The German Beer Crisis With Brewery Closures, Germany Faces Brauereisterben
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.
A nice mug of beer has long been part of a balanced German diet. That is rapidly changing, however.
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."
German youth is opting for sweet-tasting alcopops over beer.
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.
Beer bellies are decidedly out of fashion in Germany.
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.
Even with less beer being consumed annually in Germany, Oktoberfest is still the country's claim to fame abroad.
"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."