When you think of the German beer market, words like “decline” , “slump”, or “collapse” would probably seem bizarre. But Reuters published an interesting piece about this ongoing long-term phenomenon and it’s a much bigger problem than most outsiders realize.
With young Germans turning to spirits and non-alcoholic fruit drinks, beer sales fell 2 percent last year alone.
Germany’s DBB beer association has sounded the alarm.
“Beer risks becoming an outdated product,” it warned earlier this year. Nowhere in the world is beer as expensive to make or cheap to buy as in Germany. Nowhere does brewing make so little money, the DBB says.
The explanations are simple enough and easy to guess. The beer didn’t change but the consumers did.
Two decades ago, German brewers were thriving amid booming demand. But they missed trends, such as developing flavoured beers, and did not invest heavily in emerging markets, says Trevor Stirling, beverages analyst at Bernstein.
An attempt by brewers to win world heritage status for the Purity Law, issued at Weihenstephan’s doorstep in 1516 by Duke Wilhelm IV of Bavaria, may help exports but is no panacea.
“Achieving heritage status isn’t going to make an 18-year old German drink a Veltins beer over a Bacardi,” said Stirling.
More exports are going to be a key to growth, but they also need to branch out as local consumers tastes take on new permutations.