Leading Kiwi hop supplier NZ Hops Ltd has reunited with government-owned research institute Plant & Food to ensure an ongoing supply of new varieties.
Plant & Food’s hop breeding programme has created a series popular aroma hops such as Nelson Sauvin, Kohatu and – recently – Nectaron.
The new deal with NZ Hops Ltd – a cooperative of 27 growers – is a modified return to a previous long-term relationship where the two organisations worked hand-in-hand to develop hop varieties.
The arrangement ended with the emergence of independent hop farms that challenged the exclusive arrangement.
Under the new deal, NZ Hops has an exclusive agreement but within a non-exclusive relationship.
“There’s nothing stopping any of our competitors having their own arrangement with Plant & Food,” says NZ Hops chief executive Craig Orr.
“But we have our own exclusive agreement within a non-exclusive partnership environment.”
The key element is that NZ Hops gets exclusivity over cultivars it chooses to “go forward with”.
Critical to the deal is that NZ Hops will hold ownership of intellectual property in relation to new varieties, known as plant variety rights (PVR).
“One of the key items was recognising the need for the co-op to actually own the IP, which we now do. Unless we had the pipeline of future PVRs we’d have short term horizon in which to manage ourselves.
“Secondly, in compensation terms, we recognise the need for them to get some consideration for the transfer of that IP.
“As a result, we’ve arrived at a very good commercial relationship.”
Plant & Food will also be more involved with grower trials as both parties aim to speed up the commercialisation of new varieties, which often take a decade or more to bring to market.
Hop breeding is the “backbone” of the relationship with NZ Hops getting access to the back catalogue of breeding trials but there are other strings to the deal that would add value to the industry, said Orr.
First, NZ Hops is able to utilise resources from the wider Plant & Food research teams. This gives hop growers access to wider research around agronomy and innovation.
More importantly, Plant & Food will work with NZ Hops on creating more downstream hop products – such using hop oils in the beauty industry – and looking at ways to use hop bines and waste material for the creation of other products.
“We’re not only looking at other uses of hop cones but how we might utilise hop bines and waste products and develop them into downstream products. Their scientists can help us create a strong sustainability story around the total of the hop bine.
“Outside the brewing sector, the oils can go into other sectors and in terms of hop materials, the plant matter could be used in other industries, such as textiles.“
Given hops close genetic relationship with hemp, for instance, there are opportunities around textiles, rope, biofuel, insulation and even building materials.
Orr said there was no time frame to the deal – rather it was an “enduring agreement” – and the value of the relationship was commercially sensitive.
He said while there were other research organisations NZ Hops could have negotiated with, he was keen to rekindle the relationship with Plant and Food.
“You think about what’s been achieved in hop industry through Plant and Food – they are the architects of the industry in New Zealand.
“Our view was that unless we had a deal with Plant and Food we wouldn’t feel at home.
“It’s important to have the science but it’s more important to have the relationship.”
Plant & Food Research’s purpose is to enhance the value and productivity of New Zealand’s horticultural, arable, seafood and food and beverage industries to contribute to economic growth and the environmental and social prosperity of New Zealand. As a Crown Research Institute it receives investment from government and pays a dividend.