New Zealand: Hop growers responding to surging demand for aroma-type hops

Nelson hop growers are responding to a surging craft beer market by planting more of the aroma-type varieties used in specialty brews, Nelson Mail reported on October, 23.

Wai-iti grower and Totara Brewing Company shareholder Peter Lines has just extended his garden by 1 hectare to 12 ha.

He's planted his new block in Rakau (named after an area near Tapawera), an old variety that has come back into favour on the back of the craft beer movement.

"It was a spur of the moment decision - I had the opportunity to get the posts, plants became available and I've got plenty of ground."

Mr Lines was one the early growers to make a switch from commodity hops grown for their alpha acids, which give beer its bitterness, to specialty hops grown primarily for their flavour.

"I've taken a risk over the last few years by putting a lot of newer ones in."

Now three-quarters of his crop is in aroma varieties and it is paying off.

He sold all his hops this year and has pre-sold next year's crop "and that's pretty good in today's horticultural climate".

While the exchange rate will ultimately decide how much profit he makes, he is confident the Nelson-based industry has laid the framework for steady growth.

"The craft beer revolution is here to stay."

As well as attracting a wider range of clients and a bigger market share, New Zealand hops are benefiting from a reputation for quality, he says.

Motueka's Kim McGlashen, one of the region's biggest growers with about 70 ha, agrees the prospects look good.

He's just finished planting another 6 ha, most of it in Motueka and Nelson Sauvin, two varieties in high demand.

Most of it is in gardens which have been idle for a year or two as growers reacted to a world oversupply of commodity hops by cutting back production.

Like others he has been progressively switching out of alpha hops into aroma types, part of long term strategy by grower co-operative NZ Hops.

He says the decision they made in the 1990s not to follow the herd but to focus on producing hops with a difference is now reaping dividends.

Growers had endured a roller-coaster ride in the past by relying on the commodity trade, but Mr McGlashen says he is optimistic that growth in the craft beer market has some years to run.

"Projections worldwide show the trend is still in its early days."

Mr Lines says demand for Nelson Sauvin, a dual-purpose hop which has doubled in production in three years, is so strong it is likely to be sold out for the next five to six years.

Ad Feedback NZ Hops chief executive Doug Donelan says most planting involves growers switching over to newer, more popular varieties in existing gardens because it cost up to NZ$35,000 per hectare to put in new gardens.

"Expansion is costly because land values are quite high in this region and a fair bit of infrastructure is required."

This tends to deter newcomers but existing growers are looking at leasing land or converting apple orchards as the industry still has capacity to pick and process more hops, Mr Donelan says.

He expects the total area under production to rise from 350 ha to 400 ha over the next two to three years, and crop volume to jump from 700 to 1000 tonnes over the next five years.

To cope with a bigger crop, NZ Hops plans to expand its cold storage facilities at its Appleby base. Mr Donelan says the NZ$1.8 million project is expected to be completed in time for the 2014 harvest.

He stresses that the co-operative isn't relying only on the craft beer market for growth.

"We still have major mainstream customers in the US who are a substantial part of our business."

24 October, 2012