German wheat beer sales under pressure

Germany | If Hell beers and other specialties increase sales in an overall shrinking market, something has to give. In this case, wheat beers. Long ranked second most popular beer style behind pils, wheat beer has seen its position snatched away by Helles in 2019.  

In 2018, pils remained Germans‘ most sought after beer style, with a market share slightly over 50 percent. Wheat beer and Export (a German style) came in second with 7 percent market share each, followed by Hell or Helles (6 percent). All this changed in 2019. Thanks to its increasing popularity, Helles continued its sales hike and seriously dented wheat beer sales.

Nearly all major wheat beer brands saw volume sales decline in the ten months of 2019 (end of October). As reported Lebensmittelzeitung, a German trade publication, Paulaner wheat beer lost 8.5 percent, Schneider and Maisel around 5 percent each. But Erdinger, Germany’s 11th most popular beer brand, had to relinquish a whopping 9 percent in sales. That is a lot of volume considering Erdinger’s domestic sales were 1.8 million hl beer in 2018.

Franziskaner hot on heels of Erdinger

Erdinger’s owner, Werner Brombach, must have been miffed. Not least since his major rival, Munich’s Franziskaner wheat beer brand (owned by AB-InBev), which was ranked 12th in 2018, managed to maintain sales volumes.

However, this came at a price: lots of discounting. In the week before Christmas 2019, you could easily find a 10-litre crate (20 x 0.5 litre bottles) of Franziskaner for EUR 11.99 (USD 13.40). Whereas Erdinger in 2019 hiked prices to EUR 17.99 (USD 19.98) per crate and did promotions too, the price per crate never dropped below EUR 13.99.

Explaining their sagging sales, wheat beer brewers resorted to the usual hogwash: that comparisons with 2018 (the year which had a long summer and the soccer world cup) were unfair, or that wheat beer consumption is more dependent on the weather being right than other beer styles. Ah well.

Helles gains share from wheat beer

What they cannot ignore is that Helles has eaten into their sales, and that Germany’s beer price environment is unfavourable to their own pricing. In the past, wheat beer prices enjoyed a significant premium over pils brands. As national pils brewers sell a significant amount of their volumes at a discount (on average 70 percent of annual sales), the de facto retail price for a crate of pils is below EUR 11 (USD 12.30) – and at the same level it was in 2009. This has made it nearly impossible for wheat beer brewers to raise prices without losing sales.

In September 2019, brewers Erdinger, Maisel and Schneider launched a seal, called “Bavarian Noble Maturation“. It was widely seen as an attempt to stand out within a shrinking beer market segment.