An Interview with Crooked Yard Hops: Supplying the Craft Beer Industry

Seeing the rapid growth of the craft beer industry, Jake TeSelle started farming hops in 2015. At the time, breweries were growing faster than the supply chain. Jake’s one-acre farm quickly transitioned from six to 12 to now 17 acres through a combination of grant money distributed by the Montana Department of Agriculture and the business’s own revenue growth.

Crooked Yard Hops now works with 18 breweries in Montana and another 40 around the country. I interviewed Jake to get his take on starting a farm, growing in scale, and how to operate as a little guy in a big market.

1. How did you conceive of the initial idea behind your business?

“During my sophomore year of college, I worked at an internship in California for a company that was doing physics research. All of the engineers there were super into craft beer, and one of the engineers had a little quarter-acre hop farm that he would go to on the weekends and used to sell to local breweries. I’d never even heard of hops at the time — I was only 18 or 19 years old then, and so I started wondering more about craft beer and what it’s ingredients were. I knew that barley was in beer, but I hadn’t heard of hops. And so, that stayed in the back of my mind following the summer.

I went back to the same internship in my junior year of college, staying much longer-term that time. I really got my hands dirty learning about what engineering was. I lived the big city life, and I was working full-time, staring at a computer screen all day, and that really didn’t appeal to me the same way it had before.

I grew up farming, so at the end of that internship, it was a wake-up call. I realized I needed to get back to the farm, that I needed to figure out a way to make money at farming. And I thought: What’s something small that’s high value?

I looked at doing garlic. I looked at hydroponics. I looked at vegetables and organic. I looked at all of this stuff and then I started looking into the hops thing. And that was really interesting. It seemed that there was a growing scene that had really started in 2012, so I was about three years behind the curve but Montana’s luckily around 10 years behind the curve. So when I fully committed to that route, we were the second hop farm in Montana and quickly became the largest.

It all really fell into place. Initially, I’d thought: Okay, I still have my engineering degree, I still have a job offer in California. Let’s just give this hop farm a summer and see where it really goes.

As it gained more and more traction, it seemed daily that brewers were starting to take it more and more seriously. And that’s when I realized that it could be more than a hobby, that it could be more than just something fun. I realized I could actually make some money doing this.”

2. What’s the best piece of advice you were given when starting out?

“I initially approached the LaunchPad about how to do sales: What’s the most effective way for me to get in front of customers and make money off of this thing? We were able to build the farm and grow it, how do we sell it?

After talking to Les Craig [the Director of the Blackstone LaunchPad at the time], we hung out for a day or two at the LaunchPad and we ran through all the numbers and that was when initially Les said: You need to ramp this up. If you can figure out how to sell it, your demand is gonna be here and your supply is gonna be here.

Les was the one that initially connected us with the state and helped us get our first grant. He helped us put together business plans and our presentation for the grant committee. He helped us practice the presentation. On and on and on, the LaunchPad was just connecting dots for us.

So, working with somebody that understood business, working with the LaunchPad, that was for sure number one because I was so clueless then. I was trained as an engineer, so I knew how to put together what we call a bill of materials, or a list of things we would need. That was pretty straightforward, being able to source and quote equipment. So coming up with basically a shopping list of stuff that we would need wasn’t super hard for me, but then actually looking at that and deciding whether to get investors or go to the bank — being able to look at that and then approach investors and negotiate effectively, those were things that I was just clueless about. The practice and the advice from people that had been there before were super, super helpful.

Reading was also super beneficial. Les kept shoveling books onto me. Anything from How to Win Friends and Influence People to Zero to One to The Inevitable to Built to Last, all of these business books helped a ton. I was reading almost a book a week, just trying to sponge up all the information about the business ways of thinking.

Since then, we’ve also worked with Trevor Huffmaster [the current director of the Blackstone LaunchPad] and 406 Labs. We were part of that first cohort with 406 Labs. That helped a lot with our marketing and branding, just getting a really clear, cohesive sales funnel going and keeping customers coming back.”

3. What’s the hardest challenge you have faced while starting up?

“Looking back at it, it’s hard to imagine how we did any of this. It’s like none of this makes any sense. At the time, when I started the business, I was 20. I look back and wonder: Why were these breweries taking a 20-year-old kid with one acre of hops seriously? Why in the world did they do that?

That was probably the most challenging thing. Nine out of 10 brewers did not take us seriously but as soon as we found the 10 percent who did, then it was easier to get the rest on board. As soon as we had our first crop and our second crop and our third crop, as soon as we had a track record, then that flipped, and everyone took us seriously. That first hurdle of getting not just the breweries but even my parents to take the business venture seriously, getting investors and the state, getting anybody to take it seriously was tough.

That was one of the things I took away from one of the books that Les had me reading. I can’t remember what book it was, but it was all about portraying yourself as bigger than you are. And that was the first thing we did. I made a website, a business page, we had business cards made, and a professional email address. As soon as we had business cards, we felt great being able to walk up to anyone and give them a card. That felt like a pretty official move. Just little tiny steps like that. We had our logo embroidered onto some sweatshirts. Just portraying the business as more legitimate than maybe it was, that helped people to take it seriously.

It became just writing down these absurd checklists too. We did the business model canvas 30-some times. We had our list of things to do, our list of ways to accomplish those things, and every day, whether making phone calls or sending emails, any small thing that we could chop away at helped the project.”

4. Name the biggest overall lesson you’ve learned during the process.

“It’s going to take a lot longer than you think it’s going to, and it’s going to be three times more expensive than you think it’s going to be. When we initially started, the plan was for it to be one acre. And then, the plan became for six acres and then for six more acres and then for four more acres, and now we’re at a point where it’s like okay, we actually have to stop.

The initial cost of things, I think we had about 50 grand invested in the business and we thought: Okay, this is perfect, this is solid now. And I think now we have closer to $250,000 invested, and so it was five times more expensive to build it out than I thought it would be. And, you know, it’s taken a lot longer.”

5. You’ve heard of celebrity crushes, who’s your entrepreneur crush?

“There’s a really cool hop farm out in Oregon that I think is awesome. It’s called Crosby Hops. They have a pretty similar story to mine, but they’re just on a totally different level. They have, I think, 400 acres right now, so they’re massive. Any time I see them doing something cool, I try to replicate it because it works so well for them. Their methodology of customer service, super high quality, and competitive pricing are amazing. They do lots of drone footage of their hops farms, and lots of promotional giveaways, and lots of collaborations. I’ve been out to tour their facility, and they’re super nice. They’ll tell you anything you want to know.

The whole industry, the entire craft beer industry, is so, so collaborative and friendly. Everybody knows each other. It’s a pretty small world. Coming from engineering, that was pretty cut-throat. I’ve never worked in or seen an industry like it, where everybody is on the same page and friendly.”

Crooked Yard Hops is always looking for help on the farm. For anyone who’s interested in agriculture and wants to learn more about farming, contact Jake TeSelle at crookedyardhops@hotmail.com.