Sunny Side Hops – Invest Medicine Hat

Sunny Side Hops

Alberta’s fast-growing craft brewery sector needs about 100,000 pounds of hops per year. At an average price of nearly $6USD per pound, Medicine Hat and area farmers should be hopping at the opportunity.

HYPOTHESIS

There are more than 80 craft breweries currently operating in Alberta, with many more in the planning stages. It is a booming industry that shows no signs of slowing down, and is opening up new opportunities along different points of the value chain. It is also hyper-local, with great importance placed on where ingredients are sourced.

Hops in particular is an underdeveloped market in Alberta and the southern part of the province is prime hops-growing land, thanks to plenty of sunshine.

With that in mind, could a Medicine Hat-area hops producer go big and meet growing provincial demand? Invest Medicine Hat investigates and outlines a roadmap to success.

OPPORTUNITY

Alberta’s craft beer industry is still in its infancy, but is growing up fast. There are over 65 craft breweries in Alberta as of 2017, with more in the planning stages. There were 18 in 2014.

Alberta brewers already use 100,000 pounds of hops per year and that number will continue to rise. In fact, a 2018 survey by Olds College indicated that 93% of Alberta’s craft breweries don’t have adequate access to high-quality, locally-grown hops. In the same survey, nearly half of the brewers surveyed indicated they would be willing to pay as much as a 10% premium for locally-grown hops.

Aside from a number of Alberta-based growers producing hops on a few acres, there are no local producers, which forces brewers to import.

One acre of land can produce between 800 and 1,900 pounds of aroma hops. That means as many as 125 acres are needed just to meet current demand. And with prices hovering at around $6USD per pound as of 2017, there’s plenty of business upside.

Medicine Hat’s semi-arid climate is prime hops-growing land. Irrigated, low-cost land and solid transportation infrastructure makes delivery anywhere in Alberta, Western Canada and even the Northwestern United States nearly seamless.

VISION

Set up an 80-acre hops farm by capitalizing on Medicine Hat’s semi-arid climate, water and irrigation resources, and inexpensive land.

Medicine Hat is already home to two growing craft breweries, with a third nanobrewery scheduled to open before the end of 2018. That’s three potential customers at your doorstep. Medicine Hat’s location at the junction of Highways 1 and 3 means Medicine Hat has easy access to the Edmonton, Red Deer, Calgary and Lethbridge markets. Even factoring in transportation costs, Medicine Hat’s inexpensive land and utilities compared to other locations translates to savings.

The Setup

Huge and growing market demand with customers prepared to pay a premium. An obvious gap in production. Inexpensive land conducive to growing. Strategic shipping location. Let’s walk through five important questions to clarify the business. Look below to better understand the market opportunity.

And if you’re ready to go, feel free to use our logo design files. They’re available to you at no charge under Creative Commons 0 licensing. That means you’re free to use them at no charge, and you don’t need to credit us in any way. It’s all part of seeing new business emerge in Canada’s sunniest city.

Sunny-Side-Hops

Who | Alberta Craft Brewers

Alberta’s craft brewers currently import the majority of their hops. But craft brewing is a hyper-local industry and there’s a great deal of pride in serving beer made with local ingredients. Reach out to these brewers – they’re all right here.

What | Locally-grown Hops

Alberta’s craft brewers already use 100,000 pounds of hops, and that is expected to continue its rise. That translates to as many as 125 acres of current demand, and as many as 250 acres in the near future. According to the Globe and Mail, one acre of hops is worth as much as $25,000.

When | Right Now

It’s rare to see the emergence of a completely new industry, but that’s what Alberta’s craft beer market is. With such rapid growth, ingredient suppliers are scrambling to close the gap. Hops production really takes off in the plant’s second year, meaning those looking to “make hay” should get their plants in the ground as soon as possible, while the sun’s shining. At around $6USD per pound, producers are confident they can recoup their initial investment in as little as one year.

Where | Canada’s sunniest city

Hops plants need a minimum of 5 hours of sun per day, and the more, the merrier. Medicine Hat is Canada’s sunniest region, with over 2,500 hours of annual sunlight and one of the longest growing seasons in Canada. Combine that with moderate winters, low land costs, and excellent transportation connections and Canada’s sunniest city is indeed well-suited for hops production.

Why | Craft Brewing is Hyper-Local

This is key. Craft brewers currently import most of their hops, because of low local supply. But craft brewers know their customers appreciate locally-sourced ingredients since that’s a huge part of the draw of local beer. Alberta beer needs local hops.