Future of the Malt NMBT 19.5.2016 Timo Huttunen Viking Malt
Our topics today Beer and Malt market update Malt as an ingredient Some commercials
Market update
Beer market update In 2015 global beer consumption declined about 0,8 % China, Russia and Ukraina In 2016 the development is expected to be positive again Between 2016 2021 increase in is estimated to be positive but not to exceed 2 % on a annual level High risk at the emerging / developed markets due to political / economical development
Beer market volume growth Emerging markets Annual growth % Developing markets Developed markets Time (years)
2008 2009 2010 2011 2012 2013 2014 2015P 2016F 2017F 2018F 2019F 2020F 2021F 2008 2009 2010 2011 2012 2013 2014 2015P 2016F 2017F 2018F 2019F 2020F 2021F Beer consumption forecasts in Nordic Countries (in mio liters) 500,0 450,0 400,0 350,0 300,0 250,0 200,0 150,0 100,0 50,0 - Denmark 470,0 460,0 450,0 440,0 430,0 420,0 410,0 400,0 390,0 Finland 490,0 485,0 480,0 475,0 470,0 465,0 460,0 455,0 450,0 Sweden 280,0 275,0 270,0 265,0 260,0 255,0 250,0 245,0 240,0 Norway Data from Canadean
2010 2011 2012 2013 2014 2015P 2016F 2017F 2018F 2019F 2020F 2021F Beer consumption forecast -2021 220 000,0 210 000,0 200 000,0 190 000,0 180 000,0 170 000,0 Global Series1 18 000,0 16 000,0 14 000,0 12 000,0 10 000,0 8 000,0 6 000,0 4 000,0 2 000,0 - Africa 90 000,0 80 000,0 70 000,0 60 000,0 50 000,0 40 000,0 30 000,0 20 000,0 10 000,0 - Asia 45 000,0 40 000,0 35 000,0 30 000,0 25 000,0 20 000,0 15 000,0 10 000,0 5 000,0 - Latin America Data from Canadean
Malting capacity changes European capacity to remain stable Some new investments in NA South America will have the main investments (Brazil) Asia / China and Vietnam also increasing From 2015 => 2020 additional capacity ca. 1,75 mio tons Est 2018 global capacity 27,5 mio tons Many new investments on special malting capacity (roasting) and further processing
Global Capacity changes 2013-2020 2013 2014 2015 2016 2017-2020 total Africa - 45 + 170 +90 + 215 Vietnam +110 +110 + 220 EU - 95 +120-250 - 225 NAFTA +65 +300 +365 Brazil + 120 +90 +110 +250 + 570 Uruguay +80 +80 China +100-300 +700 +500 India +150 +150 Russia - 45-100 - 145 Australia? Total - 95 + 30 + 325 +120 +1350 + 1730
Malting barley growing areas Emerging markets
Biggest commercial maltsters 2016 Viking Malt position: N:o 9 globally N:o 5 in Europe N:o 1 in Baltic Rim
How does this affect on malt demand The beer consumption will grow due to Increased population Increased income per capita mainly in emerging markets If global beer consumption volume increase between 2016 => 2020 ca 1 % / a From 2 000 mio hl => 2 100 mio hl This corresponds to 1,5 million tons of additional malt (approx malt usage 15 kg per hectoliter) The known disinvestments & investment decisions on malting capacity are more or less in line with this additional need Craft brewing effect?
Rise of the Craft Malsters Craft Malts are following the Craft Beer trend Site capacities are typically 100-500 tons, whereas the variety of malted grains is wider that big malsters have Very much based on the local raw material, own farm, own brewery In US there is about 100 small malthouses that call themselves Craft Malsters Some malthouses also running in Nordic Countries Volume effect on total offering of malt is quite low
Malt as an Ingredient
Malt is healthy Malt is a whole grain Whole grain diet has been connected with many positive health effects, such as decreased risk of certain types of cancer, lowering of blood cholesterol, and risk of coronary heart disease. Malt is enriched with health promoting compounds Malting changes not only appearance, flavour, and taste, but also nutritional value of the grain. Many health promoting compounds are enriched in malting, especially during germination of the grains
Why malt is healthy? Antioxidants protect the cells against oxidative stress. Vitamins, sterols and phenolic compounds, as well as phytic acid are antioxidants present in cereals. Malting increases the amount of those compounds. Vitamins are essential compounds for human physiological functions and must be obtained from the diet. Cereals are a good source of vitamins B1, B2, B3, B6, B9 (folic acid) and vitamin E. Malting process increases the concentration those vitamins. Cereals are an important source of Dietary fiber and especially source of water-soluble fibers, β-glucans and arabinoxylans. Minerals are essential for physiological functions and must be present in the diet. Cereals are important source of certain minerals, such as iron, potassium, phosphorus, zinc and magnesium. Germination increases availability of the minerals by making them more soluble from the grains.
Fenolic compounds 7 Maltaiden fenoliset yhdisteet (6 vrk idätys) vapaat fenolit, natiivi vapaat fenolit, idätetty kokonaisfenolit, natiivi kokonaisfenolit, idätetty Fenoliset yhdisteet (mg(g) 6 5 4 3 2 1 0 Barke Maaren Saana Scarlett Anniina Kruunu Harnesk Vinjett Amilo Juuso Kier Riihi Aslak Ingeborg Marika Roope Barley Wheat Rye Oat Ohra Vehnä Ruis Kaura Concentration of fenolic compounds in raw cereals and malted cereals Malting process remarkably increased the concentration in all cereals
Folate (B9 Vitamin) 250 Natiivi Mallas Folaattipitoisuus ug/100g 200 150 100 50 0 Barke Maaren Saana Scarlett Anniina Kruunu Harnesk Vinjett Amilo Juuso Kier Riihi Aslak Barley Wheat Rye Oat Ohra Vehnä Ruis Kaura Concentration of folates in raw cereals and malted cereals SW Ingeborg Marika Roope Malting process remarkably increased the concentration in all cereals between 3 10 times
Food applications Different malts has been used as a food ingredient for long time Typical applications are in baking, extract manufacturing and other cereal based foods Reasons / benefits are typically taste, aroma, technological advantages Usage rates are pretty low Has the health properties been utilized yet?
Product example on sausages Barley Grains Special Malt 1 Saugages containing malt was found more salty and spicy in taste panel Opportunity to reduce salt contents and optimize recipe
Snack examples Reference Wheat Malt Flour 15% Wheat Malt Flour 30% Light Rye Malt Flour 15% Light Rye Malt Flour 30% Cara Bake 10 30% Otex 15% Maltax Golden Rye 0,5% Maltax Golden Rye 3% Maltax 10 30% Maltax 400 Gold 15% Chocolate Malt Flour 3% + Maltax 10 12%
Malt in feeds? Not like in foods, malts has not been widely used as a feed ingredient It can be assumpted that certain malts have positive effects on production and home animals nutrition and well being Malt could be natural source of enzymes or any other important compound Trend of more natural raw material for commercial feeds Viking Malt has certain activities on this topic with results to be presented later
Conclusions Beer consumption is expected to grow, specially at the emerging markets that will keep malt demand good Anyhow our home markets will develop flat Craft Malting companies will get a lot of visibility in coming years Malt has a big additional potential in different types of foods and beverages Malts can be utilized in certain feeds Malt is the next Super Food
Some commercials
PROFESSIONALS MALT HOUSES MALTING LOCAL BARLEY SERVING GLOBAL CUSTOMERS ANNUAL PRODUCTION CAPACITY 600.000 t/a 250 6 60 Operations since 19 th Century DISTRIBUTION COUNTRIES 30MALT VARIETIES 40 kt/a ROASTING CAPACITY KEY MARKETS: BALTIC RIM, EUROPE, LATIN AMERICA, AFRICA, ASIA
OUR MALT HOUSES Our barley sourcing is as local as possible. Efficient supply chain gives us the improved control over the variety development, farmer cooperation and grain quality. HALMSTAD SWEDEN LAHTI FINLAND PANEVĖZYS LITHUANIA VORDINGBORG DENMARK SIERPC POLAND STRZEGOM POLAND
Colorado Malting Company is the craft malt pioneer in USA Viking Malt is the leading malting company in Northern Europe
Colorado Video
Kiitos Any questions?