Export stock instead of domestic Pilsner – Germany's breweries in crisis

Germany is proud of its beer culture. To the many breweries, some of which are centuries old, for example. And on the great variety of varieties, which include Pils, Kölsch, Weizen, Helles, Maerzen and Zwickl. And of course the Purity Law from 1516. It is considered one of the oldest food laws in the world and to this day limits the beer ingredients to water, malt, hops and yeast.

But the German brewing industry is in a serious crisis. Even before the pandemic, sales figures had been declining for years due to changing consumer habits, increased health awareness and demographic development with a rapidly aging population.

But there is one winner: beer from abroad. According to the latest figures from the German Brewers' Association, 4.7 million hectoliters and thus almost seven percent of the volume of beer sold in Germany in 2021 are imported goods. Five years earlier, the proportion was one percentage point lower.

The number one international beer on the German market comes from the Netherlands: Heineken in the green bottle or green-grey can with a red star. They are followed by Budweiser from the Czech Republic and Gösser Radler, which comes from Austria but now also belongs to the Heineken Group, the second largest brewer in the world behind industry leader ABInbev.

Desperados complete the Heineken range. The tequila-flavored beer made it to sixth place in the top ten foreign beers in Germany, according to figures from the industry service “Inside Drinks”.

In total, the three Heineken brands in Germany will have a sales volume of a good 1.2 million hectoliters in 2021. This is not far from the production volume of well-known suppliers such as Augustiner or Erdinger. The fact that the million mark was broken for the first time is only supposed to be an intermediate step.

Heineken expects further growth. Before that, sales had more than doubled within a few years. Geert Swaanenburg, Heineken's head of Germany, wants to double the amount further.

And that's not all: "The goal is to become the number one premium brewer in Germany," says the manager. During the pandemic, Heineken was the fastest growing beer supplier in Germany. The boys "no longer automatically reach for the beer that their own parents or grandparents drank, i.e. above all Pils, but they find their own way," he believes.

According to market research data, younger people tend to prefer the less bitter varieties. According to the GfK Consumer Panel, a good 41 percent of Pils buyers in Germany are over 60 years old. In the age group up to 39 years, the range of buyers for the classic Pilsner is only 15 percent and among the under 29-year-olds it is only 6.6 percent.

"Young households enter the beer market primarily through light beer and lager," says GfK researcher Horst Zocher. And in fact, the proportion of these age groups in the two categories is 27 and 34 percent respectively - and thus much higher than in the Pils segment. “It is not least the international manufacturers who benefit from this,” says Zocher. "Because they often offer beers from the lager category and thus reach an increasingly large range of buyers."

Heineken has therefore already followed up and launched the Italian lager beer Moretti in Germany in 2021. Country Manager Swaanenburg does not rule out that further beers from the worldwide portfolio of around 300 brands will follow. "Germany is now a focus market for us," he says.

Before that, however, the already established brands are to be supplemented with alcohol-free variants in order to create additional consumption occasions and to reach target groups. And the competition remains active.

Industry leader ABInbev, for example, senses an opportunity in the German market and, according to a spokesman, is strengthening both distribution and marketing, especially for the Mexican beer brand Corona and the Spanish San Miguel. It is no longer just six-packs that are offered, but increasingly also reusable crates with 24 third-litre bottles. "We see great potential in Germany."

According to Marcus Strobl, however, there can be no question of a breakthrough. The beer market analyst from market researcher Nielsen Germany registered measurable success of international beers in this country. "So far, however, it has mainly been individual brands that have developed particularly well."

Whereby the local competitors are definitely involved, as Strobl thinks. "Many breweries in Germany are aging and no longer reach their target groups as they used to," says the expert. And that is now being exploited. "Competitors from abroad are no longer just noticed, they are also taken seriously."

This applies in particular to Heineken with the brands Heineken, Gösser and Desperados. This is strong competition, say industry insiders. Concentrating on Germany could become a problem for many other breweries. Because Heineken will continue to gain market share with its sales and marketing power.

Heineken is the best-managed beer brand in the world, says Klaus-Dieter Koch, founder of brand consulting firm Brandtrust. "The focus of thought and action there is always the consumer and not the retailers or restaurateurs." German brewers, on the other hand, are too sales-oriented and price-fixed. In addition, they would have rested for a long time on the purity law. "That," says Koch, "is no longer of interest to anyone in the young target groups."

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