Last month, John I. Haas announced an exciting new partnership with online hops retailer Yakima Valley Hops. We recently sat down with John Snyder who founded Yakima Valley Hops in 2009 with his business partner, Jeff Perkins. Today, they have more than 40,000 customers in 42 countries.
For those who might not be familiar, who is Yakima Valley Hops?
John Snyder: We were one of the first e-commerce distributors of hops. We started out fully focused on homebrewers and quickly realized there was a massive supply chain disconnect for small craft brewers. Today, we’re a premium hops supplier to the small craft and homebrewer market internationally. We believe that small craft brewers and homebrewers are true innovators in the market, so we want to supply them with everything they need to keep craft growing.
How did Yakima Valley Hops get started?
John: Jeff (Perkins) and I have been friends since we were 4 or 5. When we were at school at Central Washington University, Iron Horse Brewery opened a homebrew store. They had a homebrew kit and ingredients, but no hops because there was a hop shortage. Jeff’s roommate’s family stored hops in Yakima and we asked him to bring some next time he visited. He brought a garbage bag full when we only needed a handful. We sold the rest to Iron Horse for beer tokens. We kept doing it and eventually they didn’t need any more, so we decided to put some up on eBay. Soon we were running a store out of Jeff’s dad’s garage and we had a thriving business with 5 or 6 freezers going. We met more farmers, got access to more varieties, sped up our packaging…we were buying any garage-sale freezer we could find and running extension cords from the house. After about two years, we decided to put up a website and the Yakima Valley Hops domain was available on GoDaddy for 99¢. And that’s how Yakima Valley Hops got started. We moved out of the garage and…seven years later we occupy 72,000 sq. ft. of warehouse space.
When Haas approached you, what were your first thoughts about the partnership?
John: As we were growing, we were hiring employees and learning a lot about the industry. Hops are a commodity, so some crops go long, some crops go short—but this was our first time dealing with it, so we didn’t really appreciate what that meant. We were growing so quickly, that when the market went long, we were sitting on a whole bunch of inventory thinking, ‘Wow, we could go down.’ We worked our way through it, but we realized we needed more stability in sourcing.
The other thing was, our reach in homebrewing and small craft had gotten so large, we realized our customers were really relying on us as a supplier. To give them stability, to give ourselves stability—when Haas approached us, it really made a lot of sense.
What do you think are the biggest benefits for your customers?
John: Craft brewers and homebrewers, the smaller guys, they don’t always get a lot of attention or access to things like advanced products. For us, this was all about our core value of ‘keep the innovators innovating.’ Getting access to Haas’s portfolio—as well as getting access to their experience and knowledge—it really meshed well with what we were trying to do.
But there was more to it than that. With the growth of craft, there was this black market that was growing in hops sales. Some people were over-contracted and even hoarding certain varieties and they’d release them on these garage sale sites. Smaller craft brewers, the ones who didn’t have the relationships with hops sellers, they were being held hostage to pricing that was five times more than the original buyers had paid. It put those small brewers in a really tough financial position.
We pushed hard to make sure that wasn’t happening with our products and now, with this Haas partnership, and a more consistent hops supply, we can take some of the steam out of that black-market engine—that mad dash for hard-to-get varieties—we can add more elasticity to the market and be able to supply those varieties all year long so that a brewer can get back to brewing and not worry about sourcing.
Do homebrewers appreciate what the Haas partnership means?
John: We’re excited to show homebrewers and small craft brewers what Haas can offer: knowledge, experience in the industry, and their innovations in the brewing world. A homebrewer would never have access to Haas’ proprietary products, like INCOGNITO™, for instance, or FLEX™. Once they see the products we can offer, and the consistency they can get, everyone’s going to understand this partnership and be really pumped about it.
From your perspective, what does the Yakima Valley Hops partnership offer to Haas?
John: Craft is growing and, for Haas, it’s about getting their products into people’s hands at the ground level. Haas doesn’t have that kind of relationship with the market now—and this partnership gives them that small craft and homebrew presence.
Ultimately, Haas continues to be a volume-based company. We’re transaction-based; we’re serving 7,000 small craft brewers, 40,000 homebrewers. Now, we can help Haas service those individuals companies. We buy pallets of hops, we break them down and repackage for our markets. We’re even launching a new canning line that we’re really excited about.
You’re canning hops?
John: Yeah, a few years ago, I looked at our garbage bin and it was overflowing with mylar bags. We’d had a packaging defect and had to throw 20,000 bags away. I realized, this is trash; you can’t recycle this. We’re shipping hundreds of thousands of these bags to 42 different countries—shipping trash all around the world. How can we fix that? We started looking into recyclable materials and said, why not cans? Crown had just released this cool, new top called a 360 End®, where you essentially tear the whole top off of the can off and it turns into a cup. When I saw that, I knew we had figured it out. Now that we’ve got the line-up and running, we’re getting ready to roll them out into the market this fall
What size cans are you selling?
John: We’re offering 16-ounce cans with a half-pound of hops in it, and then we offer an 8-ounce can with 2 ounces of hops in it. We’re doing 18-packs of cans you can put in your freezer. It’s great branding for homebrew stores, and the boxes are built-in displays. When we shipped in bags, the only labeling we could do were stickers. Now we have can wraps for branding and product information and promotion. We design and print the labels here so we can do holiday cans, we can do special release cans. The opportunities are huge and it’s a really big step for us to further build some differentiation in the market.
What’s the most exciting part of this new venture for you?
John: For me, it’s that the Haas partnership truly is a partnership. They made a strategic investment in us, but Jeff and I still own Yakima Valley Hops, and we still operate the way we’ve always operated. We’re excited to grow in certain areas of the business, but we’re also very diligent about keeping our culture.
As an employer, we have 13 people that Jeff and I are responsible for. They’ve committed time to us, they’ve committed to our vision and they all take ownership in their jobs and in the company. We want to give them stability, too. This partnership with Haas really allows us to offer greater benefits to them, to get our employees up to a proper wage that they can, not just live on, but grow. It made me really happy to be able to give that to them. I was happy that we could reward loyalty and hard work. And getting to know Haas, that’s the same way that they feel about their employees. So, it just feels like a great fit.
To learn more about Yakima Valley Hops, visit yakimavalleyhops.com.