German Beer Market: Slow Decline To Continue

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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.
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