During the past 5 years, there has been an explosion of hop merchants around the world. It seems everybody wants to get into the game. I’m not just talking about traditional hop merchants either who buy from growers and sell to brewers, although there’s more of those in today’s market too. There are growers who want to sell large volumes to big brewers. Big brewers who are long on inventory and want to sell to anybody. Local growers who want to sell to local brewers. In short … There’s a lot of competition out there.
Are all hop merchants created the same? The short answer is NO. Traditionally, merchants buy from growers, process and store those hops and deliver them throughout the year as their customers need them (That’s such an oversimplification). Today, however, in addition to the usual suspects, there are a lot of speculators and noobs in the market. It’s a sign that we are in a hop bubble. While those extra players add additional liquidity to the market, which might be a good thing in the short term, in the long term it adversely affects the market. Speculation can lead to the perception of inflated demand and inefficient deals. It can also lead to people doing unscrupulous things when they get desperate.
There’s a guy we ran across not too long ago who is a doctor by day. Apparently, he had some extra money. Guess what … He’s a hop merchant now in his spare time. Maybe he reads this blog. I don’t know. He contacted us with some hops to sell. We thought we’d try to help him so we analyzed the hops he was offering. The oils were so far out of spec they could not have been the variety he claimed them to be. We naively thought somebody had duped him. We shared the test results with him. We advised him to contact his supplier and complain since what he bought was clearly not what he thought it was. His response, after a week, was to ask if we would be interested if he lowered the price. Then we knew he could care less about what he was selling and he was just in it to make a buck. Needless to say, we told him no. Furthermore, we told him that nobody in their right mind would want those hops if they took the time to test them and that he should not sell them as that particular variety. That was the last we heard from him. For all we know he sold them to some unsuspecting brewer.
The lesson for anybody buying hops today: Caveat Emptor. When people who are speculating on hops for profit get involved in the industry, it’s not good. If you find a deal on hops that is too good to be true, something is wrong.