Tapawera Hop Garden Partnership will begin in spring to plant 116 canopy hectares and contract Hop Revolution to develop and manage the properties and provide post-harvest services.
MyFarm is offering 1764 units of $10,000 each with a minimum investment of $100,000.
It is forecasting annual returns of 15% from 2023 financial year onwards.
The key targets include average mature yields across four varieties of 1705kg/ha and garden gate returns of $31.27/kg.
Hop Revolution said it can achieve that higher return by growing a more valuable mix of varieties and dealing directly with craft brewers rather than hop merchants.
New Zealand’s 23 mostly small-scale growers supply the co-operative NZ Hops and 80% of production is exported, though NZ grows less than 1% of global output.
The only grower operating independently of NZ Hops is Freestyle Hops, a United States-owned company that bought an existing 61ha in 2017 and is establishing its own pelletisation plant.
MyFarm sales director Grant Payton said Freestyle has seen the Tapawera projections and believes they are realistic.
The NZ hop growing industry is about 600ha, having grown quickly over the past two years from 450ha, and makes export and domestic sales worth about $30 million a year from less than 1000 tonnes of dried hops.
The demand for our aroma and dual-purpose hops is very high from craft brewers, whose beer barrel output has trebled in the US, for instance, over the past decade.
Along with Australian, NZ hops achieve the highest values in the US market – an average of US$18.78/kg for 239t in 2017. European hops sell for $10-$12/kg in the US.
NZ hops have also attracted good prices in the United Kingdom and Australia, though a little lower than those from the US.
World production of hops is more than 100,000t annually, dominated by Germany with 40% market share.
Craft brewers use four to six times the hops required for traditional beers and NZ grows some of the most sought-after aroma hop varieties.
In MyFarm presentations to investors, newly recruited rural economist Con Williams spoke of common success themes among higher-value land uses.
Avocados, blueberries, apples and hops share themes such as best practices from orchard to customers, the application of new technologies and varieties, market-based payments reflecting the quality characteristics consumers want and some product uniqueness and intellectual property.
The horticultural crops offer returns of up to 20% while dairy, meat and wool are below the cost of capital, Williams said.
Other primary industries that exhibit the success factors are seafoods, kiwifruit, pipfruit, the wine industry and forestry with impetus from the Government’s planting intentions and the zero-carbon legislation.
Hop Revolution was formed by plant scientist Susan Wheeler in partnership with the late Terry McCashin, the founder of Macs and Stoke breweries.
It wants to investigate hop growing in parts of the country outside Nelson and access the licensed hop varieties from Plant and Food Research.
Working with syndicates Hop Revolution wants to plant in Gisborne, Canterbury, Central Otago and Hawke’s Bay.
Wheeler is now general manager of research and development and the independent chairman of Hop Revolution is John Loughlin, also chairman of Rockit Global, EastPack, the Meat Industry Association, PowerCo and Tru-Test Corporation.
The Tapawera Partnership will have a 20% stake in Hop Revolution, which will in turn take up a 10% stake in the hop garden.
Hop Revolution needs to build a pelletisation and cool storage facility, develop markets, begin plant breeding and meet working capital requirements.
For the hop garden the forecast revenue when fully productive is expected to be about $6m annually, less 40% working expenses and about $100,000 in syndicate expenses and MyFarm administration fees.
It will also be paid 5% of distributions.
MyFarm will charge an establishment fee of slightly less than $1m while equipment and machinery will cost $5.6m.
Hops need harvesting over a short period and the varieties have been selected partly to spread the maturity times.
