Chinese drinkers’ thirst for premium beer gives Canadian barley growers a golden opportunity

At a laboratory in the city of Winnipeg, Peter Watts samples a golden pale ale made with a new variety of barley grown in Canada’s Prairies which brewers think will one day help to meet China’s increasing thirst for premium ales and lagers.

“We saw a real uptick in the last couple of years” in China’s demand, said Watts, the managing director of the Canadian Malting Barley Technical Centre, a non-profit research facility funded by maltsters, exporters, brewers and farmers. “We think that is because they’re producing more premium beer.”

As brewers target discerning drinkers, the centre is helping to fuel research of new malt barley varieties that produce a richer colour and flavour than lower-quality grain. Canada, the second largest malt barley exporter to China, is trying to gain a bigger slice of the burgeoning market from Australia, the leading supplier.

China is the world’s largest beer market, and consumers are increasingly shifting to premium and foreign brews from mass-market brands as incomes rise. The market share of premium lager in the five years to the end of 2017 more than doubled, according to data from Passport, Bloomberg Intelligence analysts Shen Li and Thomas Jastrzab wrote last month in a report.

Canada’s barley has higher protein than crops from nations including Australia. That quality helps in fermentation to give the final product more body and head retention. Acreage in the North American nation rose 13 per cent in 2018, and output is poised to climb to 8.2 million tonnes, government data showed.