Hope For Hops: Industry Paper Explores Long-Term Opportunities For Taranaki And New Zealand Growers In The Global Market

Taranaki regional development agency, Te Puna Umanga Venture Taranaki, has released an Industry Paper that provides advice to small and independent hop growers across the country looking to scale up from pilot scale plots to financially viable hop gardens.

The Paper, part of the Branching Out project, has been commended and endorsed by Hāpi, a New Zealand-based hop breeding and market development programme.

"The Hāpi Brewing Success programme, through the collaborative efforts of Freestyle Hops, Garage Project, and MPI, is keen to see the hop industry thrive. This Guidance Document by Venture Taranaki represents a step towards that goal, offering a resource we hope will be valuable for growers," says David Wright Chair of Hāpi Brewing Success.

The paper takes a pragmatic look at the hops sector and combines desktop research and industry engagement with a range of industry participants, including NZ Hops, Freestyle Hops, Hop Revolution, Pikimai Hops, Garston Hops, Nelson Lakes Hops, Kono, MPI, NZTE, Plant and Food Research, Lincoln University, and brewers, among others.

The paper includes a timely update on the state of the hop sector, snapshot data, steps on how to scale up, paths-to-market guidance, growing advice and information on hop varieties.

Key takeaways include:

- The rapid growth of the craft beer market, both locally and globally, is considered to have peaked following the boom period between 2010 and 2020. This resulted in an increased supply and left the hops market to be "production led".

- Inflation and a generally weak economic environment have 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, i.e. when will competition and attrition within the industry correct the oversupply, and price trends start curving upwards again? A natural correction could take between 18 months to 4 years, according to some industry participants.

- Buyers will continue to favour growers who can offer consistent, high-quality products (including packaging), particularly in this downturn cycle.

- Taking a long-term view, there is an opportunity for Taranaki and New Zealand growers to claim more of the global market (currently around 3%, up from 1% in recent years), by producing high-quality product, unique flavour profiles, and developing supply chain efficiencies and processing innovations.

- Growers scaling up from pilot plots will need to find export markets (just one hectare of hop plants will produce (on average) approximately 1,800kg of dried hops / 1,700kg of T-90 pellets, which is considerably more hops than most small New Zealand breweries use in a year.

The Industry Paper complements the regional development agency’s existing Branching Out Hops Blueprint, produced in 2022.

"Despite the challenges the hop 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," says Kelvin Wright, Te Puna Umanga Venture Taranaki Chief Executive.

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 prior to harvest.

One of those buyers, Taranaki-based Shining Peak Brewery, is using Riwaka grown by Wayward Hops for a second year.

Head brewer at Shining Peak Brewery, Jesse Sigurdsson, is proud to showcase local hops. "The Riwaka grown by Wayward Hops provides amazing passionfruit and guava character to our Oapui Road Fresh Hop Pilsner," says Jesse. "It has a hint of diesel character, common with Riwaka, although the local hops are a lot more restrained than the Riwaka grown in the Tasman district. The beer itself is super fresh and clean, with a low bitterness level."

While such localised wins are encouraging, there are larger aspirations for the work being done in Taranaki.

"There's an opportunity for us to showcase our local provenance stories on a global stage," continues Kelvin. "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."

There is exciting growth overall in the Taranaki food and fibre sector and there is significant opportunity to leverage the region’s highly productive land. This is coupled with a strong alignment of skills in the processing and manufacturing space, critical for the development of the sector.

Since 2020, Branching Out has identified, investigated, and validated over a dozen diversification opportunities and high-value food and fibre ventures for the region. The project’s vision is to ensure the long-term sustainability and resilience of the food and fibre sector in Taranaki and the communities it supports. Besides hops, other crops of interest include gin botanicals, hemp, medicinal plants, and grains, legumes and vegetables for incorporation in a sustainable crop rotation.

Read the Branching Out Hops: Scale up Opportunities Industry Paper here.

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