USA: Colorado’s once-promising hop industry now in dire straits

Walking through rows upon rows of lush bines, hanging heavy with Cascade, Columbus and Chrystal hop cones, one can see how they blow gracefully in the wind like lanky green dancers doing pirouettes. It’s a romantic scene, DellaBianca admits, a twinge of disillusionment in voice.

Nine varieties of hops grow on the couple’s Billy Goat Hop Farm, which at 32 acres is among the largest hop-erations in the state. The irony? Drinkers will rarely find their crop in local beers.

When farmers began sowing the seeds of Colorado’s hop industry more than a decade ago, it was to meet the demands of a “drink local” culture, perpetuated in no small part by MillerCoors, which in 2010 released a beer made exclusively with ingredients from the Centennial State. But the once-promising industry is now in dire straits as small growers try to manage competition from large agriculture, shifting consumer tastes, increasingly unpredictable weather and changes in the way hops are bought and sold. That’s before factoring in a global pandemic.

“We have some orders for the 2021 crop, yes, but not a ton. It’s a small percentage of what our total yield will be,” Gehlhausen said. “There’s so many breweries, especially after the pandemic, that are saying support your local businesses and support your local breweries. And how many of those breweries are doing the same as far as where they’re getting their stuff from?”

Colorado is not a big player when it comes to producing hops, the ingredient used to add bitterness and aroma to beer. More than 95% of those grown in the United States come from Washington, Idaho and Oregon, according to the Hops Growers of America. In 2020, Coloradans harvested 147 acres of hops compared with more than 58,600 acres in the Pacific Northwest, the trade group reported.

Still, hops thrive here, especially in the high desert on the Western Slope. That’s thanks to the number of sunny days each year and the elevation, which intensifies the light the plants receive, DellaBianca said. The arid climate also helps prevent mildew from growing.

Hops are a resilient crop compared to most, able to withstand a hard freeze and grow stronger because of it, said David Warren, co-founder of High Wire Hops in Paonia. But that doesn’t mean they aren’t susceptible to the effects of climate change.

Drought conditions can be detrimental if farms don’t have enough water for the plants, though most use drip irrigation to regulate water use. Hail or excessive wind can damage the burrs, which blossom into hop cones, affecting overall yield. Last year, High Wire produced 30% fewer hops due to heat and wind that dehydrated and stressed the plants, Warren said.

While weather is a concern, growers and sellers said it’s hardly as pressing as trying to get supply and demand in equilibrium.

In 2007, Randy Flores was living on a 300-acre farm in Montrose when he caught wind of a worldwide hops shortage.

“That’s what caused myself and all these other hobby hop farmers to start growing hops,” he said.

Soon thereafter, MillerCoors came knocking with the idea for a beer made entirely with local ingredients. The company was willing to pay a premium, too — about $13 per pound, Flores said — to help farmers offset the steep upstart costs. In addition to infrastructure like trellises and deadmen, hop farming requires special equipment, such as a picking machine, for harvesting and processing at the end of the season.

In 2010, MillerCoors subsidiary AC Golden Brewing debuted Colorado Native amber lager, brewed with 99% local ingredients. The brewery didn’t have enough local hops at the time to tout it as all-Colorado homegrown and even doled out free rhizomes to interested residents to up its stash.

Today, the Colorado Native line boasts seven year-round recipes and four seasonal releases. All of them are made with 100% Colorado-grown ingredients, including hops, said Anna Tomczak, supply manager at Molson Coors.

“We definitely helped jumpstart that growth in the region,” Tomczak said. “There are a lot of craft brewers in the area, so I think year-over-year demand for locally grown hops has definitely increased, and we’ve helped with that.”

The boom, however, was short-lived, growers said. According to Warren, who maintains a contract with AC Golden, the brewery amassed a backlog of hops and eventually stopped paying higher than market cost for them. Molson Coors spokesperson Marty Maloney said the company cut back on hop contracts a few years ago to “right-size inventory.”

“Some farmers were 100% with Coors. Four or five folded right there,” Warren said. “I knew to go along with Coors entirely was not a good idea, so we had a third of our crop that we were marketing on our own.”

The influx of new hop growers also yielded some unintended consequences. When farmers couldn’t sell to AC Golden, they looked for other breweries who might want their product, Flores said, who left the growing industry in 2010 and started a distribution business, US Hop Source.

“The biggest problem was they did not have a track record,” he said. “They didn’t have history like big dealers and brokers, and couldn’t provide the quantity.”

Volume is still a hindrance to leveraging local hops, said Scott Dorsch, brewer and agronomist at Odell Brewing Co. An India pale ale uses 2 to 3 pounds of hops per barrel, depending on the specific recipe. Odell brews 140 barrels at a time, meaning brewers would need 280 to 420 pounds of hops per brew, Dorsch said.

An acre of fully mature hops can yield as much as 2,000 pounds, so Colorado producers wouldn’t be able to sustain the brewery year-round, Dorsch said. Odell would still need to supplement with hops from the Pacific Northwest.

The Fort Collins-based brewery considered using local hops back when farmers were looking for buyers besides AC Golden, Dorsch said; however, the crops were twice the price before being pelletized and made shelf stable. Moreover, Odell’s customers were not demanding locally sourced ingredients in their beer.

“The small-scale growers that are currently in Colorado, we do not see volume, quality, consistency and price point,” Dorsch said. “That sounds harsh, but from a business standpoint it did not pencil out.”

Questions of quality are largely due to a PR problem, said Scott Ziebell, owner of Colorado Hop Co., which grows hops and helps small farmers process theirs. During the Coors boom, some growers did not properly harvest or store their crop, and that left a bad taste in brewers’ mouths, he said. Today, though, Ziebell maintains the quality is on par with those grown in the Pacific Northwest.

Limitations on which hop varieties Coloradans can grow further complicate the equation. Cascade, Chinook and Nugget are examples of public hops that can be grown by any farmer. But others, such as Citra, Mosaic and Simcoe, are what’s known as proprietary varieties, meaning the companies that developed them have exclusivity to grow them. The latter are in high demand due to evolving consumer tastes. Citra, for example, is commonly used in the ever-popular hazy IPA and coveted for its lime, grapefruit and other tropical fruit aromas.

But even if Coloradans could plant whatever varieties they wanted, they’re now battling a surplus of supply, according to Flores. Years ago when hops were hard to come by, breweries contracted with specific farms to buy the following year’s crop. They were often locked in multiyear contracts for what are now considered less appealing hops, leading them to have extra — lots of extra, Flores said.

Recently, breweries have turned to Lupulin Exchange, an online “spot” marketplace, to sell their surplus, directly competing with farmers and brokers, Flores said. Spot buying enables small brewers to purchase just the hops they need, and it’s becoming more commonplace, especially in light of the pandemic.

“Instead of people buying on the spot market in larger quantities for the next three months, they’re now buying quantities for the next three weeks,” Flores said.

All these factors are contributing to an uncertain future for local hop purveyors, who are traveling far and wide to find customers. Colorado Hop Co. has been experimenting with “new and exciting” public hop varieties that Ziebell is optimistic will earn the local hop scene some notoriety. Warren at High Wire Hops, however, is more blunt about his prospects.

“Without the Coors contract, we wouldn’t be in business,” he said.

“’Scary’ is my word if I were a Colorado hop grower,” added Flores.