47Hops Filed for Bankruptcy

Nice glad to see there is some sanity to this, I know when I farmed if I decided to not honor any contract I signed for soybeans or cotton I would be sitting in a courtroom in the not so near future.

 

I'm sure there's a way to blame ABI for this.

 

In the post above by @jesskidden there is mention that Modern Times is a customer of 47Hops.

Perhaps @ModernTimesJacob can provide some more input here to this thread discussion?

Cheers!

 

$250k salary? I'm in the wrong line of work.

 

I don't see how their salaries are relevant to this. They delivered, people didn't pay them. That's what matters here.

 

I keep reading about excess Cascade hops in the above... but I suspect the demand for Cascade in recent years has dropped with the hype around many new hop varietals. If hop suppliers have to project demand 5+ years before harvesting, maybe the popularity/demand for Cascade changed faster than they could predict? Maybe the reported over-supply issue is limited only to certain hop varieties, while other hop varieties are still in very high demand and/or limited supply? Just speculating...

 

Not to speak for Jacob, but I doubt that Modern Times would have seen the issues with 47 Hops that other brewers did. A brewery as well respected as Modern Times is a client that a supplier will do everything they can to make them happy and a brewery with Modern Time's quality standard will also keep all their suppliers in check.

47 Hops is really just a broker. For most breweries buying from them, every purchase is a gamble. I got hops from them that reeked of cheese from multiple feet away. By far the worst hops I've ever had a supplier send me. There were lots of brewers conplaining about the hops from them. Stuff that should never happen... oniony Mosaic for example.

 

I think it is very true that right now there is a surplus of hops, but there is still a shortage of QUALITY hops. The reason to contract used to be do guarantee quantity. Now, I use it to guarantee quality. I over contract hops to the minimum amount that I need to contract in order to do a lot selection. Then right when the hops are pelletized, I sell 25% of them at cost to cover our down payment. I give preference to other local breweries that will brew good beer in an effort to drum up beer tourism to our region and decline to sell to breweries that will brew average or subpar beers. Anything left at the end of the year is easy to sell because the beers brewed with the hops speak for the quality of the hops.

 

So (in your estimation) is this from poor quality storage/packaging? Age? Growing conditions?

 

Hard to say since 47 Hops just buys and sells. They have so many different sources for hops, it's just a mixed bag. The Centennial I bought from them was labeled as the current year's crop, so they would have needed some seriously bad storage to be as oxidized as they were. It's possible the grower left them on the vine too long, they sat baled too long before pelletizing, the pelletizer didn't package them in bags purged of oxygen, then they sat in a warehouse at 100+ degrees... I really don't know other than they were awful when they arrived at the brewery.

 

Figueroa Mountain must be the brewer that 47Hops previously mentioned in this blog post:

This seems to be the root of the issue:

 

Gotcha.

So do hop contracts that Brewers sign typically have any recourse for quality issues? Can the Breweries argue that the Supplier is in breach of contract from their side?

 

Each company is a little bit different, but most will try to work with you to come up with a favorable solution. It is best for the brewer to select the lot they want. A lot of times if you don't like the hops you get and you didn't do a lot selection, the supplier will just send a different lot the next time for you to try. If the hops were bad enough, a reasonable supplier would probably let you walk from a contract. Some suppliers will even help you move over contracted hops off your contract to other breweries in need.

 

It might help explain why these hazy, juice bomb 4 packs will soon be encroaching the $30 mark. "Its got loads of (high margin) hops!"

 

It will take a few months while the "whisper down the lane" effect comes into play. You can be fairly confident we'll see more about ABInBev destroying such businesses as independent hop brokers so they can control the hop supplies.

 

Correct. Now that it is in the hands of the bankruptcy court, they will no longer be only dealing with 47Hops management. I doubt they will be able to duck the calls with impunity.

 

Also, something else comes into play here. Hops, being an agricultural product that's shipped interstate, fall under the Perishable Agricultural Commodities Act (PACA) which controls all participants from grower through brokers, shippers, distributors, all the way to the end user. An end user such as a brewer is protected against accepting non-conforming for use product (icky, cheesy unusable hops) the same as a grocery store chain receiving a container of rotten tomatos. That law is controlling irrespective of otherwise binding contracts or purchase agreements.

Don't know if anything like that applies here, just thought I'd mention it.

 

Maybe relevant here, how one brewer chose to proceed with their bad hop contract(s) http://www.westword.com/restaurants...-turn-a-bad-hops-contract-into-a-beer-9381027

 

I would think something like this is VERY applicable to this situation. The proving of the hops being substandard might be an issue, though.