WHERE WILL THEY HAVE THEIR PUTSCHES?

German Beer Goes Flat: In the birthplace of modern beer, they're drinking less of the stuff every year — forcing brewers to expand or merge. Why isn't the world's best-known beer nation a global brew leader? (STEVE ZWICK, August 11, 2003, TIME Europe)

Christian Eisenbeiss has beer in his blood. So does Bernhard Sailer. Both are third-generation members of German brewing families, both love their work, and for now, both are brewing up heady profits. But if you had to choose which man represents the future of the troubled German beer industry, it would have to be the New York-born Eisenbeiss (his parents emigrated to the U.S.). He and his sister share a 48% stake in the company that sells more beer to Germans than anyone else--Holsten, on Germany's north coast. Eisenbeiss believes a modern brewer needs to be big--Holsten already serves up 1 billion liters a year--and international. Sailer and his brother, Dietrich, by contrast, own and operate the small but thriving Hofbrauhaus Traunstein in southern Germany, which brews 10 million liters of beer annually. For centuries, such local breweries have been the backbone of this most German of industries. But Sailer is not optimistic about the future of family-owned breweries. "Some don't have the money to continue, and others don't have a new generation willing to take over," he says.

Here comes the great German beer shakeout. At last count, the country had 1,279 breweries, or nearly 75% of all those in the E.U. But Sailer estimates, based on conversations with peers, that one-third of those in his home state, Bavaria, only manage to crank out beer because they subsidize production costs with income from their real-estate holdings. He's managed to survive by repositioning Traunstein as a trendy regional "premium" brew, and by partnering with several tiny brew-pubs.

For most German brewers, however, the rule seems to be get big or die. The problem begins with the fact that Germans, like most northern
Europeans, are getting older and drinking less beer. "The average has dropped from 140 liters per person in the early 1990s to 120 now," says Sailer.
"I figure it will hit 100 in the next 10 years." This takes its toll on the brewers.

Boy, my math isn't so good, but preliminary calculations suggest that this now leaves us with exactly zero things to like about Germany. Posted by Orrin Judd at August 8, 2003 9:03 AM