Excessive price for Fresh hops?

[TPBC]

We have a small hop field that is close by that is in the beginning of harvesting. I got a call a few days ago from my sales rep asking if we wanted to purchase some fresh hops off the vine and they will just drive them over.

I've made plenty of wet hop pale ales and IPA's when I homebrewed and used what was growing in my garden, so I have had some experience in using them. Being that we are a new brewpub, this is our first harvest to use fresh hops to make beer.

I was astonished to find out that this supplier charges the exact same price for fresh hops as they do for dry hops or pellets. This seems like an astronomical price to pay for hops to add to beer. They are making 4 times the profit on these, and don't have to dry them or pulverize them?

I realize that there is a limited time to purchase wet hops, and that could potentially effect the price. But driving my hop cost in a batch around 4 times seems a bit extream.

Since this is my first experience with this, I was just curious if this is normal in the industry? Maybe only with smaller growers? Anyone else have different/similar experiences?

[Jaltwies]

Keep in mind that drying and processing adds only a very little cost to the cost of goods on hops. The real cost is in production and risk management of the crop. The perception is that because the grower is doing "less" work that they should be cheaper when in reality handling wet hops for quality beer should ADD cost. True, the brewer is buying nearly 80% water with wet hops, paying for expedited shipping on water, etc...but the brewer is also paying for a specialty outside of the normal production and distribution chain as well as aroma characteristics not found in dried, processed hops. We have been trying to teach brewers to treat wet hops an a different ingredient than their dry herb cousin. Think of the difference between fresh basil and dried basil, both on cost and attributes.

[schlosser]

While I agree that it is a specialty product,trying to tell me that you'll be charging me the same as a dried hop is BS. The process is EXACTLY the same up until harvest. I personally pick up the hops from the farmer so his cost is LESS that traditionally dried hops. He is not drying them or packaging them (other than the cabbage bags which is a minimal cost). He has no investment in a packaging facility.

We contract our Wet Hops at $2.50 / lb. The dry hop equivalent would be ~$10-12 / lb. At this price, I am still paying a premium for the varieties I am using (vs. my contract prices) but am happy to do so because of the difference in the hop. I would laugh if the farmer tried to charge me $5-7 / lb given the amount that I need to use. I'm all for local, but I will not support local if it entails getting bent over.

Cheers,
Dave

[TPBC]

Jaltwies,

I appreciate your insight from a growers point of view. Although I mentioned hops drying and processing, that was a small after thought of the grower making 4-5 times the profit on the hops.

In my situation I was going straight to the farmer (even though they technically distribute themselves). These guys are an hour away from my brewery. There is no middle man, distribution, or shipping. Its me driving up there with my truck, and grabbing some hops.

Their wet and dry hop prices are the same, and their price is very similar to what I would pay from a larger distributor. We wanted to work with these guys to support small local business, and the cost wasn't more then a larger company for dried or pellet products, so we decided to go with them for some of our hop needs.

However, at the price point of wet hops, it increases our batch cost enough to where we are obviously choosing not to go with them for wet products.

I do understand that it is a limited time product, only available for a short period of time, and I can understand charging a bit more then 20% of its dry counterpart. However charging the same (4-5 times as much), seems excessive.

Now, If I was getting this shipped in, and the water weight caused excess shipping that made the wet hops have the same final price point as dry hops after shipping costs, then I understand that. But thats not the case here. In fact, if I was going to have to pay for shipping above this base price, My cost of goods would be even higher and harder to justify.

All the production and risk management of the hops is the same up until the hops are picked, right? So the cost of growing is the same for the farmer. why would I have to pay for the water weight? If they don't sell any wet hops, they all get dried out and they make what they charge for dry hops. So, it makes more sense to me for them to try and sell the wet hops for 40-50% of there dry weight counterpart and make twice as much as they would on dry hops, and sell more to the brewers because the cost increase would be more manageable.

[TPBC]

Dave,

I didn't really want to bring prices up. But, now that its open....

They are charging me 10 bucks a pound for both dry or wet... its a rediculous increase in my beer costs paying 5 times as much for a product that they will have to try out and sell at 20% wet weight anyways. If i use 5lbs of hops in a batch it cost me 250 dollars with wet hops instead of 50 with dry? really?

They should be happy to charge a little extra (3-4 bucks a pound) when wet and make twice as much profit for the hops.

Its asinine.

I'm glad to hear you have a farmer that seems reasonable on this. Hopefully there are more out there.

[troybinso]

TPBC, have you tried talking to the farmer and making these same points to him? Maybe you could come to an agreement about a lower price.

I agree that it is pretty crazy to be paying that price for wet hops, but if someone else is paying that much, then that is what the market price is. It's hard to blame the farmer for trying to sell his product for as much as the market will bear.

[pete]

We have been trying to teach brewers to treat wet hops an a different ingredient than their dry herb cousin.

Dry herb cousin? What exactly do you have growing on the back 40 over there?

[TPBC]

Troybinso,

Unfortunately when I did talk to them about the pricing they decided to lower the price to 8 per pound. Which is still way too high, insulting actually. As soon as I stated that other hop farmers would sell for 2-4 per pound for wet hops they hung up the phone on me.

Sadly they don't seem to have much desire to look at the pricing of other companies/farmers and see that they are out of line with their wet hop pricing. With the customer service I've delt with it, I'm sure I won't be buying any dry hops from them now either.

There are 5 brewerys in our area, and I'm in the process of talking with the other brewers about this situation, and so far they are all seem to agree with me. We love supporting local, but not if were getting screwed.

If this hop farmer would be reasonable on pricing, then they would be getting business from us later for dry and pellets. But now, they are screwing themselves out of repeat business because they think wet hops are worth 5 times as much.... silly.

[nohandslance]

Just like another Thread on the huge volume of new brewery startup's. 'I'ts insanity'. But that is the price to pay for being in a trendy industry. This farmer has 10 other breweries to fill his orders if you do not want to do business with them again. We had a good barley harvest out in Nevada and Idaho, but the farmers know the rest of the country had some bad areas. The price will be adjusted to the high end in market. I contracted barley for $8.75/BU, the spot market now is $12.50. Hops work the same way.

In Reno, several people, myself included grow hops and donate them to the local brewery for their annual fresh hop ale. I grow Chinook, some do Centennial, Cascade etc. Why not start a program like this.

Lance
Rebel Malting Co.
Reno, Nevada USA
ljergensen@rebelmalting.com
775.997.6411

[TPBC]

Hey Lance...

Technically I should be involved in that program. This is Justin, from The Brewers Cabinet in Reno

Haven't had a chance to call you about malt yet. Ryan (great basin) said you just did the harvest last week I think? I'll give you a call.

[nohandslance]

Justin. Local fresh hops coming your way, just fill my growler. I have a Mild Ale, and Pils malt available. This will be the last of the 2011 harvest.
Please stop by the malt house and take a look at the hops.
Lance
Rebel Malting Co.
ljergensen@rebelmalting.com
775.997.6411

[troybinso]

I'm with you about trying to use local suppliers as much as possible, but I have no qualms about ordering from further away if I feel like I am getting screwed. Too bad you all couldn't come to an agreement.

[Jaltwies]

Troybinso,

Unfortunately when I did talk to them about the pricing they decided to lower the price to 8 per pound. Which is still way too high, insulting actually. As soon as I stated that other hop farmers would sell for 2-4 per pound for wet hops they hung up the phone on me.

Sadly they don't seem to have much desire to look at the pricing of other companies/farmers and see that they are out of line with their wet hop pricing. With the customer service I've delt with it, I'm sure I won't be buying any dry hops from them now either.

There are 5 brewerys in our area, and I'm in the process of talking with the other brewers about this situation, and so far they are all seem to agree with me. We love supporting local, but not if were getting screwed.

If this hop farmer would be reasonable on pricing, then they would be getting business from us later for dry and pellets. But now, they are screwing themselves out of repeat business because they think wet hops are worth 5 times as much.... silly.

Again, you have to realize that what it believed to be a "fair price" and what is real are two different things. Perhaps I can illuminate the true added costs between wet and dry. Proper drying should add less that 1% to the cost of production on a biomass basis, not weight basis. So that means the grower has the SAME cost of production (nearly) whether or not the hops are wet or dry. Now add in special handling and shipping for wet hops and I'd expect to pay the same if not more for wet hops/pound. Yes, you are paying or a lot of water but also many aroma components lost during drying.

I encourage you to investigate and understand your local growers' operations. Anyone selling wet hops for $2-4/lb is operating at a HUGE loss. It is precisely because of this idea that wet hop pricing should be low and that the brewer is getting "screwed" that we do not sell wet hops.

[ColdFusion]

Again, you have to realize that what it believed to be a "fair price" and what is real are two different things. Perhaps I can illuminate the true added costs between wet and dry. Proper drying should add less that 1% to the cost of production on a biomass basis, not weight basis. So that means the grower has the SAME cost of production (nearly) whether or not the hops are wet or dry. Now add in special handling and shipping for wet hops and I'd expect to pay the same if not more for wet hops/pound. Yes, you are paying or a lot of water but also many aroma components lost during drying.

I encourage you to investigate and understand your local growers' operations. Anyone selling wet hops for $2-4/lb is operating at a HUGE loss. It is precisely because of this idea that wet hop pricing should be low and that the brewer is getting "screwed" that we do not sell wet hops.

I'm not sure I understand this. If the cost of production is the same for both dry and wet hops, and dry hops can be sold at a price of $10/lb, then why is $2-4/lb for wet unreasonable? If you start with 100lbs of wet, and end up with 20lbs of dry (for example), selling either at the prices I quoted, nets you the same amount of money (or more with wet).

One of my assumptions must not be the same as yours:
1. Dry hops weigh lose about 80% of their weight during drying
2. Up to time of sale, costs are the same

[schlosser]

Thanks Coldfusion, you said exactly what I was going to.

James, your assertion that anyone selling wet hops for $2-4 is operating at a HUGE loss is laughable. With 80% moisture, a wet hop selling for $2-4 / lb would be selling for $10-20/ lb dry. Not sure of what you are pricing your dry hops at but if hop farmers are operating at a huge loss at the 10-20 / lb then I can't even imaging what the losses are on all my contract hops in the $5-7/ lb range.

I buy my wet hops from a PROFESSIONAL farmer. He has been making his living from farming for the last 25+ years and is a board member of the NEHA. I'm confident that he is pricing his hops at a level that is profitable and reasonable.

It appears you are selling largely to homebrewers where you can markup the product dramatically. I'm glad you have that ability, but don't come into the brewers forum and cry a river that brewers don't understand you or your problems. Brewers are a pragmatic bunch who are usually pretty good at simple math. The math simply states that a hop selling Dried at $10 should be selling wet for $2. If you can prove my math wrong I'd be happy to see it, but as I said, its pretty basic math.

Dave