E-Malt.com News article: The Czech Republic: Foreign demand and new niche markets present opportunities for Saaz hops

Czech producers of genuine Saaz hops are taking an upbeat attitude at harvest time as foreign demand and new niche markets present opportunities they hope will offset challenges caused by European agricultural policy and bad weather, The Wall Street Journal reported on September 6.

China, now the world’s largest beer market, has recently become the second-largest importer of Czech hops, a crop that has been a part of the country’s culture and economy since at least the 10th century.

As increasingly affluent Chinese consumers seek western-style luxury items such as quality beers, sales there of the premium Saaz hops, which Czechs call “green gold,” are rising fast, according to Zdenek Rosa, chairman of Bohemia Hop, a wholesale exporter of the traditional commodity.

Additionally, all major Japanese brewers continue to use genuine Czech hops for their premium brews, though export volumes have waned slightly in recent years in part because of the country’s economic malaise, he said. Still, the island country remains the single largest export market for its Czech hops, Mr. Rosa said at a conference outlining the results of this year’s harvest.

Hiroo Matsui of Suntory Liquors Ltd. beer development division, who was in Prague to participate in Europe’s biggest hops harvest festival this weekend, said that while Suntory could use cheaper foreign variations of Saaz hops, it won’t, even if that requires the brewery to pay a top-shelf price.

“We use [genuine] Saaz hops because they have a mild flavor, not bitter and not too strong, and the aroma is also mild. And in the future we want to continue using good-quality Czech hops for our premium products,” Mr. Matsui said.

Suntory has 14% of Japan’s beer market, placing it third behind Asahi with 37% and Kirin with 35%.

Saaz are “fine aroma” type hops, used to impart a mild yet distinctive aroma that gives lager (also called pilsner) beer its distinctive bite. This particular variety is native to the Czech city of Zatec, called Saaz in the German language, located about 50 miles north-west of Prague, and has been cultivated there for at least half a millennium.

Saaz is a “noble variety” of hops, meaning it is low in bitterness, high in aroma and traces its lineage to wild hops rather than modern cultivars. But such pedigree results in lower yields per hectare when compared with other modern varieties, so Saaz hops, called “Žatecký poloraný červeňák” in Czech, remain a premium-priced ingredient for brewers.

In European markets closer to home, Czech hops producers see opportunity in catering to organic food markets.

Last year local growers produced their first commercial harvest of bio-hops, which due to more rigorous growing, verification and marketing conditions, can sell for two to three times the price of standard hops of the same variety.

Despite its glowing performance so far, long- and short-term challenges could yet imperil the sector.

The European Union’s Common Agricultural Policy presents a problem for Czech hops producers as they get on average between 30% to 40% less in EU subsidies per hectare than do their German peers, who are also their biggest competitors, said Bohumil Pazler, chairman of the Hop Growers Union of the Czech Republic.

“We’d be happy if there were no subsidies at all. Then it would be an even playing field and we’d be much better able to compete [with German peers],” Mr. Pazler said.

And after unseasonably cold weather last year destroyed some crops, followed by this year’s floods that wiped out more fields, capital expenditure in the sector this year is double last year’s level, Mr. Pazler said.

The Czech government can provide only a fraction of the financial support local growers need as the state budget has been steadily down-sized for the past three years due to fiscal austerity and as domestic subsidy programs have been scaled back.


06 September, 2013