"Our position is between classic, industrial beers and the craft segment" - Interview, Brauerei C&A Veltins export manager Udo Bruns and UK agent Steve Holt
Brauerei C&A Veltins is celebrating 500 years of the German purity law
Last month, just-drinks deputy editor Lucy Britner visited Brauerei C&A Veltins in Meschede-Grevenstein, Germany. The family-owned company used the visit to announce marketing activity to mark 500 years of Germany's purity law, the Reinheitsgebot. While there, Lucy sat down with export manager Udo Bruns and UK agent Steve Holt to discuss the role the law plays in today's 'craft culture', the rise of no- and low-alcohol offerings in Germany and why Veltins is only brewed in one place.
just-drinks: Why are you promoting the purity law?
Steve Holt: Because it's the 500th anniversary, a number of brewers have used Reinheitsgebot as almost a celebration, to remind consumers that they're sticking to this tradition and not adding any additives to the beer. In Germany, Veltins has produced a retro pack with a label from the 1960s to celebrate. For the export market, it's a great opportunity to remind consumers and the trade that, in a very crowded market, here is a beer that is still very traditional in its style and also is unpasteurised. It's a great opportunity to say the craft market is interesting but, actually, there are still products that have been around for generations that fit that market as well.
j-d: Is there a problem with having such strict rules, in this age of craft and innovation?
Udo Bruns: I don't think so. We are able to create a million different types of beers with these ingredients. We launched traditional 'landbier' Grevensteiner two years ago.
Export manager: Udo Bruns
SH: The company's beer-mix products are obviously not Reinheitsgebot but the beer that goes into them is, so they are being innovative from that perspective. But, making beer with cardamom pods, for example, probably wouldn't appeal to the German brewers right now. Having said that, it isn't actually a law, so I think German brewers are free to experiment in that way if they want to. They are just choosing not to.
UB: The German consumers expect German beers to be brewed under the purity law.
j-d: Is Veltins' position an advantage against all of the noise around craft beer?
UB: Absolutely. Our position is between the classic, industrial beers and the craft segment.
SH: Pilsner is a classic style of beer. An extension might be to produce a pilsner with a lot more hops: There are some around. That could be a development for Veltins in the future and would still be Reinheitsgebot.
j-d: The Veltins portfolio contains several radlers and non-alcoholic beers. What has driven you to produce low- and no-alcohol products?
UB: In the German market, drinking and driving is always a problem. The blood alcohol limit is 0.5g/l in Germany so that means a maximum maybe of one beer. Products such as radlers at 2.4% abv - or alcohol free - are alternatives to beer. Also, people are always searching for different tastes - such as elderberry or citrus.
j-d: Is the trend being driven by younger consumers?
UB: Yes. And the beer-mix range is also being driven by young people. Our V+ line is very young [V+ is a mix of beer and flavours. V+ Remix launched earlier this year].
SH: The other difference is that the legal drinking age is 16 in Germany. So, people go to bars at a younger age and having low- and no-alcohol choices is very important. Non-alcoholic beers seem to be growing again in the UK. I'm not sure what's driving it - maybe the quality and the production is better.
j-d: Is there a worry that these products dilute the brand equity?
UB: It's not a problem to launch such a product under the name of Veltins. It fits our philosophy and strategy.
SH: It has to be said that the beer-mix products - V+ for example - are not really something for the UK market. There have been a number of fruit-flavoured beers in the UK and they haven't been a great success. I don't know whether that's because our drinking age is a little bit higher so that when people get to 18 they already have more mature tastes. The profile of a beer-mix drinker in Germany is under 20.
j-d: You reported a 0.3% sales uptick in calendar-2015. What are your growth ambitions?
SH: From an export point of view, we've had steady growth. The strategy is not to be opportunistic. You could say that markets like China, for example, are opportunistic. Brewers are rushing to China because there's a volume opportunity, but it's quite often price-driven and [the beer] is quite often there for as long as you have the lowest price and then something else comes in. I think the Veltins philosophy is to sustain a steady amount of growth.
UB: For example, we have four distribution partners in China. They buy Veltins and sell Veltins, but there's no strategy at the moment behind this. At the moment we feel it's volumes - it's mostly a business for cheap beers. It's not our philosophy.
SH: If Veltins can generate 10% to 15% growth every year, that would be good.
j-d: If one of the big global brewers knocked on the door, would there be an appetite to sell?
UB: I don't think so, no. I don't think there's any reason.
j-d: Would you brew Veltins in different markets to help speed your growth?
UB: No. The philosophy is to produce our product at this place.
SH: Packaging in other locations - that's an opportunity. Particularly with returnable kegs. But, the beer itself, I could never see in the short term, with the current management philosophy, that would be allowed. If you say "it's an authentic German recipe brewed in Korea", it's not the same.
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