German beer market

In the articles most of the price increases concern the on-trade however. Though I have read elsewhere that some brands have raised prices also in the off-trade, Oettinger being one of them supposedly. With the on-trade making up only a fifth of the beer sales in Germany I'm guessing the breweries would like to see higher retail case prices, but then it's easier to raise prices in a tied house where you don't have dozens of other breweries to compete against, compared with a retailer (which I guess is why they have resorted to such things as colluding on pricing via cartels).

 

I hadn't heard that, and a quick Googling can't find anything on it either. But if it were true, that means anything they sell now goes directly to the bottom line.
What's COG?

 

Cost of Goods? Ingredients.

5% seems about right. There was a graphic from a few years back showing the breakdown of costs in bottle of beer. @jesskidden might have it.

 

Here's a couple for US "commercial" beer:

 

The cost of goods is indeed likely modest (e.g., about 5%) for a 'standard' American beer (e.g., Budweiser) but with the popular American craft beer styles (e.g., IPA, DIPA, etc.) the percentage for COG is likely much larger than 5%.

Perhaps Weedy (@honkey) can provide more details here?

Cheers!

 

https://m.facebook.com/story.php?story_fbid=3111106065576817&id=100000323625610[IM

Smaller craft craft b that use bags of grain pay much more per pound than those that use super sacks, the cost goes down again when the buy a truck load from the Maltsters, and down even more when buying by the train grain car load (or 10 at a time). There are some economies is scale for sure.

 

From my point, it is mostly 1, 8 and 9.
1. It is not just the costs, you loose your drivers licence
8. That is right, the federal statistic is based on beer tax, so the figures are accurate, but do not include alc-free (there is no beer tax on alcohol free beer). Other figures (NIelsen) include alc-free, but are not accurate.
9. That is a main point, not accepted or even denied by the brewing industry, but it is a fact: Drinking lot of alcohol is unhealthy.
2./3. The tradition of after work or lunch beer died 20 years ago. It cannot be responsible for the decline in the last years.
4. Demographics are used as an excuse by the industry. It is a point to distract from the poor management in the brewing industry.
5. The population in Germany is not decreasing
6. There are no figures for that.
7. Difficult to say. Do Radler and alcopops replace beer? I suppose they just replace mixing the stuff by yourself.

 

From the above linked article (with emphasis in bold by me):

“Radeberger Group, market leader in the German beer market, says goodbye to the independent sales organization of its craft beer subsidiary Braufactum. From next year on the Radeberger organization will take over the distribution of the specialty range of beers which reached at its top about 15,000 hectoliters.”

So, this is just a ‘reorganization’ of the sales group? From now on the Braufactum beers will be sold by the Radeburger sales organization? If so this will save money by consolidating the sales responsibilities.

Hopefully the Brausfactum sales folks who lose their jobs will find other positions in the German beer industry.

Cheers!

 

The beers are very easy to find; they have their own special stand-up fridge in the beer section for most supermarkets around here. Hard to miss. In the beginning (8 years ago or so...), they also had a number of imported craft beers in the fridge with their own offerings: Firestone, Mikkeller, and Boon Gueze among others. It was a decent little selection for a German supermarket. But for whatever reason, that selection went away and now they only really have their own stuff.

Pricing is typical "craft": €2.00-2.49 per 0.33L. The beers themselves are OK. Nothing special. They make a variety of fairly standard "craft" beers: 2 IPA's, a Pale Ale, a Saison, a Weizen IPA... they have fancy names and very good descriptions on the bottle to explain to new drinkers what sort of flavors they are getting. To be fair, it is all fairly well done. Slick and well-marketed.

But for me, at the end of the day, there are two main reasons that I never buy their stuff. First, the beer doesn't really merit the price. It is forgettable beer. They don't make a single beer that I can't get a better version for the same price either at the same store or at my specialty Getränkemarkt. Second, this may just be my experience, but I would guess that about half of the time I actually bought their beers, I couldn't get my Pfand (deposit) back, even when I tried to return the bottle at the same exact grocery store. It's not a lot of money, but it irritates me enough that I hold a grudge.

 

Thought this story was interesting, it's about a newish Bavarian brewery, Starnberger Brauhaus, which has recieved an investment from the family that owns Krombacher after experiencing strong growth year over year and is expanding their production capacity. The brewery makes a Helles, a "naturtrübes" Spezial, Weissbier and a starkbier. I guess for Krombacher it's interesting to have access to a fresh Bavarian Helles brand that they can sell in the rest of Germany (as seems to be the plan with the Schadeberg people helping with distribution). Interesting how a new brewery can get off the ground in Bavaria selling traditional styles, one would think that there exists enough old and family owned breweries in that region to cater to that market.

But perhaps they have found a local market where there was a vaccum of sorts? I'd be curious to know what the local market looks like and what sort of breweries and beers that they compete against. It looks like they are serious though since they have classically trained brewers onboard, that should make a big difference I imagine, instead of having homebrewers reinventing the wheel and calling the wheel they made superior to what existed previously. The latter approach has resulted in some less than stellar beer here in Sweden.

The planned production capacity is 70 000 hl or about about 59 000 bbls, here's a nice graphic that helps put that number into perspective visavi the German beer market. No wonder the going is tough for small breweries when there are that many small breweries, yet the piece of the pie that they control is so small (78.8% of all breweries, those that brew up to 10 000 hl, brew 1.73% of all beer produced). At that rate they would leapfrog alot of the competition, even if they would still be tiny compared with the big breweries..

 

Somehow, i feel like Oetker Gruppe stopping selling overpriced mediocre craft in every supermarket and Stone stopping brewing in berlin are..good things for the german craft beer market.

I mean, there are a few bigger-ish breweries who have "figured it out"how to do "craft" in germany,in my opinion, mainly Maisel's Bayreuth, but to a lesser extent Crew Republic ,Riedenburger and Ratsherren: Solid,(mainly)consistent quality, reasonable pricing...

Another thing though: I feel like most IPA sold in germany is sold through the likes of Aldi and Lidl these days- their IPAs are sadly better than most of the random stuff you find in german supermarkets labeled "IPA", for a fraction of the price..

 

Good point. I guess one conundrum for large breweries (once they get to a certain size) has always been how to turn small niche styles into big sellers. It's certainly easier to imagine styles such as Helles being scaled up to a level where it makes financial sense for Krombacher to become involved, if the right combination of product and marketing can be found. I mean they did it with Pilsner back in the day, why not Helles today? Finding that next big thing seems to be alluding the major brewers in many countries.

I noticed that they were selling their beer at 22 Euro per case on their webshop, that's certainly a more appealing price level from a brewery perspective, and one which I'm sure Krombacher would like to sell their pilsner for if they could.