The Monsanto of Hops

There are some varieties you want, but you haven’t been able get them … Sound familiar?  Maybe that’ll change this year. I wouldn’t hold my breath if I were you. So, what have brewers done about it? Have they made less beer than they needed?  Short answer: NO.  It’s not the end of the world. Brewers can live without the handful of varieties causing the frustration just fine. It turns out there are over 100 other interesting varieties out there that can be used in different ways.  That’s not to mention Heirloom varieties, which are making a comeback and promise to be a bonanza.  Just like on the TV show Bonanza, there will be a happy ending at the end of the episode. The answer … There are some Open Source public and proprietary varieties out there that are accessible to everybody.  Brewers don’t have to be held hostage to somebody else’s business strategy.

Shortages of some proprietary varieties the past few years have given proprietary varieties a bad name, but they’re not all the same. The hype has helped to further polarize the industry … not that there was ever a time when the hop industry gathered around a campfire to hold hands and sing kumbayah. You might think somebody with a successful hop variety would do everything possible to help potential customers buy them, that they might enable it to get out to the masses and rise to the top. So, why are there shortages? Why hasn’t the supply of these short proprietary varieties responded to demand? Let’s take a look.

There’s a lot of posturing, politics and inside baseball in the hop industry. Things are very different than they appear from the outside. Despite the appearances of multiple companies selling the varieties and despite the propaganda that dozens of growers are growing these varieties, there are Some Big Growers controlling every last decision related to some of the most sought after proprietary varieties. To put it more bluntly, everything flows through one company you’ve probably never heard of. All the growing decisions, all the buying decisions, all the pricing decisions, all the sales outlets … it all ultimately come back to one company. I like to imagine they’re sitting in a plush room filled with cigar smoke, but that’s probably a bit too stereotypical. To say they’re the Monsanto of the hop world is no exaggeration, but you’d probably never know that because of all the smoke and mirrors … unless you’re an insider. Brilliant strategy for the Gambino, the Giordano and the Trafficante families who control that company and what we’ll call the hop syndicate!  Badda Bing!  Badda Boom!

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Open Source Hops are, on the other hand, available to anybody who wants to grow them and can be sold at the market price for whatever the going rate. You don’t have to get the blessing of the Godfather behind the scenes to grow your hops or make your beer. Public varieties are freely available, and, thanks to some rational business people in the industry, there are also Open Source proprietary varieties that are available to growers who pay royalties on the production. No shortages there! Hmmm. The Open Source proprietary variety owners decided from the get go not to restrict their access or try to greedily hoard all the sales through their own companies. Instead they make them available to growers and merchants who would like them. The royalties they are paid from the production, which is closely monitored, pays for all their investment and hard work. That seems like something a company might consider if it cared about supplying its customers with the products they need. It seems like something somebody would do if they want to support a free and open market.

Those don’t seem to be the goals of the families in the hop syndicate. From the outside, it appears they’re either purposely restricting the supply or seriously misreading the market. There’s a lot of speculation on the Interwebs that the shortages are intentional to jack up the price, a-la De Beers in the diamond world. Since there are multiple hop merchants involved, that would be anti-trust, which would be risky at best … but that’s not for me to decide. We’re not privy to their conversations. Ultimately, we can’t know their motives and should give them the benefit of the doubt.

Monopoly

It seems the hop syndicate’s strategy works well for you if you’re the owner of Big Ass Brewing Co.  They like those guys, and yes, they do pick and choose the growers and brewers that get to play with their toys. I don’t think even Monsanto is that power hungry. They just want to make ungodly amounts of money. In the current game, if you’re the owner of Local Guy Brewing Co. in Podunk, Nebraska, chances are you’ll never see those cool kid hop varieties, but maybe that’s not all bad. We’ll explore why in a bit.

Despite how sinister their actions look from the outside, I believe the truth behind the shortages is more likely because the hop syndicate has built up an impressive infrastructure around it. I can only imagine that information lags as it flows through complicated A and B pools, intricate cooperative buying schemes and different companies slowly making its way back to the mother ship. It seems the hop syndicate may have fallen prey to its own secrecy. Their micromanagement provides control that any OCD person can respect.

Unlike Monsanto, whose goals seem to be to profit every time somebody in the world eats, the goals of the hop syndicate seems to be total control of the hop market. Of course, the shortages and their resulting high prices, feed plenty of creative conspiracy theories. I’d cover up the little camera on your computer with a sticker … just in case.

To add insult to injury, in addition to strictly controlling production, pricing and sales outlets for these cool varieties, it seems the families have started a smear campaign of Open Source varieties too. They’re busy guys. That’s not cool though. One way insecure people lift themselves up is by putting others down. That’s probably why they’re downplaying great Open Source Varieties like Cascade, Centennial and Chinook. They’re certainly aware that their cooperative buying schemes run by their companies that interact with customers more closely resembles a Ponzi scheme than anything. We just had a brewer yesterday refer to one of them as “The Devil” … I kid you not. They asked us to help them so they never had to go back to the dark side for hops. They hadn’t even read this article yet. So … If you hear somebody bad mouthing one of these tried and true Open Source Hops, don’t believe the hype. Those varieties have thrived over the years for a good reason.

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Thing is … when a brewer can’t get one of those cool new flavors of the month, do they say to themselves, “Oh golly. I guess I just won’t produce any more beer for my customers”? Of course not!  They move on.  Craft brewing is a science, but it’s also an art.  Great artists find creative ways to solve problems.  If a painter doesn’t have yellow paint, he can mix a little red and green to get what he needs.  Craft brewers are the same. Don’t forget, there have been a lot of masterpieces created with Cascades, Centennials and Chinooks. Even the Monsanto of hops is powerless to stop the craftiness of the craft brewer. They’ll move on to Open Source Hops, use them in a unique and creative way and produce some awesome beers.

Long live the craftiness of craft brewers!