Beer consumption during a pandemic: do people drink the crisis? – Economics

Axel Dahm has led the Bitburger Brewery Group as a management spokesman since 2016. The family business includes the Bitburger, König, Königsbacher, Köstritzer, Licher, Nette and Wernesgrüner brands. There is a business partnership with the Benedictines. In the German beer market, Bitburger (turnover 2019: 792 million euros) is the market leader in draft beer, the Radeberger group is the largest brewing group and Krombacher is the only brand with the highest turnover. Dahm is an unusual manager. He worked as a therapist before moving into business. A father of five also writes children’s books. His first work is a winter fairy tale called “Chocolate Bear and Marzi Bunny”.

Mr. Dahm, drinking wisdom praises the beneficial power of beer in times of crisis. “If you don’t think it’s working anymore, come for a beer” and so on. Do German citizens drink against the corona crisis?
No, on the contrary. In times of crisis, people pay even more attention to their health. We benefit from our alcohol-free beer. It sells very well. But we have seen this trend for years.

How hard will the German brewer be this year?
The year is not over. But the catering and social business has been dormant for many months and there are still no major events. The beer gardens had two good months in July and August, but now autumn is coming. I expect that consumption – in the period after the Corona, ie the so-called new standard – in the area of ​​catering and events will be 20 percent lower than in the previous year. In return, a little more bottled beer is bought. Here we expect an increase in sales in the entire industry by three to five percent. But exactly what it looks like varies from brewer to brewer. At Bitburger, we are quite satisfied with the first half of the year in terms of retail. With Bitburger, Benediktiner and König Pilsner, we were able to grow much faster than the market.

Axel Dahm has been at the head of the Bitburger brewing group since 2016. In addition to Bitburger, it also includes well-known brands such as König, Wernesgrüner, Licher … Photo: Bitburger

But you earn less from bottled beer than from draft beer.
Yes it is true. In addition: the catering business is very important for branding. Freshly draft beer is, after all, something special. That’s why it’s a shame what’s going on. It is a very difficult period for our partners.

They supply 50,000 pubs and restaurants, no other German brewery has as many catering partners as Bitburger. Is it a disadvantage now?
No. At the moment, of course, we have disproportionately high sales losses, but we believe in gastronomy and support our partners. And this time we will use attractive catering facilities from our competitors. We did quite well in the first half of the year.

Do you chase each other’s good addresses?
This is common in this industry. But some competitors have shifted to a lower gear this year, not us.

Breweries not only sell beer to hosts, but also finance equipment. The gastro crisis will hit you twice.

We choose our partners very carefully and value serious and sustainable funding; both sides benefit from this, which you see, especially in times of crisis such as now. So we have relatively few failures, less than our competitors, if we may say so.

With Benedictine, you will open your own brewery for the first time in November. Is this your new gastro strategy?
We are opening the first self-service Benediktiner Weissbräuhaus in Giessen in close cooperation with Benediktiner Weissbräu GmbH, and it will certainly not be the last. Bavarian-style restaurant and beer garden – there is a lot of future in this concept, both at home and abroad.

Are you planning such breweries for Bitburger as well?
No, at Bitburger we follow a different strategy. We are very closely involved here, right up to the design, but we always do it in cooperation with our tenants, so we do not act as operators.

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What changed the corona crisis for you and your brands?
We focus more on certain brands in certain regions. We did it very early. This is now helping us in the competition.

Will Köpi, Licher or Wernesgrüner already exist nationwide in the future?

Yes of course. However, we focus our marketing and especially our advertising on these brands in certain key areas. For König Pilsener, these are North Rhine-Westphalia, northern Germany and recreational areas in the North and Baltic Seas. In this way, we avoid unnecessary waste and can act specifically where our brands also have the greatest potential.

The German national football team advertised Bitburger. Why did you terminate your advertising contract?

Everything has its time. The partnership worked very well for years and made Bitburger known. Now, however, it is much more important to explain what is special about Bitburger. Consumers are also interested.

Hops instead of football: Bitburger changed advertising. Photo: ZB

The thing with sealed hops.
Yes, we grow our own hops sealed with a bitburger with the Dick family. This defines the style and sets us apart from almost all competitors.

But no one knows what sealed hops are.
You’re wrong about that. Many people want to know if the hop breeder Andreas Dick, who can also be seen in our advertisement, really exists. And yes, it does exist. The municipality of Holsthum, where his farm is located, and the whole region benefit greatly from advertising. A lot of people want to see it. The benefits here for gastronomy and the number of hotel stays is increasing.

Quality was not always worth it. In the past, branded beer was often wasted in stores. How is it at the moment?
I understand business. Most men, especially the older ones, hardly know the prices. But they know what beer costs. As a retailer, if you want to lure men to the store, you can’t do it with crispy vegetables or detergent. The beer box is a draft horse for men. But fortunately, disproportionate special offers of 8 or 9 euros per box have become rarer. At the moment, however, we are again seeing individual outliers on the market. We don’t belong, we don’t lose beer.

If you believe the Brewers’ Association and its statistics, then the desire for beer of German citizens has been declining for years. What does this mean for the brewing industry?
This applies not only to beer, but to all alcoholic beverages. People are more disciplined and want to live healthier. But we are selling more and more alcohol-free beer. After Pils, Hellem and mixed beer drinks, it is already the fourth strongest segment. However, non-alcoholic beer does not appear in the statistics of breweries.

Breweries make less from bottled beer than from draft beer. Photo: dpa

How many breweries will not survive the dry spell?
When the cake shrinks, some will have to struggle and the corona crisis accelerates it. But this year we will not see the great death of breweries. This is due to relaxed insolvency regulations and the extension of shorter working hours. But next year and the following year, some brewers and hoteliers will certainly have to give up. Unfortunately, we already see it in gastronomy. But it is not the case that all brewers are in crisis. There are breweries, especially regional breweries, that have done a very good job and can even grow.

Why aren’t any of the main brewing groups from Germany?
Many international breweries used to focus on conquering other markets. Take Heineken, for example, the Netherlands is a small market, so you have to grow outside your own country. Perhaps German breweries have been concentrating on the domestic market for too long.

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What beer do you like to drink the most?
I have five children, so I can’t say which ones I like best. It’s the same with our beers. I especially like our Bitburger Winterbock. We introduced it last year for the winter season and it will return to stores next month.

You also write children’s books. And writing is not the only unusual thing. You’ve had an interesting life and you’ve seen a lot, including studying psychology. Does it help solve crises?
Yes. It helps to remember from time to time what really important things are. This helps when you can take responsibility for the company, especially in difficult times.

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