Malt on the move

Anniversary | Not only brewers but also German maltsters have been left shaken by the energy crisis, weak exports and the drop in beer consumption. Nonetheless, crisis situations are nothing new for traditional malting companies which have often been active on the market throughout several generations of the same family. Palatia Malz GmbH from Heidelberg, Germany, which this year celebrates its 125th anniversary, can also testify to this, as majority shareholder and managing director Dr. Axel Göhler tells us in our BRAUWELT interview. This is no reason to be pessimistic or anxious about the future, however.

Mr. Göhler, congratulations on 125 years of Palatia Malz, an impressive time span. What can you tell us about how the malthouse was founded?

Dr. Axel Göhler: The history of our family business goes back to a flour mill in the Lautertal. The banks of this idyllic little valley of the Lauterbach in the southwest of Germany close to the French border were once lined with mills that dated back to the Middle Ages and made flour for bread. Our parent company started out in one of these mills, at what was known as a Bannmühle or manorial mill which provided vital supplies of flour to the region well before the French Revolution. The main mill was situated on the stream of the Schmeißbach which flows into the Lauter and was thus known as the Schmeißbacher Mühle both within the region and beyond.

In the wake of industrialisation, the waterside location of the mill was no longer an advantage and many subsequently became unprofitable. This was also the case with the Schmeißbacher Mühle in Kreimbach-Kaulbach about 40 kilometres north of Kaiserslautern, which was turned into a malthouse in 1899. My grandfather Max Göhler, whose father was the successful technical director of what was then the Union Brewery near Berlin, purchased the business in the late 1920s, thus carrying on a family tradition of working in the brewing industry dating back generations. Under the management of my father and my older brother, by buying up other businesses and repeatedly launching new development projects the company slowly evolved to become an efficient, medium-sized malting group. We’re now one of the top companies in our sector and are represented with our products worldwide.

How has the company developed over the years?

Dr. Göhler: Despite all of the uncertainties brought about by the Second World War and various other crises, looking back our company has been able to continuously develop. Our turnover and number of products have steadily increased over the years. By buying up a malthouse in Wallertheim close to the motorway junction at Alzey in the 1980s, the company gained a strategic hub from which to distribute goods both throughout Germany and internationally. Launching out into special and roasted malts at the beginning of the new millennium ultimately resulted in a growth spurt, as this move considerably extended our product portfolio. All of these decisions called for a great deal of investment, as not only our business logic but also the necessary infrastructure, supporting systems and logistics setup had to be adapted and expanded; instead of a few individual products, we suddenly had more than 50 quality malts in different packaging sizes on the global market. The various business concepts implemented by the three generations of our family have also had a hand in our development, of course. I myself found it important on taking over as managing director ten years ago to bring digitalisation, automation and research and development up to the next level. This has proved very successful: our company turnover has more than doubled since 2014.

Which milestones in the history of the malthouse are particularly significant for you and why?

Dr. Göhler: I consider the milestones in our development to be split into three stages: the first entailed rebuilding the business after the Second World War, when we had to cater for rapidly growing requirements and heal the destruction of the supply of raw materials caused by two world wars. The second stage for me was the strengthening of our export activities and expansion of our two production sites which laid the foundations for our business today. The third stage I feel to be quite definitive has been the structural adaptation and further development of the last ten years, as many family businesses find it difficult in the face of growing market dynamics to streamline their structures and keep their processes in step with the state of the art.

To mark your 125th anniversary, you’ve called for proposals for innovations in the field of plant-based proteins for food. What inspired you to address this topic?

Dr. Göhler: Our natural ingredients provide a huge range of possibilities when it comes to meeting the demand for food in the future. Experts say that it’s necessary to replace 50 percent of food consumption based on animal fats and proteins with plant products if we’re to master the challenges of climate change. Around 15 percent of greenhouse gases worldwide are generated by the farming of livestock for food. Each year, this amounts to over seven gigatonnes of CO₂ equivalents. We thus believe that plant proteins will be one of the key areas of research in the coming years. This is why we decided to introduce this award.

What do you hope to achieve through the submitted innovations?

Dr. Göhler: First and foremost, we hope that we can offer support to young researchers with exciting concepts. Before Palatia Malz, I myself worked in biotechnology and am fascinated by the opportunities this presents. What’s more, we find it extremely fruitful to work together with innovators outside our own core industry. Our most recent foray into brewing yeast together with an innovative Italian partner is also opening up new perspectives. We’ll see whether and how synergies arise here.

Which current trends and developments in malting and the food industry do you see as being particularly forward-thinking?

Dr. Göhler: The aforementioned substitution of animal with plant products seems to be incredibly important in my view. In the malting business as in the international brewing industry, we’re also seeing consolidations that are creating companies of vast sizes. Regarding cost, these huge concerns are at an advantage, as in the medium term they can move their production to where key cost factors such as energy, personnel and taxes are lowest. I’m firmly convinced that the existence of site-dependent, SME malting facilities is of course also still justified – both now and in the future – as they enrich the market with their range of products and provide key economic impetus for their regional environment. After all, 60 percent of all jobs in Germany are provided by SMEs.

Regionality is and will remain a decisive factor with respect to our raw materials, too, despite globalisation. Our domestic agriculture isn’t just an international ecological leader; it also supplies industrial processors in Germany with raw ingredients that are unparallelled throughout Europe and the rest of the world. This is why German politics would do well to keep close tabs on concentration tendencies in the European agricultural sector and the accumulation of purchasing power at a handful of European concerns.

Apart from this, pending investment in the reduction of carbon emissions is a fundamental threat to SMEs throughout the whole of Europe, one that has to be taken seriously, as these companies generally don’t have enough capital to finance the enormous changes needed in their infrastructure by themselves. To my mind, our responsible politicians are often far too naive in this respect and only close the stable door after the horse has bolted.

What do you think the future holds for malting plants over the next few decades and which role will plant-based proteins play in this?

Göhler: We see great opportunities in a wider use of various elements in our value creation chain during the production of malt. As we’ve worked in the production of grain-based brewing malt for decades, we’ve amassed considerable expertise in the procurement and handling of these natural ingredients. We see the groups of raw materials we work with on a daily basis as the key to lots of future foods. The industrial roasting of various grains and pulses, for which we’ve developed a particularly gentle method over many years, also holds potential for the refinement of food and ingredients.

Researchers agree that fermentation on an industrial scale in the production of new plant-based foodstuffs will gain a new significance. Plant proteins can be modelled through fermentation so that their key properties come very close to those of animal proteins. If, in addition, enzymes are specifically applied, these can even enhance the protein content or simplify further processing. Proteins and enzymes are our constant companions during brewing and malting, meaning that extensive empirical values are available here. There are already numerous fields of research into spent grain, for example, which are intent on processing this as food destined for human consumption. Regarding the new significance of fermentation, our expertise in engineering germination processes, which we carry out in batches of mere kilograms to a hundred tonnes and more, can be extremely useful. In our view, decades of experience in these areas can be perfectly exploited. The chances are thus good that many of today’s malting facilities – also and especially SMEs – can play a role in the production of future foodstuffs, provided they’re open to new developments, make strategic use of their flexibility and have the necessary reserves at their disposal.

Dr. Göhler, thanks very much for talking to us and all the best for the future!

The interview was conducted by BRAUWELT editor-in-chief Dr. Lydia Junkersfeld.