New Zealand: There is hope for hops sector despite downturn, report says

Budding hop growers will need to look for export markets if they want to scale up from pilot plots, a new report into opportunities for Taranaki and New Zealand growers says.

Despite a current oversupply that could take up to four years to correct, the long-term outlook for Taranaki’s hops sector is looking hopeful, an industry paper released by Venture Taranaki has concluded.

The regional development agency’s Branching Out Hops: Scale up Opportunities industry paper showed there was an opportunity for Taranaki and New Zealand growers to claim more of the global market by producing high-quality product and unique flavour profiles as well as developing supply-chain efficiencies and processing innovations.

Growers would need to find export markets given that just one hectare of plants was likely to produce 1800kg of dried hops, considerably more than most New Zealand breweries would use in a year.

After rapid growth between 2010 and 2020, the craft beer market locally and globally had peaked, which led to an increased supply.

Inflation and a generally weak economic environment have also resulted in lower growth and high levels of uncertainty in the craft brewing industry.

“This period of downturn is typical in primary producing sectors, and the million-dollar question is always: when will we hit the inflection point, ie. when will competition and attrition within the industry correct the oversupply, and price trends start curving upwards again,” the report said.

It predicted a natural correction could take between 18 months to four years.

The paper took a pragmatic look at the hops sector and combined desktop research with industry engagement involving a range of participants.

Venture Taranaki chief executive Kelvin Wright said: “Despite the challenges the hops sector is currently facing, Venture Taranaki is taking a longer-term view and approach.

“Through our strategic food and fibre initiatives, we aim to support the exploration of hops as a potential future land use and export market for the region.

“It takes time and there can be steep learning curves, but investing in work like this industry paper helps to pave the way for small-scale growers across the country.”

The paper was a resource that would be valuable for growers around the country, Hāpi chairperson David Wright said. Hāpi is a New Zealand hops breeding and market development programme.

Venture Taranaki is currently supporting two growers in the region who are scaling up their operations from trial size.

Quarter Acre Hops and Wayward Hops have recently completed harvest, with both parties having confirmed buyers for their hops beforehand.

The project is part of the Branching Out project, which was set up to identify and develop crops and products that can be produced commercially in Taranaki to diversify the dairy-dominated region.

17 April, 2024