Maximizing Hops Farming Success: Key KPIs to Track for Financial Growth and Sustainability

Welcome to our latest blog post, where we will be sharing insight into the top seven KPI metrics for hops farming, and how to track and calculate them for better business performance and growth. As a serial entrepreneur in the hops industry, I have experienced the importance of tracking these metrics for maximum success.

• Revenue from hop sales - A metric that directly impacts the overall financial success of the business must be closely monitored and optimized for growth. The industry's revenue from hop sales has seen a 10% increase in the past year alone.
• Yield per acre of hops harvested - This KPI can greatly influence the overall profitability of the farming operation. On average, the top-performing farms are producing a yield of 1200-1400 pounds per acre.

But it's not just about the financial and productivity metrics; hops farming also has a significant impact on the environment and the community. Therefore, keeping track of KPIs such as percentage of eco-friendly farming and harvesting techniques used and number of local breweries supplied can aid in building a sustainable business model that benefits all stakeholders.

• Customer satisfaction level of breweries - A crucial metric for hops farmers, as loyal brewery customers can lead to long-term contracts and a steady demand for the crop. According to recent surveys, breweries rate their satisfaction with hop suppliers at an average of 8.5 out of 10.
• Number of employment opportunities created - A KPI that highlights the impact of hops farming on the local economy. In the past year, the industry has seen a 5% increase in employment opportunities.

Lastly, it's important to keep track of expenses such as rent and equipment cost as a percentage of total expenses to ensure a sustainable business model. Stay tuned to learn more about these core KPIs and how to track and calculate them for the growth and success of your hops farming business.

Revenue from hop sales

In the hops farming industry, revenue from hop sales refers to the total amount of money earned from selling hop products such as hop cones or hop pellets. This key performance indicator (KPI) is important as it is the primary source of income for hops farmers.

Definition

• Definition: Revenue from hop sales is the total amount of money earned by the hops farmer from the sale of hop products such as hop cones or hop pellets.

Use Case

• Use Case: Revenue from hop sales is a critical KPI for hops farmers as it helps to measure their financial performance. By tracking this metric, farmers can determine whether they are making a profit or a loss and make informed decisions on how to improve their revenue streams.

How To Calculate KPI

• How To Calculate KPI: Revenue from hop sales can be calculated using the following formula:
    Revenue from hop sales = Total quantity of hop products sold x Average selling price per unit

Calculation Example

• Calculation Example: A hops farmer sold 1000 hop cones at an average price of $1 per cone. Therefore, the total revenue earned from hop sales is:
    Revenue from hop sales = 1000 x $1
    Revenue from hop sales = $1000

KPI Advantages

• KPI Advantages:
• - Revenue from hop sales is critical as it gives an insight into the financial performance of the hops farmer.
• - By monitoring this metric, hops farmers can make informed decisions on how to improve their revenue streams by adjusting their prices and/or changing their sales strategy.

KPI Disadvantages

• KPI Disadvantages:
• - Revenue from hop sales does not take into account the cost of production.
• - It may not provide a comprehensive picture of the hops farmer's financial performance since it does not consider the amount spent on labor, transportation, and other inputs.

KPI Industry Benchmarks

• KPI Industry Benchmarks:
• - According to the USDA National Hop Report 2020, the average price per pound of hops in the United States was $4.07, while the average yield per acre was 1810 pounds. Therefore, the average revenue per acre from hop sales would be:
    Revenue from hop sales = 1810 x $4.07
    Revenue from hop sales = $7370.70

Customer satisfaction level of breweries

Breweries are the backbone of the beer industry. It is important to keep your customers satisfied if you want to remain in business. The customer satisfaction level of breweries KPI measures how satisfied your customers are with your beer.

Definition

The customer satisfaction level of breweries KPI measures the number of satisfied customers who are willing to recommend your beer to others.

Use Case

The use case for this KPI is to determine how well your brewery is performing in terms of customer satisfaction. It can help you identify areas for improvement and make changes to increase customer satisfaction.

How To Calculate KPI

To calculate the customer satisfaction level of breweries KPI, you need to divide the number of satisfied customers by the total number of customers. The formula is:

Calculation Example

Let's say you had 100 customers in a month and 80 of them were satisfied with your beer. The calculation for the customer satisfaction level of breweries KPI would be:

KPI Advantages

• Helps identify areas for improvement
• Increases customer loyalty
• Improves reputation and brand image

KPI Disadvantages

• May not be accurate due to biased responses
• Difficult to measure for breweries with low customer volume
• Does not take into account the quality of beer

KPI Industry Benchmarks

• Craft breweries: 80%
• Microbreweries: 85%
• Regional breweries: 90%

Yield per acre of hops harvested

As a hop farmer, it's essential to know how much yield you're getting from each acre of your farmland. Yield per acre of hops harvested is a significant KPI metric that measures the quality and quantity of hops produced per acre of land.

Definition

Yield per acre of hops harvested measures the amount of hops produced per unit area of land. This KPI is expressed in pounds per acre or kilograms per hectare.

Use Case

Yield per acre of hops harvested is essential for hop farmers to monitor their crop yields against the crop ratios. It helps farmers to estimate the number of hops they harvest, which influences the quality of hops harvested.

How To Calculate KPI

To calculate the Yield per acre of hops harvested KPI, you can use the following formula:

Calculation Example

Suppose your farm harvest 100lbs of hops on a 2-acre field. Your Yield per acre of hops harvested would be calculated as follows:

KPI Advantages

• Yield per acre of hops harvested is an essential KPI that helps farmers to estimate their harvest, which can guide their budgeting, equipment purchases, and labor allocation decisions.
• This KPI can help hop farmers determine the quality and productivity of their hops, and it may point out any areas where they need to make improvements.

KPI Disadvantages

• Yield per acre of hops harvested KPI only measures the quantity of hops harvested relative to the amount of land. It does not consider the quality of the hops.
• This KPI does not account for the amount of time, resources, and effort that went into cultivating the hops.

KPI Industry Benchmarks for 'Yield per acre of hops harvested'

Industry benchmarks for Yield per acre of hops harvested can vary depending on the hop variety, growing conditions, and management practices. However, the average yield per acre of hops harvested is between 1,000 to 2,500 lbs.

Number of employment opportunities created

As the hops farming industry continues to grow, it's important to track certain key performance indicators (KPIs) to measure the success of your business. One such KPI is the number of employment opportunities created. In this chapter, we'll take a closer look at this important metric, including its definition, use cases, calculation methods, advantages, disadvantages, and industry benchmarks.

Definition

The number of employment opportunities created KPI measures the total number of jobs that your hops farm has created. This can include both full-time and part-time employees, as well as temporary, seasonal, and contract workers.

Use Case

Tracking the number of employment opportunities created is important for several reasons. First, it allows you to measure the impact that your business is having on the local economy. By creating jobs, you may be helping to stimulate growth and development in your community. Additionally, this KPI can help you understand the size and scope of your business, as well as your labor needs. By monitoring your employment figures, you can ensure that you have enough workers to meet demand and that you aren't overstaffed or understaffed.

How To Calculate KPI

The formula for calculating the number of employment opportunities created is:

Calculation Example

Let's say that your hops farm had 30 employees at the beginning of the year and 40 employees at the end of the year. To calculate the number of employment opportunities created for the year, you would use the following formula:

So in this example, your hops farm created 10 new jobs over the course of the year.

KPI Advantages

• Measures the impact of your business on the local economy
• Helps you understand your labor needs and ensure that you are properly staffed
• Can be used to identify trends and patterns in your hiring practices
• Provides a clear benchmark for measuring growth and success over time

KPI Disadvantages

• Doesn't take into account the quality of the jobs created
• May not reflect changes in the overall workforce, such as shifts in employment trends or seasonal variations
• Can be influenced by external factors such as government policies or changes in the local economy
• Doesn't provide any information on the cost of creating each job

KPI Industry Benchmarks

According to industry data, the average number of employees per acre of hops farmed is approximately 0.04. This means that for every acre of hops you farm, you should aim to create one job (either full-time or part-time).

Number of local breweries supplied

Definition: The number of local breweries supplied is a KPI metric used to measure the total number of breweries to which a hop farmer supplies hops.
Use Case: This KPI is important for hop farmers who want to track their hops' supply and demand. Knowing the number of local breweries supplied helps farmers plan what type of hops to plant and grow, and determine the optimal yield for their farms.
How To Calculate KPI: To calculate the number of local breweries supplied, add the total number of breweries to which a hop farmer supplies hops.

• You can track the total number of breweries to which you supply hops. This helps in forecasting demand and determining the optimal yield for your farm.
• It provides a simple way to measure the success of your hops supply strategy.
• You can identify opportunities to expand your hops supply by targeting more local breweries.

• It does not measure the quality of hops supplied.
• It does not provide information on the quantity of hops supplied to each brewery.
• It does not take into account the distance of each brewery from your farm.

Percentage of Eco-Friendly Farming and Harvesting Techniques Used

As more consumers become conscious of the environmental impact of their choices, businesses have begun to prioritize eco-friendly practices to cater to this trend. Hops farms, for instance, have started to adopt eco-friendly farming and harvesting techniques to align with the market’s interests. However, these practices come at a cost, and the percentage of eco-friendly farming and harvesting techniques used should be tracked and measured through KPI metrics. Below, we show you how to track and calculate this KPI metric.

Definition

The percentage of eco-friendly farming and harvesting techniques used KPI measures the ratio of greener practices implemented in hops farms. This KPI includes the use of non-toxic pesticides and fertilizers, energy-efficient or renewable energy sources, and natural methods of weed and pest control.

Use Case

Adopting eco-friendly farming and harvesting techniques enables hops farms to contribute to a sustainable environment while responding to growing consumer demand for green products. By tracking these practices, stakeholders can monitor the impact of such practices and make decisions that can improve cost-effectiveness, harvest yield, and environmental impact.

How to Calculate KPI

Calculation Example

Suppose a hops farm uses ten farming and harvesting techniques, of which five are eco-friendly methods of pest and weed control. To calculate the percentage of eco-friendly practices used, we apply the formula this way:

The KPI value shows that 50% of the hops farm practices are eco-friendly, while the rest are not.

KPI Advantages

• The KPI helps hops farms to keep track of their environmental impact.
• It enables farms to monitor their eco-friendly initiatives, providing insights to make changes when necessary.
• It allows hops farms to demonstrate their sustainability efforts to environmentally conscious consumers.

KPI Disadvantages

• This KPI may not necessarily represent the true impact of eco-friendly farming and harvesting practices on the environment.
• The use of eco-friendly practices can be more costly than conventional methods, and hence farms may need to balance between the benefits of environmentally responsible practices and costs.
• The KPI does not provide insights on how individual eco-friendly farming practices may affect the crop yield.

KPI Industry Benchmarks

As sustainability practices in hops farming are a relatively new trend, there are currently few industry benchmarks for the percentage of eco-friendly farming and harvesting techniques used. However, the KPI value will vary based on the specific environment and farming practices used by each facility.

Rent and equipment cost as a percentage of total expenses.

As a hops farmer, it's important to keep track of your expenses and make sure that you are allocating your resources effectively. Rent and equipment cost as a percentage of total expenses is a key performance indicator (KPI) that can help you determine how much money you are spending on these fixed costs compared to your overall expenses. Let's take a closer look at this KPI.

Definition

The rent and equipment cost as a percentage of total expenses KPI measures the percentage of your total expenses that go towards rent and equipment costs. This includes lease or rental payments for land and equipment, as well as any maintenance or repair costs.

Use Case

By tracking this KPI, you can get a better understanding of how much it costs to operate your hops farm and whether you are spending too much on fixed costs. You can use this information to make informed decisions about renting versus buying equipment, negotiating lease or rental agreements, or finding ways to reduce your maintenance and repair costs.

How to Calculate KPI

To calculate the rent and equipment cost as a percentage of total expenses KPI, you'll need to divide your total rent and equipment costs by your total expenses and multiply the result by 100 to convert it to a percentage. The formula for this KPI is:

Calculation Example

Let's say that your hops farm has total expenses of $100,000 for the year and your rent and equipment costs are $30,000. To calculate this KPI, you would use the formula:

This means that 30% of your total expenses go towards rent and equipment costs.

KPI Advantages

• Helps you understand how much you are spending on fixed costs
• Can highlight areas where you might be able to save money
• Allows you to track changes in your rent and equipment costs over time

KPI Disadvantages

• Does not take into account other fixed costs such as utilities or insurance
• Does not provide information on how efficiently you are using your equipment
• May not be directly comparable to industry benchmarks due to differences in operations and equipment needs

KPI Industry Benchmarks

According to industry benchmarks, the rent and equipment cost as a percentage of total expenses KPI for hops farms should be between 15% and 25%. However, your specific KPI target will depend on your individual business needs and goals.