The German Beer Crisis

[Menydh]

With Brewery Closures, Germany Faces Brauereisterben

Der Spiegel
February 4, 2005

Germany and beer have long been synonymous. But that is changing. With Monday's closing of two large breweries, the crisis facing the industry appears to be deepening. An aging population is partly to blame. But beer, as it turns out, just isn't cool anymore.

The threatening new word made its appearance on the German media stage in the mid-1990s. Brauereisterben. Dubbed after the term for Germany's dying forests, the word predicted the decline of the nation's breweries. The frothy favorite of thirsty Germans, the beer brewing industry started warning 10 years ago, was heading for a crisis. More and more beer-swilling Teutons seemed to be turning away from hops and malt and towards a healthier lifestyle of designer water and juice. To traditionalists in Germany and abroad, for whom the words "Germany" and "beer" belong together like sauerkraut and bratwurst, it's a horror come true.

As it turns out, the fear-mongerers were right.

On Monday, two large German breweries bit the dust. The Oetker Group, one of Germany's largest producers of beer, announced the closing of the 133-year-old Berliner Kindl brew factory in Berlin and the Brinkhoff Brewery in the western German city of Dortmund. Total jobs lost: 450. More ominously, experts in the brewing industry say the closures, just the most recent in an ongoing downward trend within one of Germany's highest profile industries are unlikely to be the last.

"There are many negative trends," warns Stefan Leppin, spokesman for the Radeberger Group, a major brewing operation also owned by Oetker. "We assume that consumption of beer in Germany will continue to drop and that the market will continue to consolidate. The German beer market is, on the whole, oversaturated by at least 30 percent."

That's right. Germans aren't imbibing enough of the drink that most of the world assumes flows out of the kitchen tap in most German households. More and more Germans are turning away from beer and more and more breweries are closing, cutting jobs or they are being sold to large, global brewing conglomerates like InBev (the company resulting from the recent merger of Belgium's Interbrew and the American Beverage Corporation) or the Heineken group. Whereas in 1994, Germans consumed 108 million hectoliters, by 2003 that number had dropped to under 94 million, according to the German Federal Statistical Office. The amount of frothy beverage each German is drinking each year is likewise shrinking quickly. In 1996, Germans still subscribed to the theory that a pint per day keeps the doctor away -- each person in the country threw back a healthy 131.9 liters that year according to the Association of German Beer Brewers. By 2004, per capita beer consumption had dropped to just 116.1 liters.

Beer is uncool

Even more worrisome for Germany's beer producers is the fact that beer is falling out of vogue with the country's teens and twentysomethings. Instead, Germany's youth, many of them under the legal drinking age of 18 (beer and wine are legal for 16-year-olds), are flocking to so-called "alcopops," alcoholic mixed drinks like Smirnoff Ice or Bacardi Rigo that often contain higher percentages of alcohol than beer but contain enough sugar and juices to completely disguise the taste of alcohol. Sales of alcopops have exploded in Germany since 2001. A tax on the drinks imposed in August 2004 to make them less attractive to young drinkers has put a dent in turnover, but they are still a major force.

"(Alcopops) taste really good and it is cooler to be seen with a bottle of Rigo than with a bottle of beer," 17-year-old Hendrikers of Frankfurt told the daily Frankfurter Rundschau. "The image of Rigo is much cooler and the bottles look better," he added saying he really doesn't like beer much.

The problem of a slowly disappearing desire for traditional tipple isn't just confined to Germany. France has also seen a drastic drop in wine consumption, with close to 500 vintners facing extinction in a country whose national identity is closely wrapped up in rolling hills covered with grapevines. The long decline -- the French drink only 13 gallons of wine per capita annually compared to more than double that in the 1960s -- means that by 2008, France will no longer be the world's leader in wine drinking.

In both countries, say analysts, the change can partially be laid at the door of intense government campaigns warning citizens of the dangers of drinking and driving and over-consumption. An increased emphasis on healthy lifestyles and fitness has also played a big role, especially in Germany. Beer, most believe, makes you fat and the beer belly is decidedly out.

Going to the juice bar instead of the corner bar

"An unholy alliance of health ministers is trying to squeeze the last bit of pleasure out of people," complains Peter Hahn, the chief executive of the Association of German Beer Brewers. "Moderate beer consumption is a part of our culture and of our life and gives us our desire to live."

But whereas the desire to live is being found by more and more people in the gym or the juice bar, the biggest problem facing the industry is demographics. Germany and Europe, famously, are both getting older quickly and the elderly, say both Hahn and Leppin, drink less beer. With a birth rate of just 1.4 children born to each German woman and no end to Germany's population shrinkage in sight, breweries may be in serious trouble. This development is further compounded by a struggling German economy which leads Germans to spend their evenings at home in front of the television rather than at the corner pub. In a very real sense, the beer industry is German society's litmus paper; the problems facing Germany can be read in the ever falling consumption of golden suds.

German beer brewers are not standing idly by. Even as many of the country's over 1,260 breweries (representing more than three-quarters of the European total) are being sold to international consortiums -- more than two dozen German breweries changed hands in 2004 and the trend is likely to accelerate -- many more are looking at trying to make their products more attractive to young consumers. Beer mixtures are slowly becoming more popular and packaging is gradually moving away from the staid brown bottle. Indeed, the brewer's association is doing what they can to help beer makers improve on the drink's stody image. Forums, congresses and conventions on topics ranging from the length of a beer-bottle's neck to improving marketing to highlight the two-year difference in the drinking age between beer and harder drinks are the order of the day. But, says Hahn, there is only so much that can be done.

"The young don't really want to have the same drink that their grandfathers and fathers drink. They want something peppier," he says. "We exchange a lot of ideas as to how to improve the situation but, in the end, it is up to the individual breweries to go through the doors we open."


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[bocian]

Truly horrific.

In Poland, hardly any of the breweries or distilleries remain in Polish hands, I would have never thought that Germany would be facing a similar fate...it's just a start but once the ball gets rolling...

I can't understand why people are turning to these 'alcopops', when in all honesty, these alcopops are truly poison, and hideously tasting to boot. They should be banned at once.

A beer a day is good for you! And if you live a semi-active life, you will not get a beer belly.

[Timo]

The "Beer out of vouge" thing is news to me. I've know about this other sweet stuff, but I never was attracted to it. Beer has always been in vouge for my family and the people I hang around. I guess I am not hip, but square. However, there is a saying from a song, "It's hip to be square." So those other alchopop or whatever people are the square to be hip ones.

As for the Bierbrauereien, that is a sad thing.
Too bad for the 450 folks that lost jobs; employment is a whole nother can of beans, but I guess they are tied to the shitty economy. Thanks USA, for saving "Germany" from the prosperity of Hitler, the one who did wonders for the german economy.



Anyway, I will still drink beer for the rest of my life. And if I am right, and I hope I am, I will drink it in the afterlife too... or maybe I'll try some mead.

[Dr. Solar Wolff]

Have any of you guys ever tasted an "alcopop"? They taste like sh-t. I would rather not drink anything at all.

[Johnny Reb]

Originally Posted by Dr. Solar Wolff

Have any of you guys ever tasted an "alcopop"? They taste like sh-t. I would rather not drink anything at all.

Fruit cider is ok, though I think they're referring to stuff like Smirnoff Ice, which is just gross. Girls like that sort of stuff. It's a disgrace that some men do as well.

[Zyklop]

Good news, actually. Nothing wrong with a healthier lifestyle.
And German culture doesn´t need to be associated with Bier and Sauerkraut in the first place.

[Nerthus]

I think beer is also healthier than pseudo drinks like Cola, Pepsi and the likes.

[Constantinus]

Kids here drink that bacardi breezer crap too. It's like filthy tasting lemonade, but apparantly they love it. Guess I'm getting old.

[Gesta Bellica]

LOL looks like i am against the grain..coz i kinda like to drink a Bacardi Breezer once in a while, even if beer is another pair of shoes, definitely better..same is for wine

[Timo]

Originally Posted by Aeternitas

I think beer is also healthier than pseudo drinks like Cola, Pepsi and the likes.

"A pint of beer may help protect against heart disease more effectively than red wine or spirits, researchers have found."

http://news.bbc.co.uk/1/hi/health/727912.stm

Old News, but just a reminder

[bocian]

Originally Posted by Timo

"A pint of beer may help protect against heart disease more effectively than red wine or spirits, researchers have found."

http://news.bbc.co.uk/1/hi/health/727912.stm

Old News, but just a reminder

Yeah, I've read and heard a couple of studies similar to this.