Promoting Irish barley at home and abroad

The Malting Company of Ireland has been producing malted grains for close to 170 years. Founded in 1858, it is now a 50/50 joint venture between two of Ireland’s biggest co-operatives, Tirlán and Dairygold, and is a dedicated buyer of Irish grains. “We only source Irish grains, about 40,000 tonnes of barley, across the Tirlán and Dairygold regions and, in turn, we supply some of Ireland’s leading brewers and distillers. We also have export opportunities and we’re looking to do more in the future because we see value in bringing the uniqueness of our Irish grains and malt to a wider market internationally,” Paul explained.

Growing the business

The evolution of the business has been an interesting journey, Paul said: “The malting business started in the Beamish & Crawford building in Cork city back in 1858. There would have been 200 people producing 4,000 tonnes of malt at the original site. Today, we have 14 people producing 32,000 tonnes of malt and that’s how technology has evolved over the years. The big step-change happened when Tirlán and Dairygold got involved in the late 1990s, bringing investment to drive throughput. Further developments are in train, with planning permission in place to expand volume by 60 per cent. We know there’s a long-term demand and we intend to increase barley intake and malt output to fill that.”
The Malting Company of Ireland CEO brought his audience on a journey through the malting process: “It starts with the seed varieties, and it can take 10 years to develop new varieties, which need to work for the grower and for the malting company, as well as our distillers and brewers. We do this very well in Ireland, I think, better than a lot of regions. We build resilience into our supply chain through variety development and that goes right the way through to harvest, dormancy, drying at the intake locations, to when it comes in to the malting company and then on to the customer. There could be a three-, five-, or even 10-year period before a consumer product is made. So, we’re looking at a long timescale from seed variety development to a matured bottle of Jameson or Redbreast. That’s a really long-term approach, and we are part of an industry that plans long term, with 50- and 100-year horizons.
“Our malting process is a seven-day period. It starts with steeping, which replicates the natural process of grain acquiring moisture in the soil, bringing moisture content up to 40 per cent, or higher. We then recreate spring by encouraging germination. At the kilning stage, we stop that natural spring process with the aim of maintaining the sugars and enzymes in the form that Irish Distillers or Heineken or any of our customers need in their products. If it’s distilling, they want spirit yield. If it’s brewing, they may want strong protein for head retention. Flavour and colour are also important attributes, and we prioritise those in the kilning process as well. During germination, we’re constantly turning the grain, making sure the grain doesn’t know if it’s up or down because if it knew it would want to root into the ground. We keep turning it and maintain the strong sugar content for the brewery or distillery later on.”

Paul outlined market stabilisation trends in the brewing and distilling sectors: “We’ve seen consolidation in the craft brewing sector. What we’re seeing in distilling is something similar, where there’s probably not going to be as many distilleries as previously. We’re getting through that period, with another 18 months to go, to see stability. Then we will start to see growth again because Irish beer and whiskey consumption at a global level is still growing, that’s really important. The struggles we’re seeing are more at an inventory level, and that needs to be reset.
“Looking at the macro environment, we’re all hearing about the grain surplus which has impacted pricing. Last year was a bumper period for barley production in Europe, with 150 million tonnes grown. That’s 10 million tonnes above the year before, on top of higher tonnages the year previously. It’s a perfect storm. We’ve got ample supply in a market that’s contracting. That’s the equivalent of two-and-a half million tonnes of malting barley that’s no longer required in the European market. When you see the usages of barley across malting and food there is a difference in what happens in Europe and what’s happening in Ireland. There’s more going into food applications, which is an area we need to look at more carefully, especially for high fibre inclusion in food products. We can see that the malting percentage has shrunk because of the volume reductions. The global beer market is about 200 billion litres of beer. If that contracts by 3 per cent it has a big impact and that’s what we’re seeing in the beer side.”
Whiskey stocks are high, Paul explained: “In distilling it’s about inventory reductions. There’s a very interesting metric which is the ratio of sales to inventory in distilling. Typically, it’s about 1.5 to 1.7. Post-Covid, sales increased, inventory levels were built accordingly, but sales then dropped back, and we’re now seeing a reset of inventory. On the positive side, Irish whiskey consumption is growing and that’s what we need to tap into. The new markets are there.”

Challenges and opportunities

“Looking at the challenges, global beer sales volumes are down 3 per cent, but non-alcoholic sales are up 25 per cent. That’s a real growth area that we want to be part of. Non-alcoholic beer has been around a lot longer than we think. It’s how they have consumed malt products in the Middle East for the last 500 years.
On the tariff landscape, there is uncertainty about where we will be a year, or 18 months from now. What we do know is that we need to diversify. Irish distillers are doing it, looking at the Indian and other Asian markets, with new opportunities from lower tariffs in India. Likewise, we need to do it as a business, and we are doing it. We’ve had our first sales into Japan this year because that’s a big multi-import market that has a large distilling sector. They’re getting accustomed to Irish whiskey, and we need to go on the coat-tails of that and make the connection to Irish grain.” American consumers, he said, have an appreciation for Irish food and drink products, and the US continues to be a strong market for Irish whiskey. He added: “The sustainability piece with Irish branded whiskey is growing there. That’s an opportunity.”
However, with more focus on health and wellbeing, generally, some outside-the-box thinking is also required in this industry. Paul explained: “There is a downside; alcohol has negative health messaging. That may be a part of the consumption changes. What else can we do with barley? We can look at food inclusion and the nutritional benefits of barley protein, and the biofuel sector may offer opportunities. There’s a lot of novel uses developing in Europe and we need to plug into that. Obviously, the race to net zero is still a big challenge for a lot of large multinationals and we can be part of the solution.”