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» Beverage Industry News » German Beer Market: Slow Decline To Continue

German Beer Market: Slow Decline To Continue

Beverage Industry News» Beverage Industry Newsposted Sep 4th, 2003 12:00:00AM by Pat Hagerman

The economy’s weak, the population is aging, and concerns are growing about alcohol consumption in general. Welcome to modern Germany, where the beer market continued its decline in 2002, dropping at its highest annual rate in more than a decade. But it’s not all doom and gloom. Brewers marketing beer-based mixed drinks saw a 30 percent increase during the year, according to a new report from Canadean. German consumption per capita is still nearly 60 per cent higher than the western European average, and the German beer market remains Europe’s largest and the third largest worldwide, but the German brewing industry continues to operate in an old-fashioned, highly fragmented market. Germany boasts a huge number of breweries at 1200, three quarters of all breweries based in the EU, but their combined output is only around a third of EU beer production. The long-term outlook is for a continuing drop in the number of breweries, due to declining consumption, closures, mergers and acquisitions. German consumers have tended to move away from alcoholic drinks in general; healthier options such as mineral water and juice are on the rise, and Germany now consumes more coffee than beer. Demographics are also reducing the numbers of the 15-to-34-year-olds, the core beer drinking market, which is shrinking as the German population ages. The result is a seven percent drop in beer consumption since 1998. Trends that grew beer consumption in previous decades are no longer driving an overall increase in numbers. The Pilsner segment, which grew rapidly from the 1970s to the early 1990s, still dominates the scene – 67 per cent of German beers sold are of the Pilsner type. Following reunification, brands produced in the “New States” in the eastern regions of the country have grown, but not enough to turn around the overall market.

The second and third largest German beer-market segments, export and Bavarian-style wheat (Weizen) beers, have continued to grow, and although beer-based mixed drinks – Germany’s answer to alcopops and malternatives – are still in fourth place, accounting for 3 per cent of total consumption, they also account for the fastest growing market niche. Such ready-to-drink beer mix drinks as “Radler,” “Diesel,” and “Weisse Mix” from Berlin are popular among younger consumers looking for something a little different. The best selling varieties are beer mixed with either lemon-lime soda or cola. One eastern German brewer is marketing a beer mixed with a carbonated raspberry juice drink. Other trends include a significant move to price discounting, particularly with the rise of “in-store” brands at discount outlets, which have increased by some 40 per cent in the last four years, and budget-priced private label beers sold by the discounters have helped strengthen off-premise sales there. These budget beer brands have risen to take up nearly 72 per cent of total beer volume. Continuing uncertainty in the Germany economy will probably see this trend continue, with consumers opting to drink cheaper beer at home, instead of heading down to the corner pub. The rise of the budget-beer segment had also been accompanied by a rise in the use of cans for packaging, but the recent deposit scheme on cans that started in January 2003 presages a shift back to bottles, as many retailers have removed cans from their shelves, leading to a subsequent decline in overall beer sales. Canadean’s research predicts that Germany’s beer market will continue to decline in 2003 and expects consumption to fall by 5 per cent, even as certain segments continue to show growth.

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Pat Hagerman

Posted by Pat Hagerman

Pat Hagerman is co-founder of ProBrewer.com. When he's not leading operations for ProBrewer you can find Pat working on Internet of Things (IoT) infrastructure and systems. If you're having a beer with him ask about some of the more original skills he's taught Alexa.

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