PART IV: The Future
So, where do we go from here? There seems to be a very encouraging trend on the part of a number of microbreweries towards producing high-quality products, not just quantity for a competitive price. These breweries, and future ones like them, are the ones we expect to see around in ten years. The growth curve seems to have plateaued at around three to four new breweries per year, and that trend will probably continue for some time. Kiwis, particularly outside the major Auckland region, tend to be quite provincial, and they like their local sports teams and their locally produced beer, although for some the deciding factor may be price over quality.
Trends in Consumption
It is encouraging to note that New Zealand’s microbrewing industry is, from all indications, thriving in spite of steadily declining alcohol consumption in the general population. The country’s per capita consumption of total alcohol has dropped dramatically in recent years, from a peak of approximately 7.8 litres in 1989 to about 6.3 litres in 1997. And most of the decline in consumption during this period was in the form of beer, which dived from 4.6 litres (60 percent of the national total) to 3.4 litres (54 percent). During the same period, alcohol consumed in the form of wine increased slightly from 1.7 to 1.9 litres per person, while alcohol from spirits dropped from about 1.5 litres to just over 1 litre.
Per capita consumption estimates for alcohol contained in beer and wine during 1998 are relatively unchanged over 1997, but consumption from spirits is projected to increase substantially to approximately 1.4 litres, just a little under where it was ten years ago. This increase is mostly due to the high popularity of recently introduced RTDs, ready-to-drink cocktails, in the 5 to 6 percent ABV range. Substantial factors in the general decline in New Zealand’s alcohol consumption have been major public awareness programs regarding the dangers of drinking and driving together with strict enforcement of laws regarding such behavior. Taxis abound and are reasonably priced, and the designated driver is now a standard fixture for most evening outings.
Certainly, the relaxation of New Zealand’s liquor laws, beginning in the 1960s, set the stage on which craft brewing and consumer choice could later grow. In 1961, licenses were issued for the first time for restaurants separate from hotels and, also for the first time, at least since the 1880s, licenses were issued for taverns, whether or not they served food. In 1967, the 6:00 p.m. mandatory bar closing requirement, which was instituted strictly as a war-time measure in 1917, was lifted. Liquor licenses were first issued for theaters in 1969, followed by airports, cabarets in 1971, and bottle stores in 1976. Liquor licenses covering all categories of outlets have risen from 1,100 in 1960 to about 10,500 today.
Current liquor laws in New Zealand are a mixture of the old and oppressive with the modern and refreshing. No alcohol, except wine, may be sold in supermarkets, and even this may not be sold on Sundays. There is no Sunday selling of alcohol, period, except in eating establishments under the condition that, at least theoretically, the customer is planning to consume a meal. A full range of spirits, beer and wine is available at bottle stores. There are many BYO (bring-your-own) restaurants where you may take in your own wine (sometimes beer), and have served, at little or no charge, with your meal. Also, although the current legal drinking age is 20, persons over 18 may have a drink in restaurants, so long as they are accompanied by their parents. And you can go into your local multi-screen theater and sit down and have a drink while waiting for the show to start. Finally, all packaged alcoholic beverages, even imports, sold in the country must have the ABV content clearly printed on the label. At the present time, ABV disclosure is not required on-site for bar drawn beers, but many pubs and restaurants display these figures voluntarily as a convenience for their customers. Knowing the alcohol content of the beverages you are buying or consuming can be particularly valuable in light of New Zealand’s strict drinking and driving laws.
A major revision of New Zealand’s alcohol laws is currently under consideration in Parliament. Provisions, all of which need not be adopted,. include lifting of the wine-only restriction for supermarkets, allowing alcohol to be sold generally and consumed on Sundays, and lowering the legal drinking age to 18.
Also of interesting note is the quantity of home brewed beer produced (legally) and consumed in New Zealand, with the annual quantity brewed being equal to about 3 percent of national commercial production. Unfortunately, because of the relatively high cost of beer in this country, due in no small part to a high excise tax rate (NZ$19.36/litre of alcohol, equivalent to approximately U.S. $10.07), most of this homebrew is targeted towards high quantity at low cost. Cheap, pre-hopped, extract beer kits can be purchased in any local supermarket. A growing number of home brewers here are gaining interest and expertise in producing high-quality, all grain beers. These are the individuals, hopefully, who will be the craft brewers of our future.
Local Hop and Barley Production
All commercial hops in are now grown in the Nelson region, at the north end of the South Island, at about the same latitude as the California/Oregon border. All are harvested in February or March, depending upon the weather, and virtually all are sold pelletised.
In the early years, hops of one quality or another, mostly traditional varieties, were grown throughout much of the country in close proximity to the major regional brewing centers. Gradually, during the same period that brewery consolidation was occurring, commercial production drifted toward Nelson, which calls itself “the sunniest spot in New Zealand.” A decline in the number of growers has paralleled the consolidation of the brewing industry itself, dropping from 200 in the 1920s to 130 before World War II, to the current 25, even though total area planted over the last five decades has remained in the 750 to 850 acre range. The total 1948 production was 444 thousand kilograms, compared with a projected 1999 harvest of 750 thousand kilograms.
Until quite recently, all hop production in New Zealand was focused on locally developed, high alpha acid, triploid varieties, such as Super Alpha (approximately 14%) and Pacific Gem (approximately 16%), which are used for aroma as well as bittering. Starting only five years ago, with the strong support of Lion and DB, planting of New Zealand varieties of aroma hops, such as Hallertau and Saaz, commenced. The 1999 harvest will consist of approximately half aroma hops (up from 25 percent only two years ago) and half the traditional high alpha, dual purpose varieties. Eighty-five percent of this harvest will be exported, with approximate 15 percent shares going to Germany, North America, Ireland/UK, and Japan, and the remainder to mixed smaller users. Year-to-year plantings are based on the anticipated needs of these overseas customers and futures contracts with the domestic majors. Over 80 percent of the 1999 harvest is pre-sold, and all remaining inventory from the 1998 harvest is committed. By current law, which is now under review, all New Zealand commercial hop sales, both domestic and overseas, must go through the Hop Marketing Board, to which all the growers belong.
New Zealand’s hop industry, by world standards, is quite small, only about 5 percent of the total. And it is not at all unreasonable that the growers, particularly after being badly burned in the past by overproduction in a unstable world market, would try to tailor their output as closely as possible to the requirements of their proven historical and contracted customers. However, it is often very difficult, if not impossible, for New Zealand’s rapidly growing craft-brewing industry, which thrives on variety, and often has unpredictable long-term needs, to fill its aroma hops requirements from domestic supplies. As a result, we have recently begun bringing in aroma hops from Hop Union to help meet the needs of this under-served market.
Barley can be grown successfully in many parts of New Zealand, but production today is concentrated in three areas of the South Island and one area of the North Island. Of the typical 75,000 metric tons harvested annually by about 600 growers, approximately 60,000 tons is malted for brewing, and about one-third of that is exported, mostly to Japan.
At the turn of the century, there were some 30 malthouses in New Zealand, and today only three serve the industry. The Canterbury Malting Company operates two large plants, one on the South Island at Heathcote, near Christchurch, and the other at Marton, on the North Island. McCashins also operates a small malthouse for their own requirements.
The Canterbury Malting Company is jointly owned by Lion and DB and serves the needs of those two majors, as well as some small and large independents in New Zealand and breweries in the South Pacific islands. Base and specialty malts for craft brewers are also being imported from Australia and the UK by others.
Malting barley grown in New Zealand is two row, with the principal variety being Valletta. The malt produced is primarily lager, with lesser quantities of specialty malts.
by Luke Nicholas and Tony Rutherford
Appeared in New Brewer International, March 1999