Germany, long known as a nation of beer lovers, is experiencing a surprising downturn in beer sales, with a significant drop even during the Euro Cup. However, one beer category—non-alcoholic beer—is bucking the trend with impressive growth.
Germany’s beer industry struggles despite football season
Germany’s brewing industry is facing a sobering crisis. As more breweries declare bankruptcy, beer sales continue to decline. In the first half of 2024, beer sales fell by 25.8 million liters, or 0.6%, compared to the previous year—a continuation of a troubling trend. Only one category of beer is seeing significant growth: non-alcoholic beer. It’s predicted that soon, one in ten beers brewed in Germany will be alcohol-free.
Even the UEFA Euro 2024 football championship, held in Germany from June 14 to July 14, couldn’t reverse the downward trend in beer consumption. Surprisingly, beer sales in June fell to their lowest level since 1993. Despite a rise in April, both May and June saw declines of 1% and 11.2%, respectively, according to the Federal Statistical Office.
Holger Eichele, CEO of the German Brewers’ Association in Berlin, attributes this to poor weather and cautious consumer behavior. “In addition to mixed weather, consumers’ reluctance to spend is affecting not just retail but also the hospitality industry and breweries. Even during the Euro Cup, fluctuating temperatures and frequent storms hurt many businesses, causing some garden parties to be washed out. However, some breweries still benefited from this major sporting event,” Eichele said regarding the current figures.
Rising costs and non-alcoholic beer’s growing popularity
The nearly 1,500 breweries in Germany continue to face challenges in 2024 due to the difficult consumer climate and the tense global political situation. Eichele remains pessimistic about a quick market recovery, citing the high production costs that breweries struggle to pass on to retailers through price increases. Recently, the president of the Bavarian Brewers’ Association called for higher beer prices.
Over 80% of the beer sold in Germany is for domestic consumption. Domestic sales fell nearly 1% from the previous year to 3.4 billion liters. The remaining 18.3% was exported or distributed tax-free as ‘house beer’ for brewery employees, a 0.6% increase from the previous year. Of this, 428.1 million liters were exported to EU countries, 332.3 million liters to non-EU countries, and 5.1 million liters were accounted for as house beer. Bavaria remains the leader in beer sales across Germany.
According to the German Brewers’ Association, Pilsner remains the most popular beer in Germany, with a market share of around 50%, followed by light beers (10%) and non-alcoholic beers. The latter has recently overtaken wheat beer, which holds an 8% market share.
Non-alcoholic beer sees substantial growth
The demand for non-alcoholic beer has surged in recent years, as reflected in production numbers. In 2023, Germany produced over 556 million liters of non-alcoholic beer, valued at around €548 million. According to the Federal Statistical Office, production has more than doubled over the last decade, with a 109% increase from 267 million liters in 2013.
“The brewing industry’s innovation is best demonstrated by the boom in non-alcoholic beers,” said Eichele. Germany produces over 800 non-alcoholic beer brands, and soon, one in ten beers brewed in Germany will be alcohol-free. “With a total annual production of around 9 billion liters, Germany leads Europe in beer brewing and is also at the forefront of non-alcoholic beers. No other segment of the brewing industry has grown as rapidly in the last ten years as non-alcoholic beers and beer mixes.” In the first half of 2024, non-alcoholic beers saw double-digit growth in sales and revenue across the country.
Despite the rising popularity of non-alcoholic beer, the majority of beer produced in Germany is still alcoholic. Last year, breweries produced around 7.2 billion liters of alcoholic beer, worth approximately €6.4 billion. However, the production of alcoholic beer has declined by 14% over the past decade, from nearly 8.4 billion liters in 2013.
Long-term decline and brewery bankruptcies
Beer sales in Germany have been steadily declining for three decades, hitting a new low last year. In 2023, beer sales dropped by 4.5% compared to the previous year, totaling 8.4 billion liters. The long-term trend is even more concerning, with a decline of 11.5% over the last ten years and more than 25% over the past two decades. Exports have also weakened significantly, exacerbating the crisis for German breweries.
The number of brewery bankruptcies has increased in recent months. A brewery in Viechtach, which had been operating for 450 years, recently filed for bankruptcy. The oldest brewery in Saarland is also on the brink of closure, marking the potential end of a family-run business with a history spanning centuries.
