Glacier Hops Ranch, Inc

Glacier Hops Ranch (GHR) is a ten-year-old  ingredient supplier that primarily supplies breweries around the world with ingredients.  The company's key innovation is a hop extract that increases batch yield, generates more profit with every batch, provides a longer shelf life as well as other economic and qualitative benefits.  

The Company operates with two business segments:  the aforementioned hop extract (called Hopzoil™), and a Broker/Dealer segment that supplies processed hops for the Craft-style brewing industry.  GHR's sweet spot is the Craft-style brewing industry, which globally produces 26% of all beer, but uses 4x the volume of hops that the entire industrial beer segment uses.  While this segment is flat in the U.S., worldwide growth is forecasted at 10.83% CAGR for the next 5 years.

Flavorful hop-forward beers are the hallmark of this Craft-style beer industry, and on average uses 10 times more hops per barrel (a unit of measurement) than industrial beers.  This heavy ingredient load, however, produces unintended consequences that are a drag on profitability.  Most often cited are yield losses ranging from 5% to 35% per batch, as the hop pellets will soak up to 10 times their weight in liquid (beer lost).   Substituting even a portion of the hop pellets (typically 50% or more substitution from pellets) to Hopzoil will commonly yield the brewery with thousands of dollars of additional revenue per small batch.  

While the company has been a Broker/Dealer for most of its history, the real growth is in Hopzoil, which is up nearly 100% YTD over 2022. The Craft-style segment has seen a significant shift away from hop pellets from 2021 to 2022, where the usage of hop oils of all types grew nearly four-fold, with the primary reason given as economic efficiency.  Inflationary pressures have actually worked in favor of forcing adoption of more efficient ingredient formats.

The original Proof of Concept for Hopzoil was achieved through small, nimble and experimental Craft breweries in the U.S., allowing the Company to evolve the format into what is now a stable, water-soluble, highly concentrated hop oil.  There are numerous "hop oils" on the market, but they are all extracted from dried hops.  Hopzoil is unique among all hop oils worldwide in its raw ingredient...fresh, wet hops that come ripe from the field, and a different extraction process...steam-distillation. The de facto standard is dried, processed hops utilizing CO2 super-critical extraction.  Hopzoil's raw ingredient and process yields an intense sensory profile that is highly concentrated, compared to the relatively bland competitors.  It is not unlike comparing fresh basil to dried basil in cooking.  There is no comparison, and while the company enters the discussion on economic terms, Hopzoil is most often selected as the hop extract of choice based on the brighter aroma and flavor vs. competitors.  

In 2022, GHR saw a shift in the size of its customers, as larger clients began using larger volumes.  Today's customers include subsidiary brands owned by ABInBev, MolsonCoors, Carlsburg, and some of America's largest independent Craft-style breweries.  The Company's largest markets are currently Brazil and Europe.  Having exported to over 50 countries, GHR was awarded the prestigious SBA national Exporter of the Year  in 2022.

In early 2022, the U.S. hop industry trade association presented findings that created a baseline for Greenhouse Gas Emissions  (GHG) that tracked hops from emergent in the field, all the way through harvesting, drying, processing and packaging.  GHR was able to determine using that baseline GHG formula, that the production of Hopzoil emits 46.7% fewer Greenhouse Gas Emissions than traditionally processed hop pellets, underscoring sustainability for global beer and brewing companies who are striving for a Zero Carbon Footprint in the near future (but are frankly uncertain how to get there)

Besides the global Craft-style brewery segment, the Company is also seeing growing adoption by other beverage segments (including Non-Alcoholic beers, Hop Waters, Hopped Seltzers (both soft and hard), and CBD and THC-infused beverages desiring the fruity aromatic hop aroma and flavor afforded by hops).  Because Hopzoil is comprised of pure, naturally-derived terpenes, the product is also being tested in nutraceutical, dietary supplement and cosmetic industry segments.  Multiple international flavor houses are now taking on Hopzoil as a new, innovative flavoring for a variety of food and beverage applications.

Founded in 2012 by Tom Britz, a career business development specialist, the Company's management includes COO Todd Malo, who has a chemistry background and was a commercial brewer himself for 14  years.  Todd was also CEO of an herbal extract supplement company prior to joining GHR.  Sales & Marketing Manager Kelly Pris, has 13 years experience in marketing nutritional supplements and herbal extracts and heads up the sales team, including a network of 30 Distributors from around the world.  

In 2022, the Broker/Dealer segment represented 47% of the Company's gross revenue, which is expecting to decline as a percentage of the total to 27% by 2027.  GHR owns a proprietary hop variety (think Honeycrisp in apples), called Ahhhroma™ which is being grown exclusively in Montana for the Company.  With nearly 100 brewery collaborations in its launch so far, Ahhhroma (in the traditional standard pellet format) are being distributed and used in beers in Australia, Brazil, Finland, France, Norway and Poland.  The largest brewery in Finland is now using it in a Cold IPA production beer launched in early 2023.  A Carlsberg-owned brewery in Norway launched a similar beer to rave reviews in February.    

Gross margins for the Broker/Dealer operation average 18%, although Ahhhroma enjoys a 40% to 50% gross margin.  By contrast, the Hopzoil segment enjoys average gross margins from 42% to 54%.  

Pitch Deck is available upon request.