Solving a Logistics problem for Florida breweries

Question: What is one of the biggest disadvantages for breweries in Florida?   

HINT:  It’s about 3,000 miles from Yakima to Tampa. 

Wouldn’t it be great if there were a cold storage hop warehouse centrally located in Florida?  And better yet, wouldn’t it be great if a Florida brewery could get FREE SHIPPING from that warehouse? 

Well, hang on to your flip-flops.  Keg Connect and eLease in St. Petersburg, Florida just announced that they are partnering with Glacier Hops Ranch to establish the first cold storage warehouse for hops in Florida. 

Here were the official quotes announcing the partnership:  

“The cost of freight from the main hop cold-storage warehouses in the Pacific NW is a significant hurdle for brewers to do business in our primary service area in the SE United States,” said Tom Williams, CEO of eLease. “Our goal is to help brewers reduce their operating costs by offering free shipping of hops from our St. Pete keg warehouse when they take shipments of kegs from Keg Connect.  

He added, “this is especially timely because of the increased operating cost pressures for everything from aluminum to labor and fuel.  This is a direct reduction in cost through exploiting efficiencies.” 

So how can this possibly work?  Isn’t this just some sleight of hand pricing gimmick? 

No.  The “Free Shipping” offer allows Keg Connect to take advantage of dead air space on top of its keg pallets, to simply be able to stack boxes of hop pellets destined for the brewery customer.  Shipping of these boxes of hop pellets is at no additional cost for the keg customer, as long as they fit on the keg pallet, and in the truck. 

It’s not rocket science, really.  eLease and Keg Connect are simply exploiting an opportunity to offer more value to their keg customers.  Breweries need kegs, and they need hops.  Keg Connect has dead air space in their trucks.  It made too much sense, they told us over a beer. 

Breweries can also stop by the keg warehouse and pick up hop boxes, with no freight cost or pickup charge. There are, after all, 88 breweries within 45 miles of this keg warehouse in St. Pete.  Plus, if a brewery doesn’t need kegs when they need a shipment of hops, hops can still be shipped to them via the most cost-effective means, with the notable exception that they will be originating from that St. Pete warehouse, instead of from the Pacific Northwest, 3,000 miles away.   

eLease and Keg Connect told us that they were looking for an innovative partner in the hop supply business.  One who could provide them with a wide variety of quality hops suited to the range of beers produced by Florida and other SE brewers.  In the end, they chose GHR as their hop supply partner.   

It’s a win-win for everybody. 

Sure, at GHR we pride ourselves in offering a wide variety of competitively priced, high-quality hop pellets, but hop pellet boxes are bulky, heavy, and have to be stored properly at predictable cold temperatures for optimal quality.  The bugaboo in Florida and the Southeast U.S. has always been the high cost of freight from the main cold storage hop warehouses to this region. 

We’re happy to be a real part of a serious solution.

How the Pandemic impacted the Craft Brewing Industry 

I remember when I first heard of this new virus…COVID-19?  It seemed like it was so distant, and like Ebola, SARS, the Avian flu and so many others…it was going to be much about nothing. 

I couldn’t have been more wrong.  It changed our life and everyone else around the world. 

By mid-March 2020, we were all locked down.  Are you an “essential” business?  You can stay open.  You’re not?  Work from home, if you can.  Boy was that confusing! 

Craft breweries suffered tremendously.  The two primary distribution channels for most small Craft breweries were either taproom distribution or cans/bottles.  If you were in the taproom-only camp, you were screwed.  This pandemic had winners and losers, and they were primarily separated by your distribution channel. 

Craft quickly reacted…partially out of desperation.  By April, the Brewers Association was predicting that as many as 85% of all U.S. Craft breweries could be shuttered permanently if this pandemic wasn’t over in a few months. 

Fortunately, the PPP program was launched here, and it was a lifeline to many.  An estimated 80%+ of Craft breweries in the U.S. were able to take advantage of it, and it was largely credited with keeping a massive volume of the Craft breweries afloat.   

You also saw rapid pivoting in the business model.  I’d never heard of “pivot” used so much in any industry outside of irrigation.  You don’t package in cans or bottles?  Find a mobile canner, quickly.  Don’t do growlers?  Rally your legislators and get drive-up growler sales or home delivery approved in your state.   

However, the pandemic interrupted much innovation, particularly with new hop varieties, specifically Triumph, which was launched in 2019…months before the pandemic hit.  The industry focus was on survival, not innovation, and the results showed.  The industry survived.   

But innovation with new hop varieties?  Innovation in many facets of brewing suffered as R&D budgets were slashed and production centered around tried-and-true. 

Well, it’s time to get back to innovating. 

I’d like to suggest you start with evaluating Triumph, that new Public variety that was launched in 2019.  Its noble genetics are definitely present, making it the perfect lager hop, but Triumph has also found a home in fruit-forward ales and IPAs, due to its bright aromas of orange, lime, and peach, yes, Peach.   

Intended as a higher-alpha (approx. 9-12%) aroma variety with high myrcene and humulene and low cohumulone, Triumph adds secondary notes of spice and pine to its sensory profile. 

It’s true that Triumph slipped through the cracks of hop innovation due to the pandemic, through no fault of its own.  But now that the world is emerging from the pandemic, you should consider adding this new variety back into your brewing spice rack. 

Launching Ahhhroma™… a new proprietary hop

Craft brewers around the world are always in search of something new, something different, something to create the next fantastic beer. What’s going to be the next Citra? But where do these new varieties come from?

Many of them come from highly sophisticated and methodologically-planned breeding programs, that can take up to ten years to develop and launch commercially. You can include the Hopsteiner and HBC proprietaries in that bucket, along with just released Vista™, developed by the Hop Research Council.

And honestly, some of them are also accidents or “found” varieties. Good examples include Amarillo and Idaho Gem. The Amarillo story is a great one (and I can definitely see how it can happen). It was accidentally discovered by Virgil Gamache Farms in 1990 when they found it growing alongside their Liberty field. They began cultivating it then patented it as a new variety. It was originally patented under the identifier of VGXP01.

You can add to that group, the origin of the new proprietary variety from Glacier Hops Ranch, Ahhhroma™. When our original research hopyard was established back in 2013, we had as many as 44 different varieties being grown there.

We planted exclusively female plants, like any commercial hopyard. But the first few years, we did find some hermaphrodite plants (both male and female flowers on a single plant). That’s a bad situation, because a pollinated hop flower will produce 60% less lupulin resin, and you want to yank those bad boys out. The energy that normally goes into producing high levels of lupulin resin, is diverted instead to producing seeds. Every commercial inventory lot of hops is graded for seeds and stems today because they are both undesirables.

But what happens when those hops go through the harvesting machine, and the “chop” blows the excess out the back as waste, to eventually go back in the fields as compost? Occasionally, you get a cross-bred seed, a “volunteer”, usually likely of unknown origin, and definitely of unknown origin in the case of Ahhhroma, because it could have been a cross between 44 different varieties. We have no real idea.

So we can safely say that it came out of the Research Hopyard at Glacier Hops Ranch, but that’s about all we can say about the origin.

We can also say that the result was surprising and has been worth pursuing over the past several years. We had a small amount of Ahhhroma acreage in our early years, and it all went into Hopzoil™. The harvest of 2021 was the first year we had enough to put into pellets, and the initial lot came in at a pretty awesome 16.6% Alpha Acid content, to complement the high oil levels with notable mango, pineapple, pear, piña colada sensories, with notes of stone fruit, lime, watermelon and hints of cinnamon and nutmeg.

Give it a try. I think you might like it.

The Oxymoron of Water-soluble Hopzoil

When we first launched Hopzoil back in 2016, the concept seemed simple enough. Extract the oil from fresh hops via steam distillation and voila! Put it into beer and you have all the aroma and flavor without the pellets or biomass. It made sense to someone who had never done it before (yours truly) because the same oils are steeped from pellets and are completely dissolved and suspended in beer via dry-hopping. A funny thing happened on the way to innovation. Steam-distilled oil in its native format is pure essential oil, and as such…, it floats on water. Brewers tried it and while it smelled great in a glass, being able to replicate it in a brewed beer with consistent aroma and flavor, proved elusive, to say the least.

In 2017, one of our brewers said “I know how to fix that. I just blend it with ethanol and it will be water-soluble.” “Ethanol? You mean like high-test Everclear grain alcohol?” “Yup”. Well in hindsight, it sorta worked for a while. Pure oil can be soluble in high-proof grain alcohol, but that was an imperfect solution at best. Ethanol mixed with a hop extract has an exemption in the U.S. by the TTB, but the imperfect solution went further. Ethanol is still not allowed in many other countries, in any amount. For a Non-Alcohol beverage (NA beer or soft drink), it is verboten. But most importantly, there are some compounds in the pure oil that simply will not emulsify with ethanol. Finding the Holy Grail, it seemed, was the equivalent of an oxymoron: water-soluble oil. Pre-emulsified Hopzoil, to be specific.

Three promising technologies emerged from 2019 to 2020. Out of those three, one kept improving through literally hundreds of reformulations and led to what is now our MAJIK and HAZY fully water-soluble Hopzoil. What do customers think? Well, it seems there’s more to it than just water solubility. Clean-up is a snap. It’s more consistent. The dosing rate is the ballpark the same as PURE Hopzoil (although some use a bit more, some use a bit less to suit their recipe sensory). But by and large, the oxymoron has worked. Certainly better than Jumbo Shrimp.

The State of the U.S. Hop Industry

Having just returned from the annual American Hop Convention, I must say it was nice to get back together in person after a year in virtual hell. Conventions are known for their formal presentations, but the whole reason that people “convene” is for the informal discussions that are often as important, or even more important than the formal presentations.

Things that were wide-eyed, forward-thinking innovations in the hop industry three to five years ago are now mainstream. People move around, get promoted, have new responsibilities, and enjoy a few beers together. Prepare for hops to get more costly over the next few years, particularly in Washington state, as their state legislature passed mandatory increased wages and overtime restrictions to be phased in over the next few years. The angst directed by Yakima Valley hop growers toward the Seattle/metro legislative majority…is putting it mildly. Harvest time for any farmer around the world knows no clock.

As my mother used to say “you make hay when the sun shines”, and when the hops are ripe, the harvest window is narrow. All hop growers operate 7 days a week for the roughly 30-35 day harvest window, with some large growers operating 24/7. That means that some 80-90 hour work weeks, (which had traditional agriculture exemptions because they are balanced with time off work), will be subject to overtime after 40 hours each week, phasing in fully by 2025. The positive news was the new public varieties developed by the Hop Research Council, if for no other reason than to reduce the costs associated with certain high-cost proprietary varieties. Public varieties that any hop farmer can grow without royalties is one of the objectives, to ultimately benefit the brewer.

The Experimental variety previously known as 074 has been officially named “VISTA”, the first new public US variety in about three years. It was pointed out that one in five hop plants in the Pacific Northwest last year was Citra, underscoring the brewing industry’s dependence on private varieties. One of the more notable presentations was the first-ever Lifetime Growth Cycle assessment of hops. A fascinating look at the complete Greenhouse Gas Emissions from farm to brewer, coming out of the UN Climate Change Conference last November in Glasgow, Scotland, underscoring an urgency for strong climate action. Good on ya, hop industry. And one of the points made in the presentation was a statement by Anheuser-Busch to reduce the environmental impact “from seed to sip”, whereby their stated goal is to reduce CO2 emissions across the value chain will be reduced by 25%. A leadership position from the largest beer company in the world is duly noted.