Everything changed in the summer of 2008.
Belgian conglomerate InBev purchased Anheuser-Busch. Although the company had billboards trumpeting the Oregon hops in Budweiser beer, Goschie was fearful. Oregon grows the nation’s best flavor hops and was once the top hop producer, but it can’t undersell the cut-rate version grown in Washington’s Yakima Valley.
“It was a scary time,” says Goschie, 56. “We really had no idea what was going to happen.”
Sure enough, Budweiser backed away from Oregon, as the new owner weened the brew off so many Willamette aroma hops. Oregon’s hop acreage dropped 30 percent between 2009 and 2011, according to the USDA.
Rather than be another sad story about an old industry plowed under by the grinding efficiency of global commerce, the Goschies and their neighbors fought back.
That battle is changing your beer. Craft beer, an industry that’s seen explosive growth, showcases the flavorful hops Budweiser abandoned. Craft brewers—who have long used the same raw materials as the big boys—now want better new hop breeds that tap the plant’s extreme complexity.
Jim Solberg, a boyishly enthusiastic ex-Nike executive with a surfer’s drawl and a few strings of gray in his shaggy hair, can provide them. Solberg runs Indie Hops, a well-funded upstart Portland hop brokerage that’s already donated $1 million to refuel Oregon’s hop research program, and built a $2 million processing mill. His company brings big ideas to a staid business controlled by a small cabal for a century.
“Indie Hops has brought a marketing sense, and they really want to highlight Oregon hops,” Goschie says. “That’s never been done before. I’m now thinking more like a grape grower than a hop farmer.”
Solberg wants to do more than just save farms. His company is asking scientists to develop bold new hop varieties to grow on the land Bud abandoned. Oregon researchers are exploring a Willy Wonkaesque assortment of exciting new hops that taste strongly of coconut, blueberry and garlic. With help from scientists and brewers, Goschie and Solberg could create the beer of the future that shames the suds you’re drinking now.
Solberg and Roger Worthington have deep pockets and even deeper roots in the Willamette Valley. The men, each 49, grew up together in Corvallis, where they snuck into Oregon State basketball games. Solberg went on to be a vice president at Nike while Worthington became a lawyer, suing companies over asbestos-related illnesses. They’re beer lovers who wanted to unknot their neckties—and revolutionize what you drink in the process.
In 2000, Solberg quit his job to finish building the 36-foot sailboat he tacked along the Pacific coast. He also took up home brewing, seeking the perfect Northwest version of a Pilsner, a lager he describes as “crisp, clean, well-balanced, but has some hoppiness to it.” In September 2008, just as Goschie was finishing her last big harvest for Anheuser-Busch, Worthington flew up from Southern California and buttonholed Solberg at the bottom of a third pint of Hopworks Urban Brewery’s powerful Noggin Floggin barley wine.
“I’ve amassed a small fortune with my law practice, but haven’t produced a tangible product my whole life,” Worthington said in 2008. “I’m enamored with hops and the beers that showcase them. I want to be in the hops business in the Willamette Valley. Hops and craft beer are something I can get passionate about again.”
“You really shouldn’t drink barley wines a pint at a time,” Solberg chuckles. “But I told him I’d research it.”
Solberg found fertile ground: There was no hop seller anywhere focused solely on craft brewers, a market which exploded by 41 percent between 2006 and 2010, according to the Brewers Association. As it happens, Solberg and Worthington’s home turf, the Willamette Valley, has the nation’s best climate for aroma hops, an ingredient that sets craft beers apart from macro-brewers, who often substitute canned acid made from bigger, hardier new-hop varieties. With Bud’s lessening demand—which a company statement attributes to a surplus caused by “favorable crop yields, improved efficiencies and continued changes in brand mix”—Willamette Valley farmers needed new partners to fill their empty trellises.
“Where there’s chaos there’s opportunity,” Solberg says. “Before Bud pulled out, we probably couldn’t get anyone to grow 20 acres for us. But now they’re willing to take a chance on a start-up, and put maybe 5 acres of something in for us to see how it does.”
In 2009, Solberg and Worthington set up Indie Hops. Their plan: to sell hops to craft brewers. To do that, they first need a unique product, which is why, in May 2010, Indie Hops promised $1 million to Oregon State University to recharge the school’s once-vaunted hop research program.
“To think we were snot-nosed 11-year-olds growing up in Corvallis, getting chased by campus police when we tried to sneak in to watch John Wooden’s UCLA squads, and now we’re giving the university a million bucks,” Solberg says. “It’s pretty cool.”
Next, the two need to persuade farmers to grow those varieties and then figure out an efficient way to process and distribute them. They expect to sink about $4 million into the project before they start reaping.
The two set up a picture-windowed office in the Ford Building on Southeast Division Street, around the corner from two of Portland’s best new beer-centric bars: The BeerMongers and Apex. Solberg found eager ears on small brewers burned by big hop brokers—multinational corporations like Hopsteiner, Hopunion and the Barth-Haas Group—who cut tough deals during “the great hop shortage” of 2007, when a series of calamities spiked prices.
“In the process of that hop shortage, craft brewers were kinda forced to contract long term at ridiculously high prices—prices well over $20 a pound when they had been paying $5 or $6,” Solberg says. “So we knew there would be an audience.”
Indie Hops also invested in infrastructure, building a $2 million hop processing plant in Hubbard that preserves fresh hops in easy-to-store-and-use pellets. Without it, Oregon farmers would have to ship their hops to the Yakima Valley, increasing their costs.
The science is exciting, too. Hops are extremely complex plants; their potential as flavoring agents has scarcely been sipped because most research has been focused solely on upping bitterness or replicating the flavor of traditional European varieties.
“It’s quite mysterious—there’s something like 350 compounds in hop essential oils,” Solberg says. “Contrast that with an orange that might have six. A lot of them haven’t even been identified yet. It’s still a specialty crop, and so it’s not like that kind of money has been thrown into it to solve some of the mystery.”
The young American craft-brewing industry has mostly relied on hand-me-down ingredients from big breweries, says Thomas Shellhammer, professor of the fermentation science program at OSU that’s getting Indie Hops’ cash infusion. It’s a task not unlike trying to make fine Italian food with ingredients from the same distributor supplying Olive Garden.
“Up until the last five years, they couldn’t buy enough volume to dictate the specs,” Shellhammer says. “There’s a change now where the craft-brew business is now over 5 percent of the U.S. market, and they’re using hops like they’re going out of style, so they’re consuming more than just 5 percent of the market, and they’re capturing the attention of hop growers.”
Craft brewers, in fact, use exponentially more hops. A 31-gallon barrel of Deschutes Hop Trip, for example, uses more than 5 pounds of hops per barrel. Sam Adams uses 1 pound in its flagship Boston Lager. Budweiser and Miller are made with only a couple of ounces per barrel.
“[Craft brewers] are using 20 times the hops the big guys are putting in, so that got the hop growers all excited,” says Dave Losh, a statistician for the USDA’s Washington state office. “Even when it’s a small group, those quantities make a big difference.”
National hop acreage has dropped 5 percent in the last five years as demand decreases and farmers boost yields. For the first time, craft brewers were the buzz of a recent conference of hop farmers, most of whom come from families who have been in the business for generations, Losh says.
Part of the reason hop acreage has declined is that American macrobrews have been getting less hoppy over time, Shellhammer says. Tests show Budweiser was twice as bitter in the 1970s as it is today. Hops are the most expensive ingredient in beer, so cutting them helps the bottom line. “They take it out slowly and no one really recognizes it’s changing,” Shellhammer says.
Click on an image below for a closer look. Photos courtesy Kirsten Veng-Pedersen.