GRAND RAPIDS, MI — A West Michigan economic development agency has landed $20,000 from the state to study expanded cultivation of Michigan-grown hops as a way to boost the booming craft beer industry’s supply chain in state.

Rick Chapla with The Right Place Inc. of Grand Rapids said the state money from the Michigan Economic Development Corporation is expected to arrive in the coming weeks under the framework of developing regional collaborations.

To that end, Chapla and the Right Place have been working on the creation of a new statewide cooperative organization among growers of hops that will help institute across-the-board quality standards for cultivation of the crop.

The group includes representatives of from the Michigan Brewers Guild, as well as hops farmers from the northern, mid and West Michigan regions, Chapla said.

Hops, or Humulus lupulus, is a perennial vine that contributes aroma and bitterness to beer. It is an essential ingredient in the brewing process and is especially prevalent in styles like pale ales or IPAs.

In the last five years, cultivation of hops has grown from nothing to about 200 acres this year at five facilities around the state. That’s a drop in the bucket compared to Pacific Northwest states like Washington, Idaho and Oregon, where more than 30,000 acres of hops are in production.

Michigan currently ranks fifth in the nation in terms of total breweries in state and the vast majority of brewers here source their hops from those states.

With the yet unnamed group, Chapla said the Right Place hopes to "multiply the economic consequences of craft brewing" and keep more supply chain money in the state. The organization efforts have grown out of a statewide craft beer symposium that took place a year ago in Barry County.

“We hope to accomplish one statewide organization that will provide a standard of quality at the right quantity and price so the craft brewers will expand their purchase of Michigan hops,” he said.

More on Michigan hops

Related: More entrepreneurs, farmers growing the plant for Michigan beer

Related: Traverse City brewery inspires beer-friendly tweak to Michigan agriculture guidelines

Michigan Hop Alliance

Breweries in Michigan have shown willingness to buy local product. Hop Head Farms owners Jeff and Bonnie Steinman, of Plainwell, opened their 15-acre hop farm in Hickory Corners in 2012 and have seen demand exceeding their supply.

Bell’s Brewery of Comstock Township purchased all of Hop Head Farms' supply of Chinook hops, one of six varieties grown on the farm, in September. The hops were used in used in Bell's Harvest and Christmas ales.

Mike Stevens, president of Grand Rapids-based Founders Brewing Co., said the brewery is planning to buy more Michigan grown hops, but the bottom line for him is the quality factor. Founders sources Centennial hops from Washington for its year-round best selling Centennial IPA.

“We will (buy Michigan hops) as long as the quality is there and they are competitive on price,” he said.

Founders Brewing Co. Centennial IPA.

Breweries like Founders often buy hops without knowing exactly how much they will need, and sometimes over-buy just to ensure they have the supply to match demand for the beer.

Stevens said the cost savings for brewers would likely come on the transportation side because the smaller volume of Michigan-grown hops make it harder for farmers to compete on price with the Pacific states due to the economies of scale factor.

“Where the dust settles in terms of who is going to be more cost effective, I cant say at this point.”

Bonnie Steinman, a member of the infant organization’s steering committee, said the cooperative organization is still in its infancy, but she sees promise for building a strong foundation that can have a greater voice in Lansing.

The goal at the moment is to get everyone moving in the same direction, she said. Disparate attempts across the state “doesn’t do us any good,” she said.

“We need to get together and form something that has a good reputation and is a source for research and developing new varieties and cultivating things specific to our region,” she said.

She said the organization could also help interested farmers understand the investment they would be undertaking.

Hop Head Farms is investing $1.4 million in a project this year to add a second facility to house equipment and store pellitized hops, which can be stored for longer periods of time, making them viable for long transport and more useful to brewers.

Fresh, or “wet” hops, must be used shortly after harvest in short shelf life harvest ales.

“We’d like to have a good, strong industry that puts out top notch hops,” Steinman said. “We can do it here and they might even be better than the Pacific Northwest, but it needs to be organized.”

Email Garret Ellison or follow him on Twitter.