Prime Movers sector report: Hops

By JANET TYSON

The schoolboy who hurried home to hand-pick hops by the bushel grew up to become the man who markets New Zealand's high-tech hop products around the world.

For more than 40 years, Tom Inglis' career has been entwined with the fortunes of Humulus lupulus, the hop plant. In four decades growers have reinvented the industry as a high-value niche exporter.

In the year to April, nearly 800,000kg of hops were harvested from 400ha in the Nelson district. Ninety per cent of them were exported, earning close to $8 million.

They're drinking beer made with our hops in the United States (Coors), Canada (Molsens), Sri Lanka, Vietnam, Indonesia, New Caledonia - altogether some 50 countries.

Guinness, that most Irish of icons, has New Zealand hops in its blend. Japan's top brewery, Kirin, is featuring a special brew made with New Zealand hops, and Inglis has just been talking hops in China.

Green Bullet, Super Alpha, Pacific Gem and Hallertau Aroma - some of the 12 New Zealand-developed varieties now being sold - are renowned for their aromatic qualities as well as for the high alpha acid component that "bitters" the brew.

Brewers are learning to like dual-purpose hops, though as Inglis says, "Selling hops to a brewery is like getting picked for the All Blacks."

Major beer brands are as much part of a national psyche. Wooing the brewers to include new hops in their blend is a long process.

"Instant success in this business can take 15 years," Inglis says. "As Coca Cola found when they tried a new formula, people can be totally turned off by what might be seen as slight differences in taste."

His beer-tasting palate is just as attuned to subtle flavour notes as any wine judge, tea or coffee taster, and is as rigorously tested by potential buyers. He often brings overseas brewers and buyers to the Riwaka-Motueka hop gardens.

"The one-on-one approach is essential," he says. "We got our first sale to a brewery outside New Zealand when I called on Japan's Asahi brewery. We got on well, though our only common language was scientific calculations of hop aromas. We've been supplying them for 20 years now."

Inglis thinks master brewers should be as revered as top winemakers are for their skills. "Because their drinkers demand absolute consistency, a brewer's job is much harder. Month to month, year to year, the brew must taste the same. A winemaker has the luxury of giving each year a special vintage."

When Inglis was "born into hops", the industry was more widely spread around Motueka and Riwaka, where families from Germany and England settled in the 1840s to grow both hops and tobacco. Tradition is still strong, though only 20 growers remain. The business is tightly held by a few families, with grandparents, parents and children all involved.

"Hop growing would only just stack up against other land uses in returns. But no-one's complaining," Inglis says.

When Inglis picked his first hops he was paid nine pence a bushel, and worked with his own small picking bin. During harvest, in late February-March, the hop fields teemed with people. The labour-intensive process started by cutting down the hops using a "cat", a hook on a long pole. Hops were picked by hand into wooden or sacking bins, with top workers picking 120 bushels a day. The hops were then dried in conical kilns known as oasthouses.

Today, picking is highly mechanised, capital-intensive and expensive. The hops, too, have been transformed, thanks to a world-leading plant-breeding programme that continues today. The earliest hops planted in New Zealand were vulnerable to black root rot.

"One very bad year, 80 of 83 plants in each row across our family hop garden got root rot and had to be replaced," Inglis says.

Dutch plant scientist Dr Rudy Roborgh led the hop revolution. He came to the New Zealand Hop Research Station at Riwaka from wartime internment in Indonesia. Roborgh crossed local hops with rot-resistant older European stock, developing new varieties such as the world's first triploid hops, to meet the call for a seedless variety.

So successful were the new hops that "we almost bred ourselves out of business." The quest for improvement lifted the alpha acid content of the hops from 5 to 15 per cent.

"I can still remember, as a young man, the day when the chairman of the New Zealand Brewers' Association, Walter Otto, told us they would buy less than half as many hops to do the same job," Inglis said.

For the hop business, it was export or die. Grower numbers had already been pared back by what were then booming opportunities in tobacco. Only a core group, with frostier land not suited to tobacco, stuck with hops. Among them was Inglis. "Young and silly enough to think anything was possible, I put my hand up to do the marketing, something I knew nothing at all about."

The earliest exports in the 1980s, bulky bales of hops, passed over the profit to the German merchants who sold them.

Then came the fortuitous visit of some Lincoln College students on practical experience. Bob Diprose, later to head the poultry industry, suggested to Inglis that he should try for a Lincoln Foundation Scholarship to further his marketing skills. To his surprise, the foundation agreed to a modified programme, and in six weeks Inglis and the then Hop Growers chairman Joe Hill did a whirlwind tour of all the world's significant beer-brewing areas - except Czechoslovakia, then behind the Iron Curtain.

Hill's mature perspective counterbalanced Inglis' youthful enthusiasm, but for both men the technology being used was an eye-opener. "It was a whole different world, with coolstores, pellet mills, vacuum packing," he says. Pelletisation dramatically reduced the unmanageable volume of the raw hops, making it a much more economic proposition for an exporter.

So the hop growers of Motueka built a pellet mill. Led by Bruce Eggers, a hop farmer "with a good engineering brain," they converted an imported German lucerne pellet mill, found in Wanaka, to process hops. "We all worked on it, voluntarily, co-operatively. We've always worked that way," Inglis says.

Other technologies have since been developed. Vacuum-packed hops are commonly used, but a microdrying venture creating hop "tea bags" was less successful. Packaging methods continue to be part of grower-funded research. Organic hops are a small but growing niche.

And the quest for maximum value from minimum volume took a major step forward last year, with the commissioning of a supercritical extractor. The extractor reduces hop pellets to essence for beer. A bale of hops can be contained in a jar of a golden liquid that looks like honey. To meet overseas customer demand, half of exports are now in extract form.

Hop growers own the extractor as a joint venture with New Zealand Extract Solutions Ltd, and the business has just appointed its first chief executive. But, typically, it was a hop grower (and science graduate), Kim McGlashan, who oversaw development of the highly sophisticated plant.

While hop growers are the major users, even producing extract from hop material sent here from overseas, the equipment has huge potential. As it uses carbon dioxide, rather than solvents, for extraction the process is ideally suited to "natural" products. Hops themselves are being investigated for their medicinal potential; for instance, women working with hops seem to suffer fewer menopause symptoms.

Oils can be extracted from seeds or other products, and a variety of nutraceutical products. Potentially, the extractor can be used to decaffeinate coffee or de-cholesterol products. Developments like this are essential. The hop industry has to keep running to keep up. Growers were too busy to stop for a beer to mark the passing of the Hop Marketing Board, which gave way to the new New Zealand Hop Marketers Ltd on August 1. Like the producer board before it, the new company will work closely with New Zealand Hop Products Ltd, based in the same building.

Worldwide, the hop market is "seriously over-supplied," Inglis says, with major producers such as the US pulling out plantings.

"We've done well to hold our own. Through exports we have increased the value of the crop, we haven't expanded the area. We don't aim for the bottom of the market. If we keep doing things right we can stay viable and successful."

New Zealand hops figure prominently in international awards for their taste and alpha acids. Ideas for development of the hop industry continue to ferment in Inglis' head. "If this is a sunset industry," "then so is beer drinking."