No summer fairytale for brewers: Beer sales collapse

No summer fairytale for brewers: Beer sales collapse


Referreport

For German beer brewers, the summer fairytale they had hoped for has failed. Despite the European Football Championship in their own country, beer sales continued to decline in the first half of 2024, according to the Federal Statistical Office. Domestically, 3.4 billion liters of the traditional beverage went to retailers and restaurants from January to June – 0.9 percent less than a year earlier.

The German Brewers’ Association cites the changeable weather as a key factor in the sluggish beer business. “During the European Football Championship, the rollercoaster ride of temperatures and the frequent storms ruined business for many pubs and many a garden party was cancelled,” says managing director Holger Eichele. Nevertheless, a whole series of breweries were able to benefit from this sporting event.

New negative record in sight

Even including exports and tax-free house drinks for their own employees, sales at the approximately 1,500 companies fell by 0.6 percent to 4.2 billion liters. That was almost 30 percent less than in June 2006, when football Germany celebrated its summer fairytale at the World Cup. Everything indicates that 2024 will be even weaker than the already poor previous year, which, with just under 8.4 billion liters, even undercut the Corona year 2021.

The only disappointment for the industry was the European Championship month of June, with a drop in total sales of more than 11 percent compared to the same month last year. According to the statistics, this was the worst June since the beer tax was revised in 1993. Domestic sales fell even more sharply, by 13.5 percent to just under 626 million liters. Retailers simply did not reorder. “It’s actually impossible to make up for this,” says a spokesperson for the Sauerland brewery Veltins.

Non-alcoholic beer is increasing significantly

One glimmer of hope for brewers is non-alcoholic beer, which is not included in the official statistics because no alcohol tax is due. According to Eichele, non-alcoholic beers are becoming increasingly important for breweries and have been increasing in volume for years. According to official statistics, the volume has more than doubled since 2013. Germany is the world leader with more than 800 non-alcoholic brands brewed according to the German Purity Law and a market share of 8 percent. “Soon, one in ten beers brewed in Germany will be non-alcoholic,” says the brewing official. Important export destinations for the new products are the USA and the countries of the European Union.

The hype surrounding the “Alcohol-Free Hell” from the traditional Munich brewery Augustiner shows just how well non-alcoholic beer fits in with the times. On the market since March, the stuff is sometimes difficult to get hold of even in Munich because it prefers to supply contracted restaurants and drinks stores only receive a few cases. An alcohol-free beer garden even opened recently in Munich.

Trends are against beer with alcohol

The world’s fifth-largest brewing industry has otherwise been suffering from a declining thirst for beer for years, despite a growing population. Social trends towards a healthier and more active lifestyle are meeting an increasingly older consumer base. Customers in many countries are also groaning under the burden of high inflation, according to the latest industry report from the world’s largest hops trader BarthHaas from Nuremberg.

Since 1993, beer sales in Germany have fallen by more than a quarter and the shrinking market is characterized by overcapacity. Last year alone, breweries with a production capacity of more than 200 million liters were taken off the market. Many other breweries are facing major investments in order to convert energy-intensive production to sustainable energy sources.

Football no longer a sales booster

Veltins boss Michael Huber also believes that football’s appeal to beer consumption has faded. He says: “The spark of hope for the European Championships has not been ignited after the early defeat of the German team in the tournament killed off the demand that had begun to grow.” Only around the European Championship stadiums were short-term but quite contradictory effects felt in hotels and restaurants. “Local restaurants were often drained dry by the UEFA fan miles,” says Huber. The importance of major football tournaments as a sales boost had already fallen significantly with the last winter football World Cup.

Source: German