The Craft Beer Business May Be Booming in Richmond, But One Key Ingredient is Hard to Find

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Hops are king. The fragrant, conelike plant is a vital ingredient for flavoring beer, especially the hop-heavy craft brews dominating Richmond’s bar taps. But the rapid boom of the craft beer industry has left the crucial flavoring agent in short supply.

Breweries must purchase hops on futures contracts — buyers and sellers agree on a price for the product and its delivery before the crop is planted.

If a particular variety of beer unexpectedly takes off, there won’t be enough hops to meet demand when the crop is ready for harvest. And that’s when it gets difficult to find more hops to make up for contracted hops. Either the hops are unavailable, or they cost considerably more.

“For new breweries, finding the hot hops is extremely difficult since contracts have not yet been established,” says Chris Ray, co-founder of Center of the Universe Brewing Co. “Another issue is that if the farms have a bad crop year on a specific hop variety, even though you have the hop contracted for X number of pounds, you could very well get shorted, leaving you stranded at the end of the year unable to brew the beer that uses that hop variety.”

Virginia is working to become a player in the hops industry, but forces driving the U.S. and international market are affected by factors unrelated to Virginia, such as drought in the Pacific Northwest, record heat in Europe and a rise in demand here and in Asia and South America now that they’ve moved toward producing American-style beers.

Virginia is still a relative newcomer to the growing industry, with only about 50 to 100 acres statewide devoted to hops, according to Jonathan Staples of Black Hops Farm. It’s a labor-intensive business. It takes several years to establish plants and get new fields producing, so it’ll be a long time before in-state growers will be able to satisfy even a fraction of the rapidly growing in-state demand.

“A good analogy is grapes,” Staples says. “Virginia is now a big part of the U.S. wine market — and we make great wines — but it took the first growers a long, long time to get there since the initial years were spent learning what grew in our climate and soil, what our yields would be relative to the West Coast and building the market.”

Conditions to grow the industry include vigorous state support of agriculture, abundance of water, a strong farming community and proximity to large markets.

As home to so many top-rated breweries and talented brewers, the vibrant beer community hopes that as Virginia farms grow more hops, knowledge will increase, and growers will begin to get economies of scale that will ensure more price competition.

Allen Young of BSG Craftbrewing, a company that supplies the industry with ingredients and small equipment, sees efforts in that direction already with new acreage around the state and Black Hops Farm’s plans for a huge state-of-the-art hops processing facility in Loudoun County. Black Hops is investing nearly $1 million in the project and the state has given the county a $40,000 grant to accomplish the task, according to a statement from the governor’s office. Tellingly, brewers also are adapting to available varieties when a specific variety of hops sells out.
Larger craft breweries purchase hops in quantities that dwarf those of smaller operations, so their leftovers can be significant to breweries such as Center of the Universe.

“Craft breweries generally are helpful to others in the industry,” Ray says. “The only way to increase craft beer sales is working together. Trades, excess purchasing and advice are common. Usually those types of transactions occur when there’s a prior relationship between the breweries. Just last year, Stone [Brewing Co.] helped us out with some hops.”

And every little bit helps. “New startup brewers have the hardest time,” Young says. “So they must rely on the kindness of others — like Blanche DuBois in ‘A Streetcar Named Desire.’”

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