Hops partners target craft brewers
Slower pace of processing helps quality of product
By MATEUSZ PERKOWSKI
During a time of tumult in the hop industry, Jim Solberg and Roger Worthington saw an opportunity.
A shortage of hops around 2008 left many craft brewers paying high prices for the crop and worrying about future availability.
Meanwhile, Anheuser-Busch -- a major hop buyer -- was taken over by the Leuven, Belgium-based conglomerate Inbev, which would prove to have major consequences for growers. The brewing titan that emerged from the acquisition preferred to keep lower inventories of the aroma hops commonly grown in Oregon's Willamette Valley, Solberg said.
"The Willamette Valley was clearly going to bear the brunt of the change," he said.
Worthington, an attorney, and Solberg, a former Nike executive, decided to launch a company, Indie Hops, with the goal of improving stability for craft brewers and aroma hop producers.
The idea was to build a hop pellet mill that would process cultivars that craft brewers demand while opening a new sales channel for hop producers.
By the time Indie Hops had begun operating its Hubbard, Ore., hop pellet mill in 2010, the shortage of alpha hops, used to impart bitterness, had become an oversupply.
However, demand for specialty aroma hops has continued to grow, Solberg said. "The craft industry is booming."
While the craft segment of the brewing industry is relatively small -- 10 percent of total dollar sales -- its revenues grew by 17 percent last year, according to the Brewers Association.
As a new entrant into the hop business, Indie Hops has sought to differentiate itself by focusing on quality, Solberg said.
Pellets are commonly used in the brewing industry instead of whole hops due to ease of storage and handling.
The best way to be "less abusive to the hops" while turning them into pellets is reducing temperature, he said.
As the cones are pressed through a die to form pellets, they experience friction that in turn raises their temperature.
If the hops heat up to 116 degrees Fahrenheit or more, oil compounds and resins that contribute to the flavor profile are damaged.
By running its pellet mill at a slower speed, Indie Hops manages to keep the temperature at an average of 106 degrees, compared to an industry average of 120 degrees, Solberg said.
The other advantage of the slower processing rate is packaging, as the company is able to more thoroughly remove oxygen from vacuum-sealed packages and replace it with nitrogen gas.
Exposure to oxygen leads to degradation of compounds, which has an undesirable effect on beer taste, while nitrogen gas doesn't cause such changes.
Indie Hops' pellet mill has the capacity to generate 4 million pounds of pellets a year, said Solberg.
"It runs at a slower pace than other mills in the industry, but that's still a significant amount for the craft industry," he said.
Aside from its pellet operation, Indie Hops has contracted with Oregon State University to develop new hop varieties with unique characteristics for brewing as well as desirable agronomic properties.
"We really want to improve the natural disease resistance," Solberg said. "Those that don't stand up to disease, we don't even bother with."
The breeding program evaluated 600 crosses last year and has narrowed them down to 150 for further evaluation this year. Indie Hops hopes to release a new variety by 2017.
Developing new hop varieties is particularly important for the craft brewing industry because beer consumers are constantly searching for unique flavors, Solberg said.
"Every tap is a rotating tap now, it seems," he said, referring to the steady influx of new beers at bars and pubs.
The company's entry into the hop business has not been without controversy in recent years. When Indie Hops inked the deal with OSU, some growers complained about a public institution developing proprietary cultivars.
There was also a dispute over the origins and ownership of a hop variety that the company is evaluating.
The controversies seem to have died down recently and Indie Hops is seeing more hop industry support for its efforts, Solberg said.
"We're clearly part of it now," he said. "People know we're not going away."
Employees: Six to 10, depending on season.
Founders: Jim Solberg and Roger Worthington.
Locations: Office in Portland, Ore., and hop pellet mill in Hubbard, Ore.
Operations: The company contracts with several farmers to grow roughly 300 acres of hops, then processes the crop into pellets for sale to craft brewers.