• 0:00
  And we're back with another new episode of No
• 0:02
  Dirt, No Flowers. Today we welcome the one and
• 0:04
  only Pete Mahoney to the podcast. A true friend
• 0:07
  to the hop grower, Pete discusses his entry into
• 0:10
  the hop industry nearly 40 years ago back in
• 0:12
  Oregon and the good old days of the handshake
• 0:14
  contracts, leading all the way up to the craft
• 0:17
  boom and how it changed the hop industry forever.
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  It's a fun, insightful episode and always great
• 0:21
  to sit down and talk with Pete. Enjoy the pod.
• 0:32
  Yeah, we're recording. Oh, wonderful. Yeah, we're
• 0:35
  sitting with the Pete Mahoney. Has to be one
• 0:40
  of the most, I was going to say, recognized or
• 0:44
  known characters in the hop industry. Individuals
• 0:48
  in the hop industry. Oh, yeah. Would you go as
• 0:51
  far as to say legendary? I would say legendary.
• 0:54
  I could, yeah. Welcome to the show, Pete. Well,
• 0:57
  thank you guys. Yeah, I appreciate the compliments.
• 1:00
  The legendary Pete Mahoney. Yeah, I never thought
• 1:04
  I would achieve that sort of status in this industry.
• 1:08
  In fact, I never thought I'd work in this industry
• 1:12
  as long as I did. Really? Well, I remember when
• 1:16
  I first started in Oregon nearly 40 years ago,
• 1:21
  I... I started out in Hubbard, Oregon. I was
• 1:26
  the hop buyer, and I oversaw the warehouse down
• 1:30
  there and the take -in and so forth. And I thought,
• 1:33
  well, I'll do this for a couple years, and then
• 1:35
  I'll get a real job. And that was for Haas at
• 1:38
  the time? That was Haas at the time, yeah. But
• 1:41
  I never would have thought 40 years later I had
• 1:46
  a full career in the hop industry. It sucks you
• 1:50
  in. It really does, yeah. It gets in your blood,
• 1:52
  as you guys well know. And, you know, I worked
• 1:56
  on a hop farm as a kid for my summer jobs, the
• 2:00
  Coleman family down in, you know, St. Paul, Oregon,
• 2:03
  my hometown. And, yeah, so I did all the usual
• 2:07
  stuff on the hop farm as a kid. And that is one
• 2:10
  thing I'll say that's changed, fortunately. I
• 2:13
  used to have to get up early in the morning and...
• 2:16
  move irrigation pipe in the hop fields and i
• 2:19
  hated that you know you're you're moving 20 foot
• 2:22
  four inch pipe carrying two at a time and weaving
• 2:26
  your way through a hop yard and you got these
• 2:28
  vines just like ripping across your face and
• 2:31
  then in the afternoon it's just humid and hot
• 2:34
  but you have to wear a long sleeve shirt and
• 2:36
  so fortunately they don't irrigate hops that
• 2:38
  way anymore so um that was one nice change now
• 2:41
  they use i'm still surprised that there's as
• 2:44
  much I guess, above ground sprinkler irrigation
• 2:48
  in Oregon as there is. I mean, they're using
• 2:50
  things like big guns. Yeah. On babies usually,
• 2:53
  right? Well, even adults. Like when we went down
• 2:56
  there and did that tour about a year ago, there
• 2:58
  was still overhead sprinklers, big gun type sprinklers.
• 3:03
  But not pipes anymore. I don't know. I haven't
• 3:07
  seen any pipes still. Yeah. I don't think they
• 3:10
  use pipe anymore down there. No. I don't think
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  so. But moving irrigation pipe is. Not easy.
• 3:15
  Yeah. Oh yeah. Oh, especially in those muddy
• 3:17
  fields. Oh yeah. One time I was down there probably
• 3:20
  five or six years ago, my map wasn't working
• 3:23
  and I was talking to Brandon Davidson. For those
• 3:27
  of you that don't know hop farmer down there,
• 3:28
  I was trying to find him. He's out in the field.
• 3:30
  So he sent me a pin. Well, it sent me into, I
• 3:35
  can't, I remember it was a Steiner growers field.
• 3:37
  I can't remember who it was. And I was like,
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  I don't. I didn't know they had a field down
• 3:42
  here. So I started driving around the backside,
• 3:43
  and they had a big gun up on the hill, and I
• 3:47
  got stuck in a bunch of mud down there, and they
• 3:51
  had to come down, like pull a Yakima Chief Ranch's
• 3:54
  employee out of their field full of mud with
• 3:57
  a tractor. Like, oh, geez. We've had to pull
• 4:01
  my dad out of some fields. Really? Yeah. That
• 4:04
  doesn't surprise me. So was the Coleman Ranch,
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  was that all one operation back then? Yeah, it
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  was really more one operation back then. You
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  know, there's Bob Coleman, the grandfather or
• 4:22
  the father to John and Bill. And then so he had
• 4:26
  kind of his own entity. And then John and Bill
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  did. But they all worked together really as one.
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  one farm and it was just down the road from my
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  house on mahoney road and uh my parents still
• 4:37
  live down there but uh yeah i used to hop on
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  my little atc and run down to the shop every
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  morning and hop in a pickup with some guys to
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  go out and move irrigation pipe the story of
• 4:48
  so many of us farmers yeah Got on my motorcycle
• 4:51
  or my four -wheeler and went to work. Yeah, yeah.
• 4:54
  So did you stay doing that through, like, because
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  you went to OSU, right? I did, yeah, yeah. So
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  I did that, you know, for summer jobs through
• 5:01
  high school and college. And then, yeah, right
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  out of Oregon State, then I got the job with
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  Haas down there and did that for, I think, about
• 5:11
  three years. And, yeah, one thing I reflected
• 5:15
  on or remembered was the first purchase of hops
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  that I made. And, you know, I'm still kind of
• 5:21
  a kid, you know, new to the job. And it was some
• 5:24
  spots that I purchased at harvest time. And they
• 5:27
  might have been some little ammets. But it was
• 5:30
  from Steve Coleman. No kidding. But I remember
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  going out to track him down. You know, he's a
• 5:36
  hard guy to get a hold of. And finally found
• 5:38
  him out in some field. And he's the type of guy
• 5:41
  that he just extends his hand, looks you in the
• 5:44
  eye, and you shake on it. And we got a deal.
• 5:49
  I mean, he'd be fine. You don't need any paperwork
• 5:51
  or anything. But, you know, of course, you have
• 5:53
  to follow up with that. But I kind of like that,
• 5:55
  you know, where you just look a guy in the eye
• 5:57
  and shake his hand and you know that's all that's
• 6:01
  needed, you know. I miss those days. Yeah, yeah,
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  I do too. So did you have a connection into the
• 6:08
  hop industry, or was it just kind of proximity?
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  You ended up working on a hop farm? Yeah, my
• 6:13
  family didn't farm. We just lived out in the
• 6:17
  farming area outside of St. Paul. So no connection,
• 6:21
  really. Just John Jr., Coleman, was a good personal
• 6:26
  friend of mine and still is. And so, yeah, it
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  just led to me getting a summer job there on
• 6:32
  their farm. But, yeah, when I was out of school,
• 6:36
  Oregon State, I was, you know, it was before
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  the Internet. And, you know, you're looking in
• 6:42
  the paper for postings of jobs. And, you know,
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  you kind of rely on who you know and connections
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  more. You're not getting on Indeed and stuff
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  like that. That didn't exist back then. But I
• 6:55
  do remember there was a – I heard about it through
• 6:58
  the Coleman service. Anheuser -Busch before ABI,
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  just AB, they were going to – put a kind of a
• 7:05
  field man, field person out here somewhere in,
• 7:08
  you know, Yakima or Oregon. And was that during
• 7:12
  John Reeves? Yes, it was. Yeah. Yeah. Yeah. So
• 7:16
  in fact, I interviewed with John Reeves and Gary
• 7:21
  Wittgenstein, if you remember that name. And
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  I didn't get the job. But they actually hired
• 7:28
  a great guy, Daryl Smith. You guys probably know
• 7:30
  Daryl. And he was way more experienced than me.
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  I'm just a fresh kid out of college, you know.
• 7:36
  But, yeah, so it was the next thing that kind
• 7:39
  of came along was a fellow down in Oregon that
• 7:41
  did the purchasing. Ted and Agnes was his name.
• 7:45
  But he was leaving his position to go take a
• 7:50
  job, I think, in the. financial sector as a stockbroker,
• 7:54
  I think. And then, so there was an opening. And
• 7:58
  so I interviewed for the job. I remember interviewing
• 8:01
  with Henry Barth and ended up getting it. How'd
• 8:07
  that interview go with Henry? Because for those
• 8:09
  of us that know Henry, you know Henry. For, you
• 8:12
  know, the newer people in the industry, Henry
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  was... a unique individual yeah yeah no I was
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  quite intimidated for sure and I don't know I
• 8:24
  don't remember all the details of how that interview
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  went and the questions I just remember being
• 8:28
  shaken in my boots kind of you know because you
• 8:31
  know he you could tell he was German but yeah
• 8:36
  and then you know he'd come out a few times to
• 8:38
  check on things after I had the job and And he
• 8:42
  let you know that he's paying attention to the
• 8:44
  details. You know, Mr. Mahoney, you need to clean
• 8:46
  these hops over in the corner. That doesn't look
• 8:48
  good, you know, and stuff like that. But I thought
• 8:51
  that was great. You know, he comes out and he's
• 8:54
  watching things. He was looking in the eye, shake
• 8:59
  your hand. He was, yeah. That kind of guy. Uh
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  -huh, yep. Definitely more of the old school,
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  old guard kind of guy, yeah. I remember going
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  back to D .C. doing some negotiations between
• 9:12
  our farm and haas and interacting with henry
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  and i was more of an observer than obviously
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  a negotiator at that age but my dad brought me
• 9:21
  along and it was really interesting yeah yeah
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  but in the end you know you'd shake hands and
• 9:26
  you'd go do your thing and there would be paperwork
• 9:30
  that would follow but but it was uh it definitely
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  felt more of that all right we got a deal and
• 9:35
  you can trust me the now where it's like, I don't
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  know, you get on a phone call and you make a
• 9:41
  deal and then quote unquote, and before the paperwork
• 9:46
  comes, it could all fall apart. I used to, when
• 9:52
  I came into it in 2012, started working with
• 9:55
  growers. That's how I like to do it was all right.
• 9:58
  We've got an agreement. I trust you. You trust
• 10:00
  me. Don't give me a reason not to trust you.
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  And I won't give you a reason not to trust me.
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  And then. When it started getting really competitive
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  about eight years later or seven years later.
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  But that's always something that stuck with me,
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  and it's just kind of my nature too. But, you
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  know, this is such a small little industry and
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  how important those relationships are. You know,
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  there's only roughly 70 growers. And, yeah, when
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  you're working within that small of a community,
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  the relationships are huge, and you don't want
• 10:32
  to jeopardize. those relationships and and so
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  to me just just really standing by your values
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  you know having to being honest don't play games
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  you know strong integrity those sort of things
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  you you don't want to stray away from that at
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  all because that that'll come back to bite you
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  and so that I always thought that that was one
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  of the things that allowed me to be fairly successful
• 11:01
  in in my career which was more focused on the
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  grower relationships throughout those 40 years
• 11:07
  yeah so how so you were down there for three
• 11:11
  years well yeah so about three years uh on the
• 11:14
  hop side and then uh in those days um haas had
• 11:18
  diversified into some other areas and they had
• 11:21
  a hazelnut processing plant over in dundee oregon
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  And so I moved actually into that plant for about
• 11:28
  five years as a plant manager and sort of the
• 11:32
  field man as well. Still doing hops? No. So then
• 11:37
  I was only hazelnuts. So I was completely out
• 11:39
  of hops into hazelnuts. But then an opportunity
• 11:44
  with the company came up in Yakima, and I decided
• 11:49
  to take that. I'd been up to Yakima a number
• 11:51
  of times over the years. But it was to move more
• 11:54
  into the production area. And I worked under
• 11:58
  a guy named Jim Stouffer, who was more or less
• 12:03
  like the VP of manufacturing up here in Yakima.
• 12:06
  So I worked under him then for a number of years.
• 12:09
  And that opened up a whole new world that I wasn't
• 12:13
  exposed to before it was hot processing. I just
• 12:16
  knew bales and warehousing and loading them up
• 12:20
  on trucks to either go to Yakima or to... Go
• 12:23
  to a brewer. Keep them from catching on fire.
• 12:25
  Keep them from catching on fire, which we didn't
• 12:27
  always do, unfortunately. So, yeah, so I actually
• 12:33
  did the manufacturing role up here then. Jim
• 12:35
  had retired, and then I took on that position
• 12:38
  and did that for probably 15 -ish years. So what
• 12:41
  year did that start, that position? That would
• 12:44
  have been maybe 94, 95 range, somewhere around
• 12:51
  there, yeah. Wow. What did you study in college
• 12:54
  out of curiosity? Business, yeah. A business
• 12:56
  degree from Oregon State. So go Beavs. They're
• 13:01
  hopefully going to make it to Omaha again. Their
• 13:03
  baseball team is really strong. Oh, yeah. Absolutely.
• 13:07
  Sorry, I didn't mean to interrupt. I was just
• 13:09
  thinking, man. But, you know, back in those days,
• 13:13
  too, when I was first getting into the manufacturing
• 13:16
  area, You know, the products that we had back
• 13:20
  then were far fewer than, you know, what we have
• 13:23
  today. You know, it was predominantly, well,
• 13:27
  the focus was more on extract because back in
• 13:30
  those days probably, what, 80 % of the U .S.
• 13:34
  crop was alpha. You know, it was well before
• 13:37
  this whole craft boom and all these new flavor
• 13:41
  aroma varieties. And when you say extract, you
• 13:44
  just mean basically CO2 extract for bittering.
• 13:47
  Yeah, and actually it was before CO2, it was
• 13:50
  hexane. Oh, that's right. Yeah, so they had a
• 13:55
  hexane plant here. Solvent -based extraction.
• 13:57
  Solvent -based, exactly. And then as the industry
• 14:00
  was moving more towards non -solvent sort of
• 14:05
  based products, so CO2 then became the new standard
• 14:10
  for extraction. Was CO2 extraction cheaper than
• 14:15
  hexane or just? Safer. Safer. It wasn't cheaper.
• 14:22
  Was it more expensive or about the same? I think
• 14:25
  it was comparable, yeah. Maybe a little bit more
• 14:28
  expensive. Certainly the equipment was, you know,
• 14:31
  operating under high pressure. Who put the first
• 14:34
  extract plant in? That's a good question. I'm
• 14:39
  not sure if it was Haas or Steiner. About the
• 14:42
  same time, I would say, though. Okay. In the
• 14:46
  U .S., yeah. And both? Both organizations had
• 14:48
  solvent -based extraction prior to CO2 extraction.
• 14:52
  Okay. Yep. And then there was also an extract
• 14:56
  plant in Sydney, Nebraska. That's right. Is that
• 14:59
  the Pfizer one? That's the Pfizer one. Yeah.
• 15:02
  But, yeah, so focus on extract, but then the
• 15:06
  pellets, you know, it's predominantly, you know,
• 15:09
  type 90 and type 45, and then isopellets came
• 15:13
  into the mix. Things just kind of stayed that
• 15:18
  way for a number of years. So what year did T45s
• 15:21
  come into the picture? Well, I think T45s were
• 15:25
  created back in the 70s. They had been around
• 15:30
  quite a while. And I think there's more interest
• 15:34
  in T45, say, in the 80s, 90s, because these aroma
• 15:42
  varieties didn't have a lot of alpha in them.
• 15:45
  We didn't have these. you know, new varieties
• 15:48
  that are the flavor varieties that are an aroma,
• 15:51
  but they have 12%, 14 % alpha in them. So when
• 15:55
  you have these lower alpha aromas, there was
• 15:58
  more interest in T45 because then you could take
• 16:01
  like a cluster cascade and close to double the
• 16:05
  alpha by concentrating it through the type 45
• 16:07
  process. What's the difference between a T45
• 16:11
  and something like a cryo or a CGX or something
• 16:13
  that's out there, a Lupo Max? Those products
• 16:17
  really are basically built as a T45. Yeah. Which
• 16:23
  is interesting because there's all these new
• 16:24
  brands that have come out around T45 or T45 type,
• 16:29
  but essentially T45 or concentrated pellets has
• 16:32
  been around since the 70s. Yeah, exactly. Just
• 16:37
  process improvement probably on some of those.
• 16:40
  Yeah, exactly. And yield improvement. The level
• 16:47
  of concentration, there's a range there too.
• 16:49
  It's not like a 45 % concentration. It could
• 16:54
  vary. More focus on controlling temperature.
• 17:01
  It's a catch -22. You need heat to pelletize
• 17:05
  for the hop powder to bind, but then you don't
• 17:09
  want too much heat where that starts degrading
• 17:12
  the quality of the hop. So some refinements there
• 17:16
  to deal with that situation. Yeah, interesting.
• 17:21
  Very interesting. So you came in, took the processing
• 17:25
  manufacturing job up here, were exposed to and
• 17:31
  focused on T90, T45, CO2 extraction. Right. Yeah,
• 17:37
  around that time frame is when downstream products
• 17:41
  started to show up. Initially, we're, I'd say,
• 17:46
  more focused on extract -based liquid downstream
• 17:50
  products. Like Tetra. Like Tetra and Roe and
• 17:54
  Ike, you know, further refinements of extract.
• 17:58
  And so, you know, those products then, they provided
• 18:01
  some benefits in brewing, such as light stability
• 18:04
  or foam enhancement, you know, more efficient
• 18:09
  bittering or conversion in the brew kettle and
• 18:13
  so forth. But a lot of liquid -based advanced
• 18:18
  products and not so much new pellet products.
• 18:22
  It was still, you know, this would have been
• 18:24
  like, what, in the early 90s or so. This is also
• 18:27
  still an alpha world. Still an alpha world at
• 18:29
  this point, yeah. Were most of those Ike and
• 18:34
  Tetra, were those developed outside of the hop
• 18:38
  industry or were those developed by Steiner,
• 18:41
  Haas? Or other industries? Where did those come
• 18:46
  from? Yeah, I would say it's a combination of
• 18:50
  that. Early on, I'd say there was some outside
• 18:54
  development, but also there was a lot of focus
• 18:58
  inside as well. The hop dealers were staffing
• 19:02
  up their R &D teams. to develop some of these
• 19:07
  new products but uh but there were some other
• 19:09
  outside companies more flavor oriented companies
• 19:12
  that were working on these sort of products as
• 19:15
  well so it was a combination what's the main
• 19:19
  use for tetra well tetra would be more for both
• 19:25
  light stability but foam enhancement yeah so
• 19:30
  product types are advancing Mostly focused on
• 19:34
  alpha. Mostly focused on alpha at the time. Right.
• 19:38
  I guess jumping forward to craft. So this is
• 19:43
  probably now 2009, 10, 11 range. So how did your
• 19:51
  roles in the company change during that time
• 19:54
  warp? Okay, yeah. So I did the manufacturing
• 19:58
  for maybe 15 years or so. It was at the point
• 20:05
  where Alex Barth was handling the purchasing
• 20:10
  for Haas amongst a number of other things. He
• 20:14
  took over. He took over from Henry von Eichel.
• 20:18
  Henry von Eichel, yeah. Yeah, and became CEO
• 20:20
  of the company. And for clarity of that, he became
• 20:24
  CEO of Haas, and then they had their Barth counterpart
• 20:29
  over in Europe. Right, exactly. which his brother
• 20:34
  was the CEO. Stefan Barth was the CEO of Barth
• 20:36
  in Europe. Alex was CEO of Haas in the US. But
• 20:41
  at that time, then they created this, the new
• 20:44
  position of VP of supply chain and purchasing.
• 20:48
  And that's when they offered that up to me to
• 20:52
  move out of manufacturing into the supply chain
• 20:55
  role. And then the, so a big, big part of my
• 20:59
  focus then became Grower purchasing. Shaking
• 21:05
  growers' hands. Shaking growers' hands again,
• 21:07
  but kind of at a more strategic level, higher
• 21:11
  level, and then working deeply with our positions,
• 21:15
  inventory positions and so forth. And so that
• 21:19
  happened just a little before Kraft. So that
• 21:21
  could have been 2008, 2009, somewhere in that
• 21:26
  timeframe. So as you moved into VP of supply
• 21:30
  chain, looking or spending more time looking
• 21:34
  at inventories and burn rates and things like
• 21:36
  that did you still have your finger on the pulse
• 21:39
  or have involvement in the manufacturing processing
• 21:42
  or did you completely move out of that i i would
• 21:46
  say i completely moved out of manufacturing yeah
• 21:49
  i i was heavily involved in directing the inventory,
• 21:57
  you know, after the crop comes in and selections
• 22:00
  are done and all that, there's a lot of moving
• 22:03
  parts to management of the inventory. So I was
• 22:08
  still heavily involved in kind of orchestrating
• 22:10
  that, but not the actual management of the plants.
• 22:13
  Did you orchestrate Roy Farms' bills being put
• 22:16
  outside the storage facility? Well, that was
• 22:20
  a little bit under my watch. Let's take the lid
• 22:25
  off that and look around. What are we talking
• 22:27
  about here? What was that? That was during the
• 22:31
  volatility of Earth. That was during the time
• 22:37
  where, you know, CTZ bales were moving all over
• 22:41
  the place and we didn't have as strict processing
• 22:44
  guidelines as we do now. things were catching
• 22:48
  on fire sometimes and i believe if i remember
• 22:52
  right correct if i'm wrong it's after we built
• 22:54
  this new cooling room and we're piling making
• 22:59
  big piles of hops which is common practice now
• 23:02
  but at the time with the um i guess you could
• 23:06
  say kind of you know evolving processing parameters
• 23:10
  and the ctz itself and and then learning how
• 23:16
  to handle these big piles of hops we had some
• 23:19
  variability in our bales being delivered to haas
• 23:22
  is that do you think that's accurate i'd say
• 23:24
  that's accurate and then i don't know continue
• 23:29
  i don't i can't remember how it got to where
• 23:31
  like basically our bales had to go sit outside
• 23:33
  the warehouse for some period of time to make
• 23:35
  sure they didn't catch on fire before they went
• 23:37
  into the warehouse did they Yeah, they did. But
• 23:44
  if I recall correctly, that might have been,
• 23:48
  we had a couple fires back to back, and I think
• 23:51
  that was like 99 in 2000. And so I guess it was
• 23:57
  when I was more in the manufacturing role. The
• 23:58
  fires were right there in 2000. Yeah, they were.
• 24:03
  That was a big problem, of course. Not just with
• 24:06
  us. No, no, no. Yeah. Not just with you guys.
• 24:09
  I'm just saying as an industry. And whenever
• 24:12
  you have a warehouse burned down, that's a bad
• 24:14
  thing for the owner of the warehouse and the
• 24:17
  hops, but also the industry in general. We don't
• 24:22
  want anybody to have fires in this industry.
• 24:24
  It's too small. And then from an insurability
• 24:27
  standpoint, that gets to be... very problematic
• 24:30
  as well. And that spreads across the industry.
• 24:32
  Like if there's a fire in the supply chain, those
• 24:35
  insurance premiums ripple through the entire
• 24:38
  industry. Yeah. Yeah. So, so when we have those
• 24:41
  fires, you know, yeah, they're, they're, you
• 24:43
  know, we're kind of scrambling to figure out
• 24:46
  what are the next moves to make here to, to make
• 24:48
  sure that doesn't happen. And, and back to the
• 24:51
  Roy Farms bails, we, you know, we, we were probably
• 24:54
  overreacting. It was just, Whatever, you know,
• 24:58
  let's just set those outside and mitigate any
• 25:02
  risk that we think we may have until we understand
• 25:05
  things a little more clearly and do a deeper
• 25:08
  dive into things. I mean, also, in all fairness,
• 25:12
  you know, we're learning how to deal with these
• 25:14
  big piles. And one thing that we learned, which
• 25:16
  has become, I guess, more of an industry standard
• 25:20
  now, is blowing air up through the piles. If
• 25:24
  you get an unstable kill dumped in those piles,
• 25:27
  you can alleviate the breakdown of those hops
• 25:32
  by moving air through the piles, which we took
• 25:35
  from the potato industry. Because I remember
• 25:37
  one of the first things that I was involved in
• 25:40
  when I came back to the ranch full -time was
• 25:41
  drying in the kiln and then handling the hops
• 25:44
  through baling. And we weren't doing a whole
• 25:48
  lot of pelletizing at the time. It was mostly
• 25:49
  baling. And I remember just... having to rip
• 25:53
  open multiple piles with a backhoe, physically
• 25:55
  rip them open with a backhoe to break them apart
• 25:59
  before they would catch on fire. So you mean
• 26:03
  the fires that are going on around the ranch
• 26:04
  with hops is not a new thing? No. No, but now
• 26:11
  we seem to have isolated it to the compost pile.
• 26:14
  It just happens in the compost pile. Spot fire
• 26:19
  this last weekend near our compost pile. Once
• 26:23
  again, which is for about the fourth time we've
• 26:25
  learned that you don't want to take old hop pellets
• 26:28
  or bales that you're disposing of and throw them
• 26:32
  next to the compost pile. Green hops and brown
• 26:36
  hops don't mix very well. Nope. Anyway. The other
• 26:41
  thing I was going to say that really changed
• 26:43
  the landscape of the industry, as we got into
• 26:47
  craft, And as it relates more to the role that
• 26:50
  I had was the, obviously craft just completely
• 26:53
  changed the hop landscape. But it was the proliferation
• 26:57
  of all these new varieties. And, you know, so,
• 26:59
  you know, half of my career was a few high alpha
• 27:04
  varieties and a handful of aromas. And that didn't
• 27:07
  change much. Which aromas? Willamette? Willamette.
• 27:10
  There would have been Cascade, a little bit of
• 27:13
  Cascade. as much as, you know, we see nowadays.
• 27:16
  Fuggle. Oh, yeah. Oh, cluster probably. Cluster,
• 27:20
  right, yeah. But there's, I'm sure, a few more
• 27:23
  I'm forgetting. But, yeah, the variety mix didn't
• 27:27
  really change much, and the way you handle them,
• 27:29
  pretty straightforward. But here comes all these
• 27:31
  new varieties now with craft, and a lot of them
• 27:36
  being proprietary varieties, which that greatly
• 27:39
  changed the way that we purchased hops, because
• 27:42
  when you... when you throw proprietary varieties
• 27:45
  into the mix, it's not really the commodity sort
• 27:49
  of space anymore. You can't just go out and buy
• 27:52
  spots. You can't buy them on the open market,
• 27:56
  kind of timing the market or whatever. And that
• 27:59
  was a game at the time. That was the game. That
• 28:00
  was the game, yeah. It was much more of a trading
• 28:02
  commodity game for a few decades. And then, as
• 28:09
  I said, the proprietary varieties became about...
• 28:12
  65 % of the acreage out there. So, so all of
• 28:17
  a sudden, you know, you have pushing three quarters
• 28:19
  of re -acreage is not gameable. You know, it's,
• 28:23
  it's varieties you have to contract in say the
• 28:27
  winter months before the growing season, you
• 28:30
  got to make those decisions well in advance of
• 28:32
  growing the crop or otherwise they're just not
• 28:35
  going to be there. And that was challenging.
• 28:38
  It still is today. It still is challenging. Apparently.
• 28:41
  Yeah, exactly. And because, you know, December,
• 28:44
  January, do you have a crystal clear ball picture
• 28:49
  on what your true demand is for that coming crop
• 28:51
  for those proprietary varieties? And, you know,
• 28:55
  in this sort of market, you just don't. You know,
• 28:57
  the brewers struggle with, you know, we're not
• 28:59
  sure how much of that we're really going to need
• 29:00
  in the end. And so you do what you can to. anchor
• 29:04
  down on on some numbers and that's what's going
• 29:07
  to be grown and then uh then i'd say as the crop
• 29:12
  comes in what changed you know back in the day
• 29:15
  we we did a little hop selection you know in
• 29:18
  in the alpha markets and uh although the guys
• 29:21
  that would come to do selection on alpha varieties
• 29:24
  you know we just knew that they they picked the
• 29:27
  highest alpha lots because they were buying pounds
• 29:29
  of hops of course they they want the most alpha
• 29:31
  in them but it wasn't focused on flavor as it
• 29:34
  is now. What did that look like? They're literally
• 29:37
  coming into a conference room and you're giving
• 29:39
  them a spreadsheet and they're saying, yeah,
• 29:42
  we'll take those ones. Yep, pretty much. When
• 29:45
  did it change from buying pounds to pounds of
• 29:48
  alpha? Or kilograms of alpha? Yeah, that's a
• 29:52
  good question. I don't know. That might have
• 29:56
  been 15, 20 years ago. You know, 15 years ago,
• 30:02
  I'm guessing, that we started buying alpha varieties
• 30:06
  on a dollar per pound of alpha basis and selling
• 30:09
  on a KGA basis. Yeah. Yeah. Makes a lot more
• 30:13
  sense. Exactly. Because I remember my earlier
• 30:18
  days in the industry, once again, being more
• 30:20
  of an observer, but observing all these contract
• 30:23
  negotiations and contracts, and there is this
• 30:26
  constant flip -flopping between. pounds of alpha
• 30:30
  and kilograms of alpha and like loss calculations
• 30:33
  and methods of analysis methods of analysis because
• 30:37
  sometimes and maybe this was more because we're
• 30:41
  going brewer direct on some of those contracts
• 30:44
  international contracts that we're converting
• 30:46
  back from a kilogram alpha sale yeah and then
• 30:51
  depending on who you're having the conversation
• 30:52
  with because we would have these brewer direct
• 30:56
  contracts and then we would toll process through
• 30:58
  haas and you know we would be it was hard to
• 31:02
  keep it straight sometimes we're talking pounds
• 31:04
  of alpha sometimes we're talking kilograms of
• 31:06
  alpha what was the contract in what was the tolling
• 31:08
  contract in yeah and and i even like said the
• 31:12
  the method of analysis you know spectra was always
• 31:15
  kind of the standby and then you you have hplc
• 31:18
  now and a few others but but Spectro to HPLC
• 31:22
  could swing the alpha by 10%. We learned that
• 31:26
  the hard way. So yeah, you got to pay attention
• 31:30
  to that method of analysis for sure. Because
• 31:32
  when you have slim margins already and it's like,
• 31:35
  dang it. I didn't realize I sold that on HPLC.
• 31:38
  I thought it was Spectro. But yeah, back to hop
• 31:44
  selection. The other thing that was kind of different,
• 31:47
  like you said, Drew, The brewers that would come
• 31:51
  to do selection, they'd see all these lots on
• 31:54
  the table, and the lot numbers were more of an
• 31:59
  internal lot number. The brewer didn't know the
• 32:02
  grower lot number. Oh, really? They didn't even
• 32:04
  really know the grower, and frankly, I don't
• 32:06
  think they really cared. They were just buying
• 32:08
  hops from a dealer. And show me your hops you
• 32:11
  have on the table. Well, we might have had those
• 32:13
  hops coming from... 10 different growers. But
• 32:16
  that was another change that Kraft brought was
• 32:20
  much more transparency in that whole process
• 32:23
  where Kraft wanted to know, well, whose hops
• 32:25
  are those and what farm did they come from? And
• 32:27
  I want to go out and meet that grower and I want
• 32:29
  to go look at his farm. And so now the lots that,
• 32:34
  you know, the way we lot the samples for selection,
• 32:37
  I mean, it has all the grower numbers on and
• 32:39
  the brewers all know who the growers are. And
• 32:41
  I want to see some more from Roy Farms on the
• 32:43
  table. Naturally. Yeah. Of course. So yeah, it
• 32:49
  really became much more transparent. But I have
• 32:53
  to admit, from an inventory management standpoint,
• 32:55
  more challenging by far. And really, a hop selection
• 33:00
  for a contract, it has to be a discrete production
• 33:05
  run as well. So alpha, you can just run these
• 33:09
  large... alpha runs and it's just extract coming
• 33:12
  out the back end. And, uh, but, but when you
• 33:16
  have aroma varieties being selected individually
• 33:18
  by, by each brewer and you know, that has to
• 33:21
  be a separate discrete production run. And so
• 33:24
  it creates more challenges than in your processing
• 33:26
  plants and have met less efficiencies then because
• 33:30
  of that changing over and so forth. But that's
• 33:33
  just the nature of it. So how'd that work? From
• 33:38
  a merchant's perspective or from your perspective
• 33:40
  when ABI, as an example, was buying direct from
• 33:45
  growers. Because they obviously had more insight
• 33:51
  into who they're buying from and probably had
• 33:54
  an opinion on that. And then that, maybe not
• 33:58
  directly led into, but I remember when we were
• 34:01
  dealing with other large breweries direct, Anheuser
• 34:06
  -Busch had a... you know a very i would say robust
• 34:09
  or intentional grower direct portion of their
• 34:13
  business and still do still have a grower direct
• 34:16
  portion but then there's other large breweries
• 34:19
  that that we're dealing with at the time and
• 34:22
  i think that was a little bit unique at the time
• 34:24
  from your perspective was that was the grower
• 34:30
  um why was the grower kind of pursued in more
• 34:37
  of a direct way outside of going through the
• 34:39
  merchants? Was it strictly cost or was there
• 34:43
  more than that? Yeah, I mean, it would just be
• 34:47
  my opinion on that. I never really heard any
• 34:51
  comments on that from brewers. But I would say
• 34:54
  certainly for a number of brewers, cost, you
• 35:01
  know, they would feel. A better price on the
• 35:07
  raw hop on the bales could be obtained by buying
• 35:12
  direct from the grower. And then you reach out
• 35:15
  to a hop dealer to do a tolling, a processing
• 35:19
  arrangement to get those hops converted. And
• 35:22
  yeah, I'd say from an economic standpoint that
• 35:26
  that was probably the lowest cost approach to
• 35:29
  take as opposed to just buying the... finished
• 35:34
  product from a dealer. But there's pros and cons
• 35:38
  of that whole thing. There is, yeah, there is.
• 35:40
  So, yeah, and I think one of the pros to buying
• 35:47
  from the dealer network is you have a broader
• 35:50
  selection then, you know, when you're buying
• 35:52
  directly from a grower, maybe they have a problem
• 35:55
  one year and I'm not so wild about those hops.
• 35:57
  Well, that's what I grew. And it was easier to
• 36:01
  do it from... my perspective it was easier to
• 36:04
  do it um to some degree back when it was just
• 36:08
  alpha because it's like you're producing a spec
• 36:10
  yeah exactly more than more than you know a spec
• 36:14
  plus nuance yeah and the the the nuance is you
• 36:19
  know that's a challenging thing to to address
• 36:23
  with the brewer there's there's so many different
• 36:25
  subjective views on on the aroma the flavor and
• 36:31
  which kind of gets back into what you're talking
• 36:32
  about was selection and how that had that was
• 36:35
  changing where you did a little bit of selection
• 36:37
  prior and now you're doing this new selection
• 36:41
  process which i can't even imagine i mean we
• 36:45
  see it in a microcosm on our farm but that with
• 36:50
  that many customers coming through it's got to
• 36:52
  be challenging yeah it is for sure and And sometimes
• 36:56
  what you throw on the table, they're maybe still
• 37:00
  looking for something a little different. Hey,
• 37:02
  can you throw, you got some Oregon lots I can
• 37:05
  look at. We hear the aromas are good this year
• 37:07
  out of Oregon or Idaho or whatever, or even some
• 37:10
  specific growers. And so it's quite the juggling
• 37:14
  that has to be done to deal with that. So then
• 37:17
  how involved in that were you? VP of supply chain
• 37:22
  management. Yeah. So I, I, uh, wasn't directly
• 37:26
  involved in the process with the, the brewer,
• 37:31
  my team was, but I, at a high level was accountable
• 37:35
  for that process. So, um, but, but, you know,
• 37:40
  we, we really valued the feedback that we were
• 37:42
  getting from the, the brewers, the, you know,
• 37:45
  even through our sales team that, uh, you know,
• 37:48
  we, we, would would follow up on requests from
• 37:53
  brewers say next year can you add a few more
• 37:55
  from this region or that region of that of a
• 37:59
  certain variety or we'd like to see a few from
• 38:02
  this grower and that grower so so that would
• 38:04
  even guide a little bit of my purchasing for
• 38:07
  the next year that you know i'm going to add
• 38:09
  a little more from that farm of centennials or
• 38:12
  whatever and a little more from oregon or idaho
• 38:14
  and and to try to meet that brewer's needs you
• 38:18
  know for the coming year so So it was fairly
• 38:21
  dynamic, but we valued that sort of input. But,
• 38:24
  yeah, I wasn't the one in the selection room
• 38:27
  always. I did value walking in at times for key
• 38:30
  brewers just to kind of watch the process, hear
• 38:32
  the comments, and, you know, just to kind of
• 38:37
  get some direct feedback myself from some of
• 38:39
  the bigger guys. Something. Well, you know, at
• 38:45
  the peak we were getting a couple hundred coming
• 38:47
  in, so there's just. I couldn't attend all of
• 38:50
  those, but it was kind of where I could. Something
• 38:54
  I've always wondered, because, you know, when
• 38:57
  I was with Yakima Chief Ranches, my focus was
• 39:00
  all on proprietary ops. And so we were focused
• 39:03
  just keenly on harvest date, how everything was
• 39:06
  picked, quality. We brought it all in and focused
• 39:09
  on making sure everything was consistent, high
• 39:13
  quality. And then coming to Roy's, very little
• 39:16
  of our... hops that are not grown that are not
• 39:22
  proprietary hops we grow for chief or haws very
• 39:25
  few of the other varieties actually go to a merchant
• 39:28
  but i've always wondered if there's growers that
• 39:33
  are selling direct public varieties specifically
• 39:38
  and they're delivering to merchants doesn't does
• 39:44
  that mean the merchants often are getting stuff
• 39:48
  that's already been looked through by brewers
• 39:50
  by the time they they get to the merchant and
• 39:54
  so there's less less selection i mean i have
• 39:58
  no idea i've just always wondered this how did
• 40:01
  or were you able to go and say we want to pick
• 40:04
  which cascade lots we're getting from you grower
• 40:07
  x or y or yeah that that's a gray area for sure
• 40:12
  um You know, some of the, even though they're
• 40:16
  publics, you know, some growers would have, you
• 40:20
  know, a specific field, you know, sold to a brewer
• 40:24
  or a merchant. But in other cases, you know,
• 40:31
  it just all comes in. And I have to say, I don't
• 40:34
  know exactly how some of the growers are determining
• 40:37
  up front. You know, I want these lots to, you
• 40:40
  know, we might have been storing the hops. for
• 40:44
  that grower, for his direct deal. But the grower
• 40:47
  would be the ones at time of delivery to tell
• 40:50
  us, you know, these lots are going to my brewer
• 40:53
  contract and these lots are going to go to your
• 40:56
  contract, the dealer contract. So the grower
• 40:59
  was really, for the most part, dictating that
• 41:03
  at time of delivery. Again, a few cases I know
• 41:07
  we would have specific fields purchased, but...
• 41:12
  That's happened here and there, but do you feel
• 41:16
  like that's still a way of purchasing? I mean,
• 41:21
  on the publics and, I guess, non -proprietary
• 41:26
  varieties in general. Because we've had that
• 41:29
  either by a brewer or by a merchant in the past,
• 41:31
  but it's been very hit or miss in terms of that's
• 41:35
  how they're contracting. I guess the question
• 41:39
  is, is that still... Is that still a way to contract
• 41:44
  these days? Oh, because you used to see fields
• 41:48
  that you would drive by fields. This was more
• 41:50
  common like 10 years ago. You would see fields
• 41:53
  that were like proud. This field is growing for,
• 41:56
  you know, Sierra Nevada or New Belgium. Sierra
• 42:00
  Nevada is a really good example. I mean, there's
• 42:03
  a couple cases where they're like, we want that
• 42:05
  field. We never had a sign out in front of it.
• 42:08
  But I think Rich Van Horn down the street had
• 42:10
  either a New Belgium or a Sierra sign. And then
• 42:13
  you'd see him in Oregon, too. I know Coleman's,
• 42:15
  I think, had him. But I don't know if I see that
• 42:18
  anymore. But then I don't ever remember doing
• 42:24
  a field -specific contract with a merchant. Unless
• 42:29
  it's proprietary. Unless it's proprietary. Yeah.
• 42:33
  We've done some of that with Publix, but it's
• 42:36
  not the norm for sure. Was that because there
• 42:39
  was something unique about it, or is that just
• 42:41
  more of a defensive move that you will make sure
• 42:43
  that you didn't get just the leftovers? I would
• 42:47
  say it was more unique about it. You know, when
• 42:52
  the contract was made, maybe multiple fields
• 42:56
  were available, and we kind of liked that one.
• 42:59
  We knew some history on that one field. But again,
• 43:05
  it wasn't the norm. It was a special mix of virus
• 43:07
  and non -virus cascade block. Yeah, it could
• 43:10
  have been. You know, that little virus adds a
• 43:15
  little spice. Yeah. So I was just thinking about
• 43:21
  more so macro numbers, higher level view of things.
• 43:27
  You know, I think it was around the last. Big
• 43:33
  alpha market. We came out of that with a pretty
• 43:37
  sharp drop into a bear market. That was around
• 43:41
  2009 and 10. And in 2011 then in modern times,
• 43:48
  you know, that was kind of the low point of acreage.
• 43:50
  So we were in the northwest around 30 ,000 acres
• 43:54
  in 2011. And still probably a high percentage
• 44:00
  of that being alpha. And then this crop market
• 44:03
  comes along just at the perfect time. So 30 ,000
• 44:09
  acres from 2011 in 10 years' time to 21, we doubled.
• 44:17
  That's crazy. That's really, I'd say, the biggest.
• 44:22
  impact, you know, on this, this hop industry
• 44:25
  that Kraft had doubling the acreage in just a
• 44:28
  10 year period. Now, maybe at the end of that
• 44:30
  10 year period, we didn't quite need all of that,
• 44:32
  but, but that got us to, you know, nearly 116
• 44:35
  million pounds and about a little over 60, 61
• 44:38
  ,000 acres, you know, somewhere in the process
• 44:43
  there or that timeframe, you know, the U S then
• 44:45
  became the largest producing country over or
• 44:48
  surpassed Germany for a few years there. And,
• 44:51
  uh, But that doubling of acreage really didn't
• 44:55
  bring on too many new growers. You know, there
• 44:58
  might have been a couple in the mix there. But
• 45:00
  the point is, you know, that the existing grower
• 45:03
  base, the 70 growers, made massive investments,
• 45:08
  you know, to double that acreage. We've never
• 45:11
  had 60 ,000 acres before. You know, all that
• 45:14
  infrastructure expansion was needed. So, you
• 45:17
  know, tremendous investment in the industry.
• 45:19
  Would we figure that... like the total investment
• 45:22
  in the industry was to get from 30 to 60. oh
• 45:27
  it had to have been north of a billion really
• 45:31
  if you think oh gosh yeah because it's not just
• 45:34
  the it's not just land trellis and picking machines
• 45:37
  it's extract plants pellet plants it's warehouse
• 45:44
  space all over the place i mean yeah i'd say
• 45:49
  it's north of a billion i did in like 20 i'd
• 45:56
  have to go back and look but something like 2016
• 45:57
  i was writing an article for about investment
• 46:00
  grower reinvestment you know for the program
• 46:02
  we were running and i legitimately randomly sampled
• 46:07
  like just grabbed our list of growers and did
• 46:11
  like a random sort seven growers and it was something
• 46:17
  like just those seven alone it was something
• 46:20
  like 120 million dollars or something it was
• 46:25
  huge well and then how do you calculate or include
• 46:32
  all these changeovers that we've had to try and
• 46:35
  meet the market on the rise and the drop i mean
• 46:37
  at one point i did the math across our farm and
• 46:41
  i don't know what the number was it was disgusting
• 46:45
  like 20 million dollars or something like that
• 46:48
  over the 10 year run and trying to chase market
• 46:52
  demand and just in like replanting and then replanting
• 46:57
  again yeah yeah because back in those earlier
• 47:00
  days pre -craft even back in my early days uh
• 47:06
  some of these fields were 20 year old fields
• 47:11
  you know they you just change them out and that
• 47:14
  doesn't happen nowadays No. Coleman's had that
• 47:17
  Willamette field down on the river bottom there.
• 47:20
  Yeah. That I think was like 55 years old. They
• 47:24
  took it out a couple of years ago. Could be,
• 47:25
  yeah. Yeah. Still produced well at the end. No,
• 47:28
  I mean, I think that's a, I don't know. I don't
• 47:31
  know if that's completely understood. I mean,
• 47:33
  some varieties probably need more of a refresh
• 47:36
  than others. But generally speaking, I think
• 47:39
  that these hop varieties can go a lot longer
• 47:41
  with the proper. farming practices than than
• 47:45
  they are but a lot of them will never get the
• 47:49
  chance to see that that yeah exactly change it
• 47:51
  out you got to change it out because the market's
• 47:53
  up down yeah sideways yeah yeah and one one little
• 47:58
  tangent was so during this big run -up we didn't
• 48:02
  know if the the u .s the northwest industry was
• 48:05
  going to be able to keep up with this rising
• 48:06
  demand and so you know that's time when you started
• 48:10
  seeing more more uh hop farms outside of the
• 48:13
  michigan probably being one of the biggest exactly
• 48:16
  michigan so um so again we really didn't know
• 48:20
  if we'd have to start supplementing from outside
• 48:23
  the northwest so we started looking at some of
• 48:25
  that uh and i would say mainly michigan yeah
• 48:28
  and good stuff being grown but it was just a
• 48:32
  little different and so so it wasn't easy to
• 48:36
  just kind of say pick up from Michigan or another
• 48:42
  state and add that into the mix. You had to get
• 48:46
  brewers to do trials with that. We viewed them
• 48:52
  as separate distinct varieties, not just Cascade,
• 48:57
  but it's Michigan Cascade versus Northwest Cascade.
• 49:01
  So in the end, as the Northwest growers were
• 49:04
  able to expand make that massive investment,
• 49:10
  um, we, we recognized that, well, we, we, it's
• 49:13
  just easier to stay within our lane here and,
• 49:17
  and wheelhouse in the Northwest and, and not
• 49:20
  be kind of adding new varieties, let's say into
• 49:23
  the mix by buying outside of the Northwest. So
• 49:25
  we, we really didn't pursue that. And I, I know
• 49:27
  now as the market's correcting, um, you know,
• 49:30
  as we're last year, we were down to like 42 ,000
• 49:34
  acres in the Northwest, you know, the number
• 49:35
  of the Non -Northwest growers are not there anymore,
• 49:40
  and we kind of figured that might be the way
• 49:42
  it would go. Which has happened before. I mean,
• 49:44
  you know, hops have been grown in a lot of different
• 49:47
  regions, and whenever there's a market contraction,
• 49:51
  it comes back to the Pacific Northwest. Right.
• 49:54
  That was a strange phenomenon, the big expansion
• 50:01
  that brought in, you know, like you said, just
• 50:03
  a handful of growers in the Northwest. Meaningful
• 50:06
  acreage. I mean, maybe 3 ,000, 4 ,000 acres of
• 50:09
  new growers. And then there were a handful of
• 50:13
  growers that were either getting out of hops
• 50:17
  or just had a tiny bit that decided to invest
• 50:20
  in it. But a lot of the kind of the generational
• 50:23
  more established farms sat back through the growth
• 50:29
  until kind of the 2018, 2019 started expanding.
• 50:35
  you know they'd seen just coming fresh out of
• 50:37
  the collapse out of the alpha deal they didn't
• 50:39
  want to watch craft collapse and so they wouldn't
• 50:42
  spend the money and put it in until they you
• 50:46
  know jesus grew again and grew again and then
• 50:48
  i've often wondered if people would have said
• 50:53
  yeah we are going to support that growth would
• 50:58
  we have overshot as much as we did because you
• 51:02
  would have been You would have got the growth
• 51:04
  earlier to keep up, so we wouldn't always be
• 51:06
  chasing, chasing, chasing. Because the market
• 51:10
  was just always under -contracted from a brewer
• 51:15
  standpoint, so we were always chasing it. And
• 51:17
  then finally, when the growth stopped, I mean,
• 51:20
  it was two years before everybody realized that
• 51:24
  we didn't need it because we were still backfilling
• 51:27
  everything. Babies and... It's kind of wild.
• 51:32
  Yeah, it is hard to put the brakes on timely.
• 51:36
  Although I do think the proprietaries helped
• 51:39
  that. If the 62 ,000, 61 ,000 acres was all public,
• 51:45
  it might have taken another couple years to slow
• 51:49
  that train down. It would have been uglier. It
• 51:52
  would have been uglier for sure, yeah. But the
• 51:55
  owners of the proprietaries, we had full control
• 51:58
  over. the supply. And once we started getting
• 52:02
  some clarity on, wow, we got way too much, you
• 52:04
  know, that that's the owner decides then the
• 52:07
  owner of the variety, we're not growing that
• 52:09
  next year. Uh, whereas a public, maybe the grower
• 52:13
  still wants to roll the dice and keep it in for
• 52:15
  another year or two. Oh, growers love rolling
• 52:19
  the dice. Oh yeah. Yeah. Cause they grow hops.
• 52:23
  Cause they grow hops. That's interesting too,
• 52:26
  to watch, you know, it's clear on, Les always
• 52:30
  says the cure for low prices is low prices. But
• 52:34
  when you have, you know... Old Les Roy. Yeah.
• 52:37
  You have proprietary owners, and there's, you
• 52:41
  know, 10, 12 of them. Some of them partnered
• 52:44
  with other companies, you know, HBC being one
• 52:47
  of them, where, you know, each company has to
• 52:51
  make their own decisions. It's not like the owner
• 52:54
  of a Zaka can go, like, Latitude 46 can't go
• 52:58
  to... and start comparing notes on things or
• 53:02
  anything like that. You can't have those discussions.
• 53:05
  But kind of interesting how everybody seemingly
• 53:08
  ran into the same conclusion at the same time
• 53:11
  and pulled the brakes back. But it was still
• 53:15
  too late. But it has corrected quickly. Yeah,
• 53:21
  that definitely shows in the USDA hop stocks
• 53:23
  report. It's trending nicely downward. inventory
• 53:28
  but um yeah so yeah what is a good inventory
• 53:32
  number from a prior vp of supply chain in today's
• 53:40
  percentage wise not percentage wise yeah um percent
• 53:45
  of the total crop well i don't know i mean like
• 53:49
  right now what are we i mean this was all public
• 53:51
  information at the hop convention we were Stock
• 53:55
  reports are currently at, what were they currently
• 53:59
  at? 110? It was a much more balanced number because
• 54:06
  it got all the way up to like 200%, didn't it?
• 54:08
  Wasn't there like 200 million? I think so, yeah.
• 54:12
  And so we burned off, if I remember right, we
• 54:14
  burned off about, we as an industry burned off
• 54:16
  about 20 million pounds of inventory last year,
• 54:19
  dropped that number down. And I can't remember
• 54:22
  what a healthy number. is 70 90 million well
• 54:26
  it's super hard to determine because you have
• 54:29
  like anything that's alpha going through extract
• 54:31
  plants those extract plants run or you know year
• 54:35
  round and so it might be 20 months before they
• 54:38
  make it to a brewery right it could be yeah for
• 54:41
  sure and so those stocks are sitting there but
• 54:43
  that's in a healthy cycle versus because they
• 54:46
  don't break it out by alpha and aroma but Back
• 54:51
  to the question, what's a good amount of inventory
• 54:54
  for the supply chain? Yeah, that is a hard one
• 54:57
  to answer. And you have inventory policies at
• 55:02
  brewers vary greatly, and a lot of them are much
• 55:06
  more just in time, and others still want to have
• 55:09
  X amount, even like a year or two on hand. Some
• 55:16
  brewers back in the day, I won't name names,
• 55:18
  they carried a three -year, three years of inventory.
• 55:21
  Yeah, right. There were several in that two -
• 55:23
  to three -year range. Yeah. And that was just
• 55:25
  a matter of policy, which I guess I get that,
• 55:30
  where they want to make sure that they don't
• 55:33
  have any issues, inventory issues, but who carries
• 55:37
  the cost of that inventory? Right. And they've
• 55:40
  shifted that greatly to... the dealer slash grower
• 55:45
  bucket. So, yeah, so this coming year, you know,
• 55:51
  I don't know what acreage will be. I think it
• 55:53
  might go up a little bit, not much. I've heard
• 55:57
  some preliminary numbers. There's speculation
• 56:00
  that it could go up 1 ,500 acres this next year.
• 56:05
  That comes out in June. It does, yeah. So, so
• 56:10
  with 25 crop, it was roughly say 42 ,000 acres
• 56:14
  and I think 83 million pounds. And yeah, if you
• 56:19
  add another 1500, 2000 acres, so if we get up
• 56:22
  to 43, 44 ,000 acres could be 86, 87 million
• 56:28
  pounds, maybe in that range. And then if we're
• 56:30
  getting the stock stocks down to about 90 ish.
• 56:34
  Yeah. Right. Is that, is that a hell? Is that
• 56:37
  balanced? Is that. Too little? Is that too much?
• 56:42
  It is so hard to tell. I know. It is. It is.
• 56:45
  The thing, like, if we look at... Azaka is the
• 56:48
  one that we're paying really close attention
• 56:50
  to right now because there's a big uptick in
• 56:53
  demand that we're seeing. Shameless Azaka plug.
• 56:56
  Well, I mean, if you do use Azaka, make sure
• 57:00
  you're contracted because we can't afford to
• 57:03
  speculate to go long again. But... A lot of people
• 57:08
  aren't contracting. They're just buying spot.
• 57:09
  And it's just like what we think is that the
• 57:12
  inventory is out there at the dealer and brewer
• 57:15
  levels just running out because nobody really
• 57:18
  knows how big that market is. Nobody really knows
• 57:20
  how big the hop market is or how many pounds
• 57:26
  of hops make it in beer every year. We probably
• 57:29
  could get within 15 % on... You know, depending
• 57:34
  on how big the crop is, that's an important number
• 57:37
  or material number. So we could have overshot
• 57:41
  our reductions and the right amount might be
• 57:44
  47 ,000 acres. I don't know. I think we probably
• 57:49
  have overshot the reduction, but that was needed.
• 57:51
  You know, we needed to dip below the actual demand
• 57:55
  consumption for a couple, two, three years maybe.
• 57:59
  Here's an interesting question. market corrections
• 58:04
  and you've been around a few in your career do
• 58:07
  you think this one is worse same better in terms
• 58:14
  of impacts to the industry yeah that's an interesting
• 58:19
  one i i would say it it's worse in my opinion
• 58:28
  it's because of the the fact that 80 60 or 70
• 58:35
  to 80 percent of its aroma varieties and and
• 58:38
  the uh number of varieties that are being grown
• 58:42
  out there now it's it's just a more difficult
• 58:44
  correction to make than back in more of a commodity
• 58:47
  space it's um it's almost like each variety has
• 58:52
  its own market which it does yeah i mean that
• 58:55
  maybe that's an obvious statement but To your
• 58:57
  point, we used to be able to follow these macro
• 59:00
  trends and kind of make more macro type decisions.
• 59:03
  And now everything's got layers and it's like
• 59:06
  you can't look at it on a macro scale as easily.
• 59:11
  Yeah. I mean, there's a number of varieties,
• 59:14
  aroma varieties out there that probably have
• 59:18
  maintained a reasonably balanced position through
• 59:23
  this correction. And then, of course, a number
• 59:27
  of the bigger, newer ones, a lot of them being
• 59:30
  proprietary, are the ones that got heavily oversupplied
• 59:34
  and needed the deeper corrections. But others,
• 59:38
  not so much. So it's a little more complicated
• 59:42
  now, this sort of a correction, than prior to
• 59:46
  all these aroma varieties, prior to craft. Do
• 59:49
  you remember, I mean, because obviously there's
• 59:50
  some growers that, a lot of growers are struggling
• 59:53
  through, this market correction along with like
• 59:57
  economic pressures and all the things we have
• 59:59
  to deal with. Do you remember the grower level
• 1:00:05
  impacts being similar to this, like throughout
• 1:00:08
  your career? I don't know. This one feels a little
• 1:00:12
  bit worse in that, in that regard, but I could
• 1:00:16
  be, I could be remembering it differently. Yeah.
• 1:00:21
  I, I don't know. It might be a little, A little
• 1:00:24
  more impactful now because of, I don't know,
• 1:00:29
  I just feel growers nowadays with this massive
• 1:00:32
  investment that was made, you know, are much
• 1:00:35
  more leveraged than maybe they were in prior
• 1:00:40
  market corrections. Yeah, you got to think between
• 1:00:44
  the debt load that's being carried and the increased
• 1:00:49
  demand on. quality and quality systems so all
• 1:00:53
  the overhead that sits at the grower level is
• 1:00:57
  and at the merchant level it has to yeah just
• 1:01:00
  the burden has got to be quite a bit higher how
• 1:01:03
  much along that line i've been speculating on
• 1:01:07
  this um but i'd be curious from your standpoint
• 1:01:10
  how much waste do you think there is in the system
• 1:01:15
  in terms of I guess through all of the inefficiencies
• 1:01:21
  that exist in some of this, I don't think you
• 1:01:23
  can get around. But like, for example, if we
• 1:01:28
  didn't have to change over acres and if the farm
• 1:01:32
  was full and we were delivering hops and getting
• 1:01:34
  paid within six months of harvest, no matter
• 1:01:37
  what, we would probably be able to, just at the
• 1:01:41
  farm level, we'd probably be able to get, and
• 1:01:44
  we're a large farm, get away with. $9 ,500 an
• 1:01:47
  acre, something like that. But because of changeovers
• 1:01:51
  every year and inventory not moving, we are direct,
• 1:01:57
  so we have to eat some of that. All of those,
• 1:01:59
  maybe we need $12 ,000 an acre. And then if you
• 1:02:03
  look into the merchant level where they're sitting
• 1:02:08
  on a bunch of inventory, which there's buildings
• 1:02:10
  that are attached to that and interest carrying
• 1:02:13
  costs and all that, that's another cost. if it
• 1:02:16
  left the warehouse within 12 months maybe instead
• 1:02:20
  of being you know so maybe really a grower if
• 1:02:25
  everything was perfect might need five dollars
• 1:02:26
  bound i don't know and the merchant might need
• 1:02:29
  two dollars a pound and then everything would
• 1:02:32
  be but instead because of the stacked challenges
• 1:02:36
  of the industry it might require 8 .50 a pound
• 1:02:40
  or something but i mean percentage wise i think
• 1:02:44
  it's somewhere around 20 % or something, but
• 1:02:46
  I'd be curious your opinion, how much. Yeah,
• 1:02:50
  it's hard to put a number on that. Um, I do think
• 1:02:53
  there, there is a lot of waste in the system,
• 1:02:56
  no doubt. And I, I always, you know, you, you
• 1:03:01
  follow the inventory and, um, you know, when
• 1:03:04
  I see large inventories just sitting in the warehouse
• 1:03:09
  that weren't needed and the The cost of the inventory
• 1:03:14
  is just huge in the system. And, you know, maybe
• 1:03:20
  it comes down to better demand forecasting, which
• 1:03:24
  is a huge challenge. But I always thought, like
• 1:03:28
  with aroma varieties, if we could manage instead
• 1:03:32
  of all these discrete contracts, and I know it's
• 1:03:38
  idealistic, but if you could just... pool, say,
• 1:03:42
  all of your Citra into one bucket and everybody
• 1:03:45
  took out of that same bucket, I probably would
• 1:03:48
  have bought 25 % less Citra than we had to buy
• 1:03:53
  for covering all these individual contracts.
• 1:03:55
  Because you just know that all that inventory
• 1:03:57
  is not going to be needed. But I never could
• 1:04:01
  figure out a way to, how do we run this situation
• 1:04:06
  a little shorter from an inventory standpoint?
• 1:04:10
  And because sometimes inventories move around
• 1:04:13
  in the warehouse from customer to customer, but
• 1:04:16
  that requires a lot of discussion. And usually
• 1:04:19
  that decision is probably made on the later side
• 1:04:23
  of things than, you know, early on. And by that
• 1:04:28
  point, inventories have already built up to some
• 1:04:30
  degree. And so, yeah, it's interesting to think
• 1:04:33
  about, like, yeah, what if you could have this
• 1:04:34
  big pool of hops people could. could pull out
• 1:04:40
  of, right, instead of carrying everything discreetly
• 1:04:42
  in different inventories. Right, because, you
• 1:04:46
  know, harvest time, of course, there's the huge
• 1:04:49
  focus on hop selection. But, you know, we sell
• 1:04:53
  hops year -round, and, you know, a lot of hops
• 1:04:56
  get sold just off the shelf, you know, stock
• 1:05:00
  product, and it's true to type. It meets spec.
• 1:05:03
  It checks all the boxes. It's great stuff. I
• 1:05:09
  like that kind of selling is easier, but if there'd
• 1:05:13
  be a way to put a little more flexibility into
• 1:05:17
  the system in terms of inventory management,
• 1:05:21
  we could trim out a lot of waste in terms of
• 1:05:24
  growing more hops than we probably really need.
• 1:05:29
  Yeah. Well, then the other challenge that's inherent
• 1:05:31
  in it, and I don't think there's any way around
• 1:05:34
  this, is the nature of craft brewing. is that
• 1:05:39
  a brewer could have a new brand that just explodes
• 1:05:43
  and it's taking market share from its other brands
• 1:05:49
  and it uses a completely different hop profile.
• 1:05:53
  And so then they don't know what's going to happen
• 1:05:56
  next year. And that stuff can change quick, quick.
• 1:06:02
  But I mean, that gets into demand forecasting.
• 1:06:05
  Yeah, I'm just like, there's like a lot of it
• 1:06:07
  you can't get away from. And then a lot of it
• 1:06:10
  we should, to your point, like if we could find
• 1:06:12
  ways to manage around getting it to the brewer.
• 1:06:15
  And this probably rolls up into that bigger efficiency
• 1:06:20
  or inefficiency number that you're referencing.
• 1:06:24
  How much better do you think we could be as an
• 1:06:26
  industry if you had like monthly calls with brewers
• 1:06:30
  instead of? instead of the conversations mimicking
• 1:06:35
  the contract duration you know because like we
• 1:06:39
  have a three -year contract you might meet annually
• 1:06:42
  at least this is how it used to be we're transitioning
• 1:06:45
  into more kind of like monthly or you know quarterly
• 1:06:47
  or you know type of of meetings and it seems
• 1:06:50
  to be helping but uh and maybe that's impossible
• 1:06:53
  to do like completely across the entire supply
• 1:06:56
  chain but i but it is helping whereas in there
• 1:06:59
  was a period of time there where you had a three
• 1:07:01
  -year contract and you would maybe meet once
• 1:07:03
  a year. And then this big problem would surface
• 1:07:11
  at the end of the three -year contract or two
• 1:07:14
  years in. Yeah, once a year is not nearly enough.
• 1:07:18
  And yeah, I would say the demand forecast is
• 1:07:23
  the biggest challenge we have in this little
• 1:07:25
  industry. And we need that input from the brewers.
• 1:07:30
  And I know it's a challenge for brewers. It's
• 1:07:33
  hard, yeah. But to your point, just increasing
• 1:07:37
  the communication can only help. And whenever
• 1:07:41
  something new is occurring with the brewer that's
• 1:07:45
  relevant to us, we don't want to hear about that
• 1:07:48
  six months later because maybe some things are
• 1:07:50
  already put into motion that we can't undo. And
• 1:07:53
  yeah, I always, when it was time to really start
• 1:07:56
  coming into the market to buy more hops, my first
• 1:08:00
  call or through the sales team was to reach out
• 1:08:05
  to brewers, at least the key ones that you could
• 1:08:08
  see were sitting on inventories. And you wanted
• 1:08:11
  to try to work some deals behind the scenes,
• 1:08:14
  kind of. reposition a bit with your sales contracts
• 1:08:19
  and get that kind of straightened out a little
• 1:08:22
  bit if you could. And then if you still needed
• 1:08:24
  to go pick up more hops, then you reach out to
• 1:08:26
  the growers. But again, the point is, you know,
• 1:08:30
  having good communication with the brewer, especially
• 1:08:34
  ones that have larger positions or you're kind
• 1:08:37
  of here and might have some changes coming up
• 1:08:39
  or problems or whatever. Those are the ones you
• 1:08:43
  want to be talking to. you may be able to fix
• 1:08:47
  some things in those conversations instead of
• 1:08:50
  just going out and growing more hops. Or maybe
• 1:08:53
  the hops are already under contract with the
• 1:08:55
  grower, and the last thing you want to do is
• 1:08:57
  have that contract grown again next year when
• 1:08:59
  those hops we already know today are not going
• 1:09:02
  to be needed. So don't put more of those out
• 1:09:04
  into the market. Because once they're grown,
• 1:09:06
  they're going to find a home somewhere. Or they're
• 1:09:09
  going to get pushed into the supply chain and
• 1:09:11
  then sit in. other warehouses and the industry
• 1:09:15
  at large is going to lose visibility and it makes
• 1:09:20
  it even harder to manage. Oh yeah. Oh yeah. I
• 1:09:23
  don't know how many times, uh, you know, we'd,
• 1:09:26
  we'd learn about pretty large inventories out
• 1:09:29
  there, like a couple, two, three years later,
• 1:09:31
  like where the heck did that come from? And pretty
• 1:09:34
  significant amounts too. And we, some of those
• 1:09:38
  things were totally off our radar for a few years
• 1:09:41
  and then they just, show up, well, that has an
• 1:09:44
  impact then on the market. Now that you know
• 1:09:47
  about that, that's going to find a home somehow,
• 1:09:50
  but it's going to impact the market. It seems
• 1:09:54
  like if you could know right as soon as somebody
• 1:10:00
  knows, the efficiency that could be gained for
• 1:10:04
  everybody would be huge. As an example, if somebody
• 1:10:08
  came to, let's just say direct to Roy Farms right
• 1:10:11
  now. They have a 100 ,000 -pound Centennial contract.
• 1:10:16
  We just trained it, right? Traditional mindset
• 1:10:21
  would be, well, you send the contract, it's May,
• 1:10:25
  we're trained, we've sunk 3 ,000 bucks an acre
• 1:10:29
  into the crop by now, so we'll readjust the contract
• 1:10:33
  next year. Well, realistically, what we should
• 1:10:36
  be doing is saying, we're not going to put any
• 1:10:39
  more money into that. and fine, let's adjust
• 1:10:44
  it down, but let's just recoup what we've had,
• 1:10:47
  work through the supply chain. Maybe instead
• 1:10:50
  of paying $8 a pound, you're going to pay $9
• 1:10:53
  a pound for this year, but you're not going to
• 1:10:55
  get too many hops, and we're going to come away
• 1:10:58
  at least recovering most of what we put in. That's
• 1:11:01
  better for everybody in the entire supply chain
• 1:11:05
  if people would just have the discussion as soon
• 1:11:07
  as they know instead of being concerned about
• 1:11:09
  what is this. But, I mean, there are ways around
• 1:11:15
  it, I think. A lot of it, not all of it. Well,
• 1:11:19
  I mean, we've kind of been answering one of my
• 1:11:23
  questions, which, what do you think needs to
• 1:11:25
  change in the supply chain? Yeah, I do feel more
• 1:11:31
  flexibility. Don't know how that is achieved,
• 1:11:35
  but we need greater flexibility in the supply
• 1:11:38
  chain. And better communication throughout the
• 1:11:44
  supply chain from ultimately the brewer to the
• 1:11:47
  grower to try to anticipate changes in the demand
• 1:11:53
  forecast as best we can. I agree. Where do you
• 1:11:58
  think the, and either one of you could answer
• 1:12:02
  this or both, maybe different answers. Where
• 1:12:05
  do you think the grower direct or the emergence
• 1:12:09
  of, grower direct came from and was it created
• 1:12:14
  by the brewers was it created by growers was
• 1:12:16
  it created by merchants and is it a good thing
• 1:12:20
  could it be improved a problem i probably got
• 1:12:24
  more answers for the latter part of that question
• 1:12:27
  than how it started i don't remember how it started
• 1:12:31
  we need we need less roy yeah that is more of
• 1:12:34
  a less roy question how it started i that it
• 1:12:37
  goes back before my time but uh you know i i
• 1:12:42
  just know ab has continues to have a long -standing
• 1:12:47
  grower direct you know so were were they the
• 1:12:50
  first ones to start doing that uh if they weren't
• 1:12:53
  the first they were probably the first significantly
• 1:12:56
  sized brewery yeah because they are the most
• 1:13:01
  significantly sized brewery Yes. And then, you
• 1:13:07
  know, Coors was in the mix there as well for
• 1:13:09
  quite a while. And, yeah, so, you know, I agree.
• 1:13:14
  Of a big player, probably AB was the first one
• 1:13:18
  to really get in that. AB now, ABI. ABI, yeah.
• 1:13:23
  But I think back then, too, they were. doing
• 1:13:28
  a combination of grower direct and from the dealers.
• 1:13:32
  And I can't answer really why they went that
• 1:13:38
  route or what they were seeing. The benefits
• 1:13:40
  of that was to, you know, keep smegs in the merchant
• 1:13:44
  basket, but also to be buying direct from the
• 1:13:47
  grower. But, you know, I would say there really
• 1:13:52
  wasn't a lot of... new grower direct until craft.
• 1:13:59
  Yeah. The, the, the, the, the longer term players,
• 1:14:02
  the, in the market, they, they didn't go down
• 1:14:05
  the grower direct path, but craft, I think it's
• 1:14:09
  craft brewer started to get larger. And again,
• 1:14:11
  like I said earlier, the transparency of the
• 1:14:13
  industry was shifting. Yeah. That's, that's when
• 1:14:17
  I think a number of craft brewers wanted to start.
• 1:14:21
  developing relationships directly with you know
• 1:14:23
  growers that they desired they preferred yeah
• 1:14:27
  i don't remember how it started for us i mean
• 1:14:30
  um beyond i know that my grandfather was approached
• 1:14:34
  by anheuser -busch and we were one of the earlier
• 1:14:36
  direct growers for anheuser -busch but beyond
• 1:14:42
  that well which which led into you know coors
• 1:14:46
  and miller coors and you know on and on sab miller
• 1:14:50
  and heineken some of those other earlier direct
• 1:14:55
  contracts i believe that we're just searched
• 1:15:01
  out because of our size at the time partially
• 1:15:04
  i do know that i remember some of the decisions
• 1:15:11
  my father made to go direct or quasi direct was
• 1:15:15
  because of uh simplicity and efficiency in the
• 1:15:19
  supply chain i mean as an example and it was
• 1:15:21
  hyper competitive during periods of that time
• 1:15:24
  you know in some cases we had these brokers that
• 1:15:28
  would come out and buy hops and that made a lot
• 1:15:31
  of sense when the industry had a higher number
• 1:15:34
  of players smaller acreages volumes need to kind
• 1:15:39
  of be consolidated up and served up to a larger
• 1:15:43
  merchant in some cases And, and we had grown
• 1:15:47
  to a size where we just strictly did not need
• 1:15:51
  a broker in between us and a brewer or between
• 1:15:54
  us and a merchant in some cases. And that was
• 1:15:58
  back in the alpha days. And so I don't know,
• 1:16:02
  it's your question. Is it better? Is it worse?
• 1:16:05
  I don't know. There's I flip flop at times. I'm
• 1:16:07
  like, can someone just take all of our volume
• 1:16:10
  and deal with it? But there's also been probably
• 1:16:17
  an equal number of times where I'm like, man,
• 1:16:19
  I'm glad we have our direct program because we
• 1:16:21
  have some sort of agency over our farm and the
• 1:16:26
  ability to move that product into the market.
• 1:16:29
  I very much go back and forth on that. I do really
• 1:16:33
  enjoy the relationships that we have through
• 1:16:35
  our grower direct program. That's honestly one
• 1:16:39
  of the highlights with the ebbs and flows of
• 1:16:40
  the market. the consistency of the relationship
• 1:16:44
  even though some of those conversations are harder
• 1:16:46
  than others or easier than others but yeah i
• 1:16:50
  think that well we've said this quite a bit since
• 1:16:54
  i've been at roy's that really what we want is
• 1:16:57
  a seat at the table to have discussions and to
• 1:17:00
  interact with the brewers and make sure they're
• 1:17:02
  getting what they want we and we want to have
• 1:17:05
  a touch point in there yeah i think it's important
• 1:17:08
  on for the brewer it's important for us to in
• 1:17:12
  your words have a seat at the table one of the
• 1:17:15
  problems though is is that you know even with
• 1:17:18
  the best intentions things can gravitate towards
• 1:17:21
  control and yeah and marginalizing and so and
• 1:17:27
  i'm not saying that in a negative way it's just
• 1:17:29
  i think that's a natural course of action if
• 1:17:31
  you don't have the right intentions and the right
• 1:17:34
  structure and So I think that's always been a
• 1:17:37
  challenge to try and get something like that
• 1:17:38
  in place. And it's even more complicated with
• 1:17:40
  a farm our size because you can't just go in
• 1:17:43
  and roll into a framework that's probably already
• 1:17:48
  established. Yeah, that is a tough question to
• 1:17:52
  answer. But I do think it depends on the perspective.
• 1:17:59
  Is it better for the brewer? Is it better for
• 1:18:01
  the grower? I think from the grower side, Mike,
• 1:18:04
  I agree with you that the larger farms, I would
• 1:18:10
  say there's a benefit to having a slice of the
• 1:18:14
  portfolio being direct with some big guys out
• 1:18:17
  there. There's a lot of small farms that don't
• 1:18:22
  want to even get into that space. They want just
• 1:18:25
  a few dealer customers for their hops and keep
• 1:18:30
  it simple. not have to deal with a hop selection
• 1:18:34
  from a brewer or whether or not they don't, they
• 1:18:37
  have a problem with your hops or whatever. Now,
• 1:18:39
  what do you do with that Mr. Grower, you know,
• 1:18:40
  with a dealer, you know, those things kind of
• 1:18:42
  just get taken care of. But so, so yeah, the
• 1:18:46
  bigger guys, I think it makes sense to do some
• 1:18:48
  grow direct. And from a dealer standpoint, I
• 1:18:53
  wouldn't say grower direct was problematic. You
• 1:18:57
  know, it's Tolling margins aren't as attractive
• 1:19:02
  as sales margins. Yeah, sales margins. So just
• 1:19:06
  taking in hops for a brewer that bought them
• 1:19:09
  direct from a grower and then doing the pelleting
• 1:19:12
  or extraction, yeah, you know, it keeps volume
• 1:19:15
  in your plant. So that's a positive. But, you
• 1:19:19
  know, the margins aren't going to be as nice
• 1:19:21
  as a sales margin would be. Yeah. It's very interesting.
• 1:19:27
  What time is it? 11 oh nice oh geez i gotta go
• 1:19:32
  thanks for coming on pete glad to be here parting
• 1:19:36
  words of wisdom from pete mahoney um it's it's
• 1:19:44
  been a fun industry to work in i've enjoyed you
• 1:19:48
  know nearly a 40 -year career working in this
• 1:19:51
  industry and i've greatly The most rewarding
• 1:19:55
  thing I'd say that I enjoyed throughout my career
• 1:19:58
  was just the relationships I've had with the
• 1:20:01
  growers. It's like a fraternity in a way. It's
• 1:20:04
  just a unique group of folks that really have
• 1:20:08
  been kind of the same over all that time in terms
• 1:20:12
  of the family farms. I've seen the generations
• 1:20:16
  change. I used to work with... More your dad
• 1:20:19
  and Michael and now you. And that was the case
• 1:20:23
  with many other farms. And I'd like to see that.
• 1:20:25
  I like seeing the younger generation coming up.
• 1:20:28
  And I was glad Kraft came along when it did,
• 1:20:30
  the bull market, because it brought some more
• 1:20:34
  interest to the industry that kind of kept the
• 1:20:36
  next generation interested in staying on the
• 1:20:39
  family farm and brought some kids back. So, yeah,
• 1:20:42
  I really enjoyed the relationships the most.
• 1:20:46
  And, you know, I have a lot of, you know, friends
• 1:20:50
  as a result of that that will continue to be
• 1:20:53
  my friends. So, anyway, it's been a fun ride.
• 1:20:57
  I've enjoyed it. I've enjoyed our interactions
• 1:21:00
  a lot. And I've always felt that you were a really
• 1:21:04
  great proponent and conduit within the supply
• 1:21:08
  chain. A real good perspective and just like
• 1:21:15
  kind of this point of balance between brewer,
• 1:21:18
  merchant, and grower with your role. Yeah, it
• 1:21:21
  felt really good. And I don't know the internal
• 1:21:24
  workings of, you know, if that was easy or hard
• 1:21:26
  or, you know, but it was much appreciated on
• 1:21:30
  the grower side. And I speculate that it was
• 1:21:32
  appreciated at all levels of the supply chain.
• 1:21:35
  And I think that your upcoming award, your...
• 1:21:41
  Order of the Hop Award over in Germany is well
• 1:21:45
  -deserved. Well, thank you. Absolutely. Quite
• 1:21:49
  honored to receive that. Yeah, so as a grower
• 1:21:53
  and a friend, thank you. You are welcome, Mike.
• 1:21:59
  It's been a pleasure. Yeah, well, thanks for
• 1:22:01
  coming on, and I think we'll have you on again.
• 1:22:03
  I think there's topics that we didn't cover.
• 1:22:05
  Sounds good. It's been fun. Thanks, guys.