Diana Puterbaugh faced some skepticism in 1997 when she launched an online hop-sales business to serve craft and home brewers.
It took a couple of years before her brainchild, Hops Direct LLC, started to see some interest.
Now, the operation she owns and operates from the family’s 700-acre farm on Green Valley Road is thriving, selling leaf hops and pellets to buyers around the globe, as far away as Israel.
Husband Stacy, 46, oversees the farming operation that also includes apples, grapes, raspberries, corn and pumpkins.
Hops Direct is riding a crest of growth in the still-small craft beer segment of the overall beer industry. While less than 10 percent of the market, craft beers sales and volumes are expanding as total beer consumption declines nationwide.
The Brewers Association, a Boulder, Colo., trade group for small and independent brewers, reported a 14 percent increase in craft beer sales in the first half of the year compared with 9 percent for the same period last year. A craft brewer produces fewer than 6 million barrels a year.
Puterbaugh, 45, attributes the growth to changes in consumer taste. She thinks the down economy has helped the craft too because people can save money with home brewing.
“Consumers are liking more styles of beer to choose from, better brew quality and home brewing is a relatively easy and inexpensive hobby,” she said.
The hop harvest is now in full swing after growers encountered delays from the cool spring that has affected so many Valley crops this year. Harvest is expected to run through much of this month.
The Hops Direct cold storage and packaging facility fills and ships orders on a daily basis. The firm also sells hop soaps and pickled hop shoots to retail outlets.
Nearby, a massive picking machine is chewing through the seemingly endless line of hop vines that workers hang on hooks. The machine separates the cones from the vines and conveys them to the kiln, where the hops will be dried in preparation for baling.
The Yakima Valley hop industry, the center of U.S. hop production, is seeing another decline in overall acreage this year.
The U.S. Department of Agriculture reports harvest will take place on 23,368 acres in the state this year, a 5 percent decline from 2010. Washington’s producing acreage peaked at nearly 30,600 acres in 2008 in response to low worldwide inventories. Total U.S. production is confined to Washington, Oregon and Idaho with slightly more than 30,000 acres.
But oversupply is once again affecting the industry. Ann George of Moxee, administrator of two grower groups and the Washington Hop Commission, said the acreage decline is the result of a current oversupply and a shift in varieties sought by brewers.
Average prices are falling as growers near the end of long-term contracts written at the start of the acreage run-up. Prices per pound fell last year to $3.08, down from $4.08 in 2009, according to figures released by the U.S. Department of Agriculture’s National Agricultural Statistics Service.
George called the growth in craft brewing a positive for the industry even though it takes fewer acres to supply the needs of the specialty brewers.
“It is a bright spot for the industry in terms of having something to replace a portion of the acreage,” she said. “It’s fun to work with the craft industry. They are enthusiastic and really add a lot of positive energy.”
Paul Gatza, manager of The Brewers Association, said craft brewers are innovative and are small enough to try new things with different varieties and different brewing methods.
“It’s not like they have to fire up the R&D. They can come up with an idea in the morning and do it in the afternoon,” he said. “One of the areas of innovation is brewers are doing more with different hop varieties.”
Brewers Supply Group of Yakima, a subsidiary of Minnesota-based Rahr Malting, supplies major brewers as well as craft brewers with malts, hops and other products.
Manager Sean McGree said there has been much conjecture about how large the craft-brewing industry could grow.
“We were told for years that it would never grow to more than 2 percent of the U.S. market,” he said. “Now they are knocking on 10 percent of the market. Can we hit that? I don’t see why not.”
Puterbaugh’s Hops Direct has responded to the interest in varieties. The firm, which is a separate legal entity from the farming operation, offers 15 varieties produced on the farm but supplements its inventory with 20 additional varieties from other sources.
Hops Direct sells both pellets and leaf hops in a variety of sizes, from as small as a pound to as much as 40,000 pounds.
Orders are vacuum sealed and shipped daily. Puterbaugh said the pace of orders will pick up dramatically toward the end of the month as customers seek supplies from the 2011 harvest.
Puterbaugh enjoys working with craft and home brewers because it’s a business where customers and farmers can get to know each other.
As for the business, she said she wouldn’t mind more growth, but is pleased with the current size of her operation, one that grew out of her early interest in the Internet.
“We were in the right place at the right time,” she said.