Hope for German beer market
for several years now, but there are still some sectors of the
market which continue to grow, such as beer-based RTDs.
Hampered by a very weak economy, an ageing population and growing concerns about alcohol consumption in general, Germany's beer market declined further in 2002, the latest annual slide in more than a decade of shrinking volumes.
But despite this overall decline, several segments performed strongly, in particular beer-based mixed drinks, consumption of which increased by an outstanding 30 per cent during the year, claims a new report from Canadean.
With per capita consumption was almost 60 per cent higher than the western European average, the German beer market is the biggest in Europe and the third largest worldwide. The industry, however, remains highly fragmented - Germany boasts three quarters of all breweries based in the EU but only around a third of beer production, the report claims.
There are over 1,200 breweries in Germany, a figure that is likely to reduce in the medium to long term as a result of declining consumption and an increasing number of mergers and acquisitions.
This consolidation is inevitable as German consumers continue to move away from alcoholic drinks in favour of healthier options such as mineral water and juice. In addition, the core beer drinking audience of 15-34 year olds is shrinking as the German population ages. These factors have both contributed towards total beer consumption receding in each of the last four years and by some 7 per cent since 1998.
Pils offers no cure for headache
First introduced in the 1970s, Pils grew rapidly until the early 1990s and is still dominant, accounting for an estimated 67 per cent of the market. Brands produced in the eastern regions of the country have delivered dynamic growth but this has not been enough to change the fortunes of the segment or the market as a whole.
The second and third largest segments, export and the Bavarian speciality Weizen, built on the growth of 2001 with further increases in 2002. Although fourth-placed beer-based mixed drinks only account for 3 per cent of total consumption, they are by far the fastest growing in the market.
Ready-to-drink beer mix drinks are popular among younger consumers looking for something a little different. The best selling varieties are beer mixed with lemonade and cola, although a wide range of alternatives have helped broaden appeal. Strong marketing support, product development and growing consumer demand look like assuring future expansion, Canadean predicts.
Own labels keep sales rising
The number of discount stores in Germany has risen by some 40 per cent in the last four years, and the low price private label beers sold by the discounters have helped strengthen off-premise sales there. These now represent almost 72 per cent of total beer volume, and the growth has in turn fuelled the increased use of cans as a type of packaging. Over the same period, the share of total beer packaging enjoyed by cans has risen from 17 per cent to 25 per cent.
The uncertainty regarding Germany's economy should help support the drinking of inexpensive beer at home, Canadean suggests, but the introduction of a deposit scheme on cans from January 2003 is expected to dramatically change the future packing mix, with many retailers already removing cans from their shelves with a subsequent decline in overall beer sales.
Although certain segments should perform strongly, Canadean predicts that the beer market will continue to decline in 2003 and expects consumption to fall by 5 per cent.
For details of how to order your copy of Canadean's Beer - Germany report, click here.
