Beer consumption is declining worldwide, and the pandemic is only making things worse
Over the past 40 years, beer consumption in Germany has been declining. In 1980, the average West German drank a bathtub of beer (about 150 liters) per year; now it is only two-thirds full: less than 100 liters per capita per year. The year before last, 2019, was the first since 1960 that the average German drank less than 100 liters of beer (99.7).
In 2020, the decline continued: only 94.6 liters were consumed. On the one hand, the decrease in consumption is linked to an aging population: the older a person is, the less alcohol they typically consume. On the other hand, today's youth drink quite differently from their fathers and grandfathers, mainly due to a significantly increased focus on their own health.
Germany is no exception. Beer consumption is declining worldwide, but for many decades the global decline in beer consumption did not lead to a reduction in production, due to population growth. Brewing peaked in 2013, when 1.97 billion hectoliters of beer were brewed on the planet. Since then, production has fallen almost every year, declining by more than 8% over eight years.
During the pandemic, consumption dropped even more noticeably because many countries imposed lockdowns and restaurants closed. Draft beer stopped selling altogether, and breweries were forced to destroy stocks or give them away for free.
Increased consumption of bottled beer at home did not help offset the losses. After the pandemic, draft beer sales will return to previous levels and even temporarily increase, but this will not change the long-term trend. Nevertheless, last year Germany brewed the most beer among EU states – 24%, or 7.5 billion liters out of Europe's 32 billion.
Consumption of regular beer is hindered not only by health concerns but also by the possibility of driving. Instead of the traditional hoppy drink, non-alcoholic beer has gradually come into fashion: invented in the early 1970s in the GDR, it was called "driver's beer" (Autofahrerbier or Aubi). West Germany held onto alcohol until 1979, when the Oetker group first introduced its non-alcoholic brand Clausthaler in supermarkets. However, demand for alcohol-free beer has truly grown only in recent years – since 2007, the turnover of non-alcoholic beer in Germany has more than doubled. Today it is produced under 400 different brands, the most popular of which are Krombacher, Jever Fun, and Bitburger.
Germany is traditionally considered a country of brewers, but in the list of the world's largest producers, German companies are almost absent – they occupy places far from the top ten. This is because the 1990s saw a period of mergers and acquisitions in the industry, and since then giant brewing conglomerates have emerged and grown.
The undisputed leader among them is AB InBev. In the name of this international conglomerate, which produces every fourth bottle or mug of beer drunk in the world, one can barely recognize the breweries it has absorbed with their history – American Anheuser-Busch, Belgian concern Interbrew, and South African Ambev. Its market share, with brands such as Budweiser, Stella Artois, and in Germany – Beck's, Franziskaner, Hasseröder, and Löwenbräu, is 25.7%.
The closest competitor is the Dutch concern Heineken, with 12.2%, selling among others beer under the brands Heineken, Birra Moretti, and Desperados. Third is Danish Carlsberg, with 6.6% of the beer market and brands Carlsberg, Tuborg, Astra, Duckstein.
The top ten largest global brewers also include Chinese concerns CR Snow (4th place, 5.9% market share; its product Snow is the best-selling beer brand in the world, virtually unknown in the West but most popular in China), Tsingtao (6th place, 4.4%), and Yanjing (10th place, 1.9%); American Molson Coors (5th place, 4.6%); Japanese Asahi (7th place, 3.1%); French company BGI/Groupe Castel and Turkish Efes (8th and 9th place, each with a 2% market share).
The closest German brewer to them is the Radeberger Gruppe. Its headquarters are in Frankfurt am Main, but it is named after its most famous brand, which is of Saxon origin. A subsidiary of the Dr. Oetker holding, Radeberger ranks 22nd in the list of the world's largest beer producers and holds 0.6% of the market with brands such as Radeberger, Jever, Schöfferhofer, DAB, Tucher, and Sternburg. In 24th place is a German company from Frankfurt an der Oder with the unremarkable name TCB Beteiligungs-Gesellschaft, producing Gilde, Feldschlößchen, and own brands for many supermarket chains.
And in 25th place is Oettinger, which once revolutionized the German beer market by selling drinks at almost half the price of competitors. For many years, the Oettinger brand was the best-selling in Germany, although not every beer lover was willing to admit to consuming its cheapest option. Now Krombacher leads, with Oettinger close behind. Krombacher beer is not only the best-selling in Germany but also the brand with the highest advertising spending, reaching 70 million euros per year.
Despite takeovers by large conglomerates, many popular brewing companies remain in the hands of the founders' heirs: Krombacher, Oettinger, Bitburger, Veltins, Warsteiner are family businesses.
Germany is one of the world's largest producers of raw materials for brewing. Bavaria is home to the world's largest hop-growing region, Hallertau, where over 40,000 tons of hops are grown annually. Other German hop-growing regions – Tettnang on Lake Constance or the valley at the confluence of the Elbe and Saale rivers – are significantly smaller. Despite the decline in beer consumption, hop production in Germany is expanding, with new areas being added to existing ones.
Demand for German hops is rising mainly due to the growing popularity of craft brewing (especially in the US) – small breweries brew beer with increased attention to detail, "by hand," and often with a much more intense flavor, which requires more ingredients. Craft brewing emerged as an alternative to mass industrial beer production with an average taste, which connoisseurs mock as "TV beer" due to its abundant advertising. Such producers deliberately alter the taste of the final product, trying to move as far as possible from the options familiar to the average consumer.
Often, craft beer is stronger than regular beer, which requires more hops; to brew a liter of regular beer, 1 gram of hops is needed, while a liter of craft varieties uses 7 grams or more. This brings more bitterness, but also a much more intense aroma. The production volume of such varieties is only 2.5% of the global total, but this beer consumes 20 to 25% of all hops grown worldwide.
Despite declining consumption, the popularity of brewing as a hobby or small business is steadily growing, as is the number of producers – mainly due to the emergence of new microbreweries producing unusual varieties outside the framework of mass taste. In Germany, large breweries themselves attract with a variety of styles, and there are enough medium and small ones with centuries-old history and excellent drinks, so the growth in the number of craft breweries is less noticeable.
According to the latest European statistics, there are only two of them per 100,000 residents in Germany. This is less than in many neighboring countries (Austria – 3, Netherlands – 4, Czech Republic – 4.5, Luxembourg – 5.5), and far from the European champion in craft beer – Switzerland, where there are more than 12 such breweries per 100,000 residents.