Donelan NZ Hops

New Zealand Hops is a specialty hop producer and exporter expanding its business in a tough environment, and its products are pesticide free.

Doug Donelan, a former brewer from Australia, has been chief executive since January 2006.

The hop business was recession proof until this last year, a lot of things happened in the market all at once. We were coming off quite a solid period of demand and this was translated quite rapidly into over-supply of product.

At exactly the same time the whole world market crashed, and it changed a lot of attitudes towards premium products. What we have found that although beer itself wasnt generally hit that bad, the premium end took a bit of a hammering both in the US and Europe.

A bit of an impact, at the same time we were fortunate oddly enough, that the craft end of the market has seen solid and continuous growth.

The craft end of the market continues to grow, which is why we are in a fairly strong position. We are being hit on one side by the over-supply in the commodity markets.

So there is increased demand for specialty hops, and thats something we do really well.

Doug describes hops as a diabolical crop to grow: no two years are the same. He says they are an enigma, because we dont really know what growers are going to get each year. There are a lot of things we dont know about why things happen in the crop.

For example, one of the quality measures for hops is alpha acids. No-one knows what determines the level of alpha acids in hops. Alpha acids produce the bitterness in hops, and are one of the determining factors in selling commodity hops.

I was at a conference with a professor who works on hops so I asked her what determined the alpha acid levels, and she said: God only knows.

We are quite a large exporter, with only 10% of our production sold domestically. However 99% of NZ brewers use NZ hops too. We do import and sell hops to some local brewers who might be producing English bitters, for example, so selling them certain English hops is a better fit with their product.

We sell hops into some pretty lucrative markets overseas, such as the US craft market, and other major US markets, also to Europe, Japan, Korea and China.

We fight above our weight in the international market, because we are less than 1% of the world crop, but we are ubiquitous in the market.

There are 18 growers who supply and are shareholders of the co-operatively owned limited liability company. We have an independent chair Paul Dalziell, who is not a grower.

There is no government regulations now protecting the industry. Anybody who wants to supply hops has to be a shareholder of the company. If you want to come into the market, you have to buy shares.

The growers have 350ha of land in hop gardens, and this area dropped back a bit in the last five years but in the last two has grown again by 30ha.

We are trying to grow our area further, but the current market is proving a little difficult for us.

It was fairly radical for them to employ a brewer, but I can talk to customers on a different level than the growers.

We grow all sorts of funky new varieties: a lot of our future will be based on our ability to provide new hops to the market. We call it hops with a difference.

For example in the Macs range the Hoprocker has considerably more hops in it than other beers.

It uses the Nelson Sauvin hop, which is named because it does have very similar gooseberry characteristics to the Sauvignon Blanc grape.

We have other varieties now carrying regional names: Riwaka and Motueka. Using regional names is a big plus in the international market, it helps to carry the Kiwi/NZ label.

We grow 19 different varieties, but not all are NZ originals. Some are older northern varieties, and a couple come from the US. Having them helps us keep down imported hops too.

We prefer not to import but if the customer wants them we will.

All products are pesticide free. Some of their hops are organic, but the rest are sold as spray-free. NZ doesnt have many of the hop pests and diseases found in the northern growing regions, so growers here dont have to use fungicides or pesticides. We do some control for one pest, the two-spotted mite, with biological control, using a predator mite.

During the four week harvest growers deliver only the hop cones (which are flowers), already dried and compressed.

After checking for moisture content and sampling for colour, aroma, general appearance, broken cones and leaf and stalk content, the hops are cool stored either for pelleting or for sale to breweries who want cone hops the traditional way.

NZ Hops exports cone hops in bales, pellets and CO2 hop extract (this latter extraction happens next door at Nutrizeal).

Pellets are the most popular way to buy hops: they get processed and compressed into pellets. Pellets are superior to other hop forms, and are made by pulverizing the hop to hop powder, and then extruding the powder through the Amandus Kahl hop press.

The design of the press keeps the hops as cool as possible at all times, so the fresh hop flavour and aromatics are retained very well. Then the hop pellets are back-flushed with inert gas and vacuum packed into 5, 20 or 25kg cartons. And also little 100g pellet sachets are produced too.

The hop extract is a thick honey-like paste or resin. Its a golden tan colour, and the alpha acids in it vary between 25% to 60%, depending on the variety.

Sometimes the whole bale from the grower is exported as is: we have buyers in the US, Sierra Nevada at Chico in California, who insist on a week from harvest to when they receive the air-freighted product.

Another company in San Francisco also buys air-freighted hops from us..

Warren Amos has been working in hops for years, and came to the hop plant back in 1986. Hes the general manager here, and does the grading when the hops come in, with visual inspection, and he scores them for quality.

This year we are reinstating the quality prize and Warren tallies this up.

Testing work is done by Dr Ron Beatson at HortResearch in Riwaka.

Warren says "the industry is in good nick: we are fortunate we have some young guys coming up on the farms, and there has been some planning going on around succession in the industry which was a concern a few years ago.

It is hard work: during the harvest it is just mad. It is the maddest time of the year, working in the gardens harvesting all day and then working the hop kilns at night.

Its a mad race then.

This season started out really well but it got a bit too hot and dry towards the end. Because we are harvesting flowers we have to get them when they are at their best.

Because its a short harvest season they are quite vulnerable to storms. For example once I saw a whole crop in Slovenia wiped out through hail. There is always that risk. The other thing is that no two years are the same.

I love beer, and hops are an integral part of beer, they are inextricably linked. They have given me the opportunity to live where I wanted to live, and this job keeps me in touch with the brewing industry. I was a professional brewer for 15 years.

And this is a good area for food and wine, and all the good things in life!"