Craft brewers today have many different varieties of hops to choose from. Some varieties have massive acreage allocations while others occupy only a few acres. The beers you see at your local retailer may contain hops grown in the United States, Canada, Germany, New Zealand, Australia, Czech Republic, France, or the United Kingdom. Given the geographic diversity, thousands of hop farms, and new breeds being released every year to add to the hundreds already existent, Oktopus will source hops from several vertically integrated hop growers and cooperative farms, merchants, and processors based in the Pacific Northwest. These suppliers, like BarthHaas, Crosby Hop Farms, and Hopsteiner provide us access to domestic and international varieties of hops in whole leaf, pelletized, and CO2 resinated extract forms. Fresh hops, also known as wet hops, are available once a year during the harvest that begins in mid August, allowing us to brew very special end of summer beers. We derive confidence from the fact that these integrated suppliers have on-site pellet mills, quality assurance labs, year-round inventory management, systems for expedited distribution, and cold storage. We will also secure hops directly from international hop merchants our employees have worked with in the past. Occasionally we will work directly with family farms to showcase unique new breeds well before they become mainstream offerings.
Hop contracting is imperative to ensure that we are allocated the amount of each specific hop our recipes call for to produce consistent products in the quantities our customers demand. Mocama will enter into delivery contracts for hops required in all production years through 2022. This is the only way to ensure the brewery can profitably brew our core beers for years to come. At this time we plan to contract 100 percent of the hops we will need for the first two years of production, decreasing to 80 percent in the third year, 60 percent in the fourth year, and 40 percent in the fifth year. We will add to those contract quantities as needed based on analysis of trends in the market and our growth rate. The beer styles with the highest production volumes might decline in popularity in the future. We need flexibility, while also showing a firm commitment to our hop supplier partners. This plan results in the highest probability can accomplish both.
Mocama will send representatives annually to hop farms and merchants in the Pacific Northwest, usually in late August and September. We will also solidify our relationships with our hop suppliers at the annual Craft Brewer’s Conference held in April. Getting the right type, quantity and quality of hops, all for the right price takes involvement and effort from on our part. The relationships we build result in us getting a higher grade of hop than we would otherwise receive. Also the merchants we purchase from will learn what specific characteristics we like in our hops and the offerings they have for us to select from will reflect this. Our visits will also put us at or near the front of the line for experimental hops. Visiting hop growers and making our hop selections in person provides inspiration for our entire brewing team. We will return home every year with a renewed appreciation of the hop and fresh ideas for new offerings.