In 2011, Select Botanicals Group started Certified Select™, a brand management program with the objective of meeting brewer and grower demands at fair and sustainable prices. Focal areas of the program include quality, food safety, sustainable pricing, and supply assurance. We will cover each of these in depth over the course of the next few posts, and additional information can be found on our site, but the big question that seems be on everyone’s mind is supply. Almost daily, certainly weekly, it seems there are articles, blog posts, etc. on the subject of hop supply, or the presumed lack thereof. These articles and posts are heavy on conjecture but light on facts, so we thought we’d take this opportunity to present a few facts from the Select Botanicals Group point of view.
The 40,000 acres of commercially grown hops in the US may seem like quite a bit of land, but in reality that is only slightly larger than the Denver International Airport. By contrast, in the United States, there are roughly 2 million acres of barley, which is slightly larger than Delaware. Yet somehow these 40,000 acres of hops find their way onto the shelves of supermarkets, bars, and convenience stores around the globe. Select Botanicals Group and Hop Breeding Company varieties represent a relatively significant portion of these hop acres (roughly 4,800), and demand is not slowing. In fact, the growth rate of Citra® and Simcoe® has outpaced all other major aroma hop varieties.
Keeping up with astronomical expansion rates requires good information and proper use of it. We take a statistical approach to how many new acres we plant every year. By using a risk based model which takes into account all the historical data available and using contracted volumes as a baseline, we create the best possibility of meeting contracts and having spots each year. As a result our Certified Select™ production was over 100% of contracted volume in 2013, and assuming Mother Nature cooperates (She always has the last word), 2014 should be no different.
More demand = more acres = more growers. Prior to 2011 three to four growers were all that was needed to meet demand, but that quickly changed.The rapid growth in our existing and newly released varieties required us to expand our grower base. The original pool of three growers has grown to 23 and will surpass 30 next year. By next crop year our growers will represent around half of the Pacific Northwest commercial hop industry. There are few varieties with this level of coverage, public or proprietary.
In summary, based upon acreage and the growers to support it, we do not expect a shortage in our varieties; in fact, the system is designed to prevent it. We take an aggressive approach to adding acreage and growers, and work diligently to meet contracted volumes, now we just all need to cross our fingers and hope Mother Nature is feeling cooperative.
We also recognize that it’s not enough to merely supply the market with sufficient volumes of hops. In order to fully contribute to our customers’ success, we must supply hops that are of the utmost quality with the full confidence that they have been produced in a sustainable and safe manner. That is where the remaining aspects of Certified Select™ come in. We don’t have the space to cover all of these in a single post so the following is an abridged summary. With that said, these are very important aspects of our program and as such we will devote posts to each of these in the coming weeks.
We are proud to say that we work with over half of the commercial growers in the Pacific Northwest, and their commitment to the brewing customers is unwavering. There are literally tens of millions of dollars being reinvested all over the Pacific Northwest to make sure that hop needs are met. New picking machines, new acreage, new varieties, updated equipment, and a spirit of collaboration are evident across the entire hop growing region.
This site has been developed to serve as a communication between brewers and growers, as well as anyone interested in what our Certified Select™ program is up to. We will cover each of the above topics in depth over the next few weeks. Additionally, we will share everything from crop reports, new acreage reports, our production reports, and many other important aspects of our business.
Please watch next week for our early season crop report.
Posted July 22, 2014