RESEARCH: German beer market continues fall
However according to a report by industry analyst Canadean, several segments performed strongly led by beer mix drinks, consumption of which increased by 30% during the year.
With per capita consumption almost 60% 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.
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.
German consumers are tending 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% since 1998.
Big Pils offer no cure for headaches First introduced in the 1970s, Pils grew rapidly until the early 1990s and is still dominant, accounting for an estimated 67% 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.
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 mix drinks only account for 3% 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.
Are cans set to crumple? The number of discount stores in Germany has risen by some 40% in the last four years. Low price private labels sold by the discounters have helped strengthen off-premise sales which now represent almost 72% of total beer volume. This growth has 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% to 25%.
The uncertainty regarding Germany's economy should help support the drinking of inexpensive beer at home, but the introduction of a deposit scheme on cans from January 2003 is expected to dramatically change the future packing mix. Although certain segments should perform strongly, Canadean predict that the beer market will continue to decline in 2003 and expect consumption to fall by 5%.
Sectors: Beer & cider
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