With Oktoberfest looming large in the near future—the real deal kicks off on September 19, with various iterations of the event taking place globally—now is as good a time as any to take a peek into Germany’s beer market.
Beyond Lederhosen and Steins: Beer in Germany
Beer is the drink of choice in Germany, and Germans take their beer seriously. So much so, that a nearly 500 year old law called the Reinheitsgebot, or purity law, governs exactly what is allowed to be sold as beer in the country.
Under the Reinheitsgebot, only water, barley, hops and more recently, yeast are legitimate ingredients for beer. The law doesn’t apply to imported beer, but still has a hand in beer brewed in Germany.
In such a well-entrenched beer culture, one might expect to see booming market projections. But this isn’t necessarily the case.
Like many well-established global markets, the beer market in Germany is saturated and there’s not much room for real growth.
The market was valued at $40.10 billion in 2014, and is expected to eke out some modest growth to reach a value of $42.54 billion by 2019, growing at a CAGR of only 1.19%.
But while beer production gradually decreased from 2009 to 2013, the number of active breweries is slowly climbing. Additionally, Germany is following in the footsteps of the US and developing a taste for craft beer, with the second largest number of micro-breweries in the EU, after the UK.
The craft beer segment will provide some room for decent growth in the German beer market, as many young people develop a preference for beverages with local origins.
However, the growth of craft brewing in Germany is still truncated thanks to the aforementioned purity law. Although a more liberal beer law was introduced in 1993, basically overturning the Reinheitsgebot, the old law is still influential enough to give some brewers pause before venturing too far off the beaten track when pursuing new flavors and varieties to introduce in the German beer market.
