German breweries are in a predicament: local young people prefer non-alcoholic products
Last summer, the Longborough Brewery, located in northern Bavaria, Germany and with a history of 172 years, was completely shut down.
Richard Hopf, former head of the brewery and currently in charge of liquidation, said, "The brewery is suffering greatly. When sales continue to decline and costs continue to rise, there is almost no room for long-term consideration
The predicament of Longborough Brewery is not an isolated case. The production of eoe beer is a typical energy intensive industry, which relies on stable and reasonably priced energy supply from fermentation to refrigeration to packaging.
The soaring inflation and energy prices have indeed intensified the financial pressure on German brewers. What is even more worrying is that in this country known for its beer culture, young people are increasingly distancing themselves from alcohol.
Analysis has found that for Generation Z (born between 1997 and 2012), beer is no longer a daily necessity, but an occasional enjoyment. Even if they occasionally drink a glass of wheat beer or Pearson beer, they are increasingly inclined to choose the non-alcoholic version.
At the beginning of this month, a report released by the German Federal Statistical Office showed that beer sales in Germany fell by 6.3% year-on-year in the first half of this year, hitting a new low since statistics began in 1993; Only in the first half of 2020, when the COVID-19 epidemic began, did such a year-on-year decline occur.
It should be pointed out that the "quit drinking trend" of Generation Z is not only occurring in Germany, but also in Europe and the United States, where young people are reducing their alcohol consumption. The reasons include: young people have less disposable income than the previous generation, the prevalence of health preservation trends, and a higher awareness of the health risks associated with alcohol consumption.
As this concept spread, about 1500 breweries in Germany were forced to transform. But not all can survive - between 2023 and 2024, 52 breweries across Germany have closed down, marking the largest decline in 30 years.
Among all the changes, the biggest one is undoubtedly the explosive growth of non-alcoholic beer. Although 90% of beer sold in the German market still contains alcohol, the production of non-alcoholic beer (defined as beer with an alcohol content below 0.5%) has almost doubled in the past decade.
We believe that flagship alcoholic beers are unlikely to have significant growth in the German market in the coming decades, "said a spokesperson for the German company Krombacher." Obviously, the growth points are in low alcohol and non-alcoholic beers
However, non-alcoholic beer has become saturated, and large companies can quickly launch new products and acquire mature brands, while small breweries find it difficult to break through.
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