Australia
November 6, 2009
The decision for a maltster or brewer to take on a new ingredient (i.e. raw malting barley or processed malt different to what they have been regularly purchasing) in their manufacturing business is an extremely serious decision.
From a brewer or a maltster’s perspective, terms like consistency, reliability, performance, known characteristics, predictability, and varietal understanding are key to their requirements from malting barley or processed malt.
Malting barley, to a maltster, is at the very core of their business – the confidence and understanding they have of the malting barley variety is one of their main business ingredients. Although the malting process is a scientific one, familiarity with the variety to the maltster is key to getting the most out of the variety in terms of performance.
Maltsters (like growers) are chasing yield – they want to purchase 1000t of barley and sell as close to 1000 tonnes of malt as possible. A maltster’s ability to ‘read’ the variety to make it perform to its optimum is a lot due to the maltster’s familiarity with the variety and all its nuances.
Maltsters need significant reasons to change varieties of malting barley as change represents risk – risk that can be beneficial to their business as well. Malting, like farming, is a business with large overheads and small margins and every post must be a winner in a successful malting company.
The quality of the malt produced must be appealing to the customer, the brewer. Consistency of quality is integral to the appeal. The malt must meet the brewer’s set of specifications in terms of its quality performance in the brewhouse; as with the maltster, the brewer is chasing yield and when the brewer buys 100 tonnes of malt he wants to make as many hectolitres of beer as possible. The term for quantifying this is extract. Extract is a key parameter that Australia’s barley breeders are continually seeking to improve.
[NB: 1 tonne of malting barley yields around 70 hectolitres of beer, depending on recipe etc; a hectolitre is equal to 100 litres]
Australian maltsters all service two distinct markets – the local brewing market (predominantly sugar adjunct or pure malt brewing) and the international brewing market (predominantly a starch adjunct market). There are a few exceptions to this rule of thumb in market needs.
The international brewing market is either one or two degrees away from the Australian barley farmer. Farmers either sell raw malting barley via grain marketers to overseas maltsters (who make the malt and then sell this malt to local brewers); or the farmers sell (either direct or via grain marketers) to Australian maltsters and the Australian malting companies sell processed malt (almost 800,000 tonnes/year) to overseas brewers.
Many brewers operate in highly sophisticated, computerised production factories and require malt of consistent supply, reliable performance and quality, and malt that the brewer is comfortable using.
Many breweries make beer in batch sizes of hundreds of hectolitres using significant amounts of raw ingredient, and it is vital to the business (as in any business) that the product is made successfully.
Depending on the brew being made, the brewer will issue a list of specifications to the maltster detailing quality parameter requirements like fermentability, total nitrogen (aka protein in barley), diastatic power, Kolbach, wort viscosity, wort colour etc.
The quality parameters of the malt (derived from the inherent quality characteristics in the specific variety of malting barley) are vital to the brewer from a production and profitability perspective. The brewer over time has no doubt become used to certain malt blends made from specific varieties and will seek to use them again as they deliver the result required.
It is therefore unlikely a brewer would ever request a new and unknown variety because of risk – financial and production risk in dealing with an unknown barley variety. The impetus for varietal change would either come from the maltster or the grain marketer.
Many breweries around the world have their own brewery-specific list of varieties they accept and it can take up to a year for brewers to be satisfied with their own evaluation of the performance of the new malt.
When a new malting barley variety is released to Australian barley farmers there is a vital balancing act to be managed to step production with market demand for the new variety.
On release of a new variety, it will have been through many years (8+) of micro and commercial scale trials in Australia to determine its suitability as a malting and brewing variety. The commercial scale trials are conducted through the industry-endorsed Varietal Accreditation process driven by Barley Australia, the Malting and Brewing Industry Barley Technical Committee (MBIBTC) and the GRDC/industry-sponsored Pilot Brewing Australia. From this data, all maltsters and brewers in Australia are able to see the barley perform in commercial and micro-scale tests.
Simultaneously, grain marketers and maltsters are beginning to discuss the new lines with their customers overseas. When accreditation in Australia is achieved, and supply is increasing (as bulk-up and adoption commences by the farmers) small parcels of the variety are sent to the potential purchasers for the purchaser’s own trials in their factories.
In initial stages this could be as little as 1kg, as brewers and maltsters look to make purchasing decisions. Slowly, evaluation for individual companies takes place and for brewers this can take up to 6 months for a full evaluation of one batch as shelf life of the beer (termed ‘stability’) is a key parameter.
Often the trial batches are done in conjunction with the malting or marketing company sending a technical representative to help the customer through the malting or brewing process and explain the benefits of the new variety,
For the Australian barley industry players, considerable time and effort is expended by individual companies in order to launch the new varieties in to the marketplace overseas.
It is for this reason that the importance of Barley Australia, MBIBTC and Pilot Brewing Australia is increasing. As we move into the deregulated environment industry-good bodies take on an increasingly important role in the market development for new varieties. It is important for all the industry that there are congruent messages regarding each variety and also that there is some generic promotion of the new variety to the international marketplace.
The de-regulated marketplace for barley does raise the level of difficulty in getting new varieties to the market. There is requirement for increased levels of co-ordination and communication between growers and marketers, maltsters and brewers.
The stepping of growers’ barley production with market demand is critical to not only price structure but price sustainability in the longer term. It is important to remember that the world international malting barley trade is only around 4 million tonnes and when one considers Australia’s market share (between 40 and 65%) and the number of varieties on offer from all over the world there is not a lot of margin for error.
A co-ordinated approach is the way forward for successfully growing new varieties in to the market – this involves grower engagement with their marketers and maltsters, involvement in the regional barley councils and an increased awareness requirement for what the market requires in malting barley varieties.
A new malting barley variety, no matter how agronomically spectacular, needs to be carefully placed into farm rotations with a mind that market share of any variety takes time to grow.
Price relativity will always reflect the demand for a variety but it is important to remember that a variety emerging on to the market may be priced lower than existing varieties while the market establishes where it sits in relation to other varieties for quality demand and value.
Understanding the nature of the international malting and brewing market helps to explain the need for moderate introduction and adoption of new varieties for malting barley, and careful industry stewardship from the relevant industry groups help to manage this function.
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