Europe: COVID-19 is shaking up the malting industry

The malting industry in Europe shows mixed results during the recent COVID-19 pandemic. While malt export out of the Europe was still positive and fostered the seaport maltsters along the shore, inland and specialty maltsters often suffered from the several lockdown waves and depressed beer consumption in bars and restaurant during the ongoing pandemic.

“Maltsters had full and even oversold order books, when the first corona wave started,” H.M. Gauger states in his latest market report that was published today. However, “since December inland maltsters had to slow their production” while “the large malting companies in and near seaports, also along the large water ways, could continue full or almost full production,” he reports.

EU malt exports in the last 8 months between July 1 and Feb 28 accounted to 1.983 million tons in grain equivalents. This is a remarkable plus of 6.2 % year on year. Main export destinations for EU malt were Brazil (31,800 tons, + 300 % y/y), Nigeria (13,200 tons), Vietnam (11,900 tons), Japan (10,100 tons) and Cambodia (8,400 tons).

Next to the inland maltsters, specialty maltsters suffered most during the pandemic. As many craft breweries that sell most of the beers in their own brewpubs and that account for a majority of the specialty malt sales, had to close down during the pandemic, those breweries also stopped buying specialty malts.

Consequently, many specialty maltsters had to slow production or even temporary close plants or production lines. Another method to overcome the “Corona-blues” is to look for new fields of activity.

Bestmalz, that processes around 90,000 tons of barley and other types of grain per year and can therefore be counted as one of the bigger players in the market, started recently selling homebrew kits to final consumers in order to make up for lost sales to breweries. The company had to record a significant slump in sales during the first COVID-19 wave but could recover during summer.

“Sales declined in April and May 2020, which required capacity adjustments. Repairs were brought forward and we also brought forward some investments in order to process them in these "quieter" times,” Dr. Axel Göhler, managing director and partner at Bestmalz said in an interview in November. “Looking at the whole of 2020, however, the month-long elimination of the draft beer business will bring significant losses for brewers and maltsters,” he added.

It can be assumed that the ongoing lockdown measures since November have not helped to better the situation.

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