Beer consumption in Germany has increased for the first time since 1995. Germany's brewers have fought back against the rising popularity of wines and flavored alcoholic beverages (FABs) that has seen beer sales slump. Now the question is whether the distinctive beer/soft drink mixes that they have developed will catch on outside Germany and replace FABs as Europe's next trend.

According to figures released by Germany's Federation of Private Breweries, Germany's steady decline in beer consumption has been successfully reversed. So far in 2002, the country's drinkers have quaffed their way through 8.32 billion liters of the amber nectar, an increase of 1% compared to the same time last year.

The upturn may be small, but it is significant. It follows a concerted effort by both German and foreign brewers, such as Interbrew, Heineken and SABMiller. Rather than trying to recapture their dwindling core audience, the brewers charted a new course by launching products aimed at consumers who had previously not been big beer drinkers.

At stake was a lost generation of 18- to 25-year-olds that seemed to have abandoned the beer drinking habit, turning instead to the irresistible rise of flavoured alcoholic drinks and energy drinks. By blurring the lines between the product categories, brewers have successfully launched hybrid beer-based products.

Almost unique to the German market are drinks made of a mix of beer and cola, such as Felsenkellers Herford's 50/50 Bier + Cola. Taking the concept one step further is Arco-Valley, with their BiXX brand. This contains 60% beer and 40% cola, and has the added feature of being enhanced with caffeine and taurine, thereby creating a whole new product category of alcoholic energy drinks. At the same time, sales of shandy - premixed beer and lemonade - have increased by 50% in the last year.

Following the route to market taken by energy drinks and FABs, the trend took off in nightclubs and bars before moving into pubs and foodservice outlets, as well as retail. By responding imaginatively to sliding sales in Germany, brewers may have come up with the next trend in Europe's fickle and fast moving market for alcoholic beverages.

Related research: Datamonitor, "Germany - Beer" Industry Profile