Alive and kicking
German beer market | Some
brewers are feeling morose about their future. The growing interest
in special edition beers however suggests they should not.
Many moons ago, it must have been
some time in the mid-1990s, I wrote an article for an American
magazine (long since discontinued) with the provocative title
“German beer market RIP”. If memory serves me right I argued that
with consumption declining by about 2 percent each year, brewers in
Germany were in for a long and slow demise since they failed to
arouse interest in the beer category by brewing thousands of very
fine yet very similar tasting lager beers. I concluded that theirs
may be an honourable undertaking - staying true to the tradition of
the Reinheitsgebot and all that. But I worried that once flavour was
replaced by price as the single most important factor of product
differentiation, the writing would be on the wall.
Recalling my juvenile cockiness, I
wince at this even today. What made matters worse was that the
publisher “Buffalo” Bill Owens, who had a fine eye for graphic
embellishment, decided to print my piece against a drawing of a
graveyard with toppled over tombstones. Ah well, subtlety was not
one of our strong points then. Fortunately, the magazine was not
read in Germany and I was saved from having to run the gauntlet of
questions and doubts about my beer loyalties in my own country.
Since the article was published,
beer consumption in Germany has dropped even further. In actual fact
it has declined to 107 litres per capita in 2010 from 147 litres in
1986. Clearly, 107 litres per capita still make Germany a country of
beer guzzlers. For how much longer, though? Should Germany go the
way of neighbouring Belgium, where beer consumption stands at only
80 litres after two decades of steady decline, brewers in Germany
will end up crying into their beer. Inconsolably so. And who would
hold it against them? Year after year they have had to stomach the
loss of almost 2 million hl of volume (alternatively the increase of
painful overcapacities) and EUR 200 million in sales.
I admit I have not given the beer
category in Germany much thought in recent years. Like most
consumers here I merely sigh with resignation when I see that yet
another beer brand is abused by a retailer as a door opener. Last
year the so-called national brands sold over 60 percent of their
volume on promotion – at a discount of up to 30 percent on the
recommended retail price. If you look at things in the harsh light
of day, the premium-price category has all but disappeared
nationally now that brands with an erstwhile premium tag are being
offered for about EUR 10 per crate (10 litres) kind of permanently.
I call that pre-meditated murder. And I don’t care who is more of a
culprit: the retailers or their accomplices, the brewers.
At Rüdiger Ruoss’ Davos conference
in February this year, the French beverage economist Germain
Hansmaennel called it sheer madness that Germany’s big brewers were
slashing prices on their beers while keeping up high media spending.
“If you have any business sense”, he said, “you do one or the other
but never both.” Heaven knows what possesses them, but brewers’
advertising budget still adds up to over EUR 400 million annually –
making them the biggest spender in the alcohol category (EUR 550
million in 2008) according to figures released by Germany’s alcohol
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