What’s the future of the German craft beer market, what brews are successful today, and why is it increasingly important to maintain a brand presence at international events? Dr Marc Rauschmann, one of the very first craft beer pioneers and managing director of BraufactuM, talks about the next steps for the creative beer sector.
Mr. Rauschmann, as the director of BraufactuM, you’re one of the most important pioneers of the German craft beer industry, and you’ve been successful in the market for about ten years now. How has the creative beer industry changed during this period?
The craft beer market has changed a lot in the last ten years. At the beginning, it was important to us at BraufactuM to introduce people to this kind of beer. Besides our own brews, we also offered a very extensive assortment of beers from our partner breweries, including several sour beers, many barrel-aged beers, spice beers, and generally rather extreme varieties. The industry itself got off to a very slow start, but gradually more and more brewers came out with craft beers.
And what’s the situation today?
Today it’s no longer primarily about offering the most extreme flavour experience, it’s about giving craft beer a place in the German beer landscape. This means that we also need beers that appeal to a broader swath of consumers. It’s about displaying creativity in “normal” beers, which is no less challenging. So now we see styles like pilsner, helles, and even a trend toward non-alcoholic beers in the craft beer sector. After a few years of continuously strong development in this segment, supply has far outpaced demand in some areas. This is true of both retail stores and brewers. Supply and demand are levelling out, and that’s a normal process. Retail shops and even restaurants are focusing more on high-quality, reliable brands.
More and more self-styled prophets are claiming that the zenith for creative beers in Germany has already passed, and that now opportunities can only be found in the mainstream. Is that right, and what should young craft brewers do to keep the dynamic growth trend going?
The zenith has certainly not passed, but the industry also has to realise that growth can’t be forced, and in particular that you need to bring the consumer along on this path. It’s about meeting beer consumers where they happen to be right now. For example, a classic pilsner drinker who has perhaps developed a taste for a Kellerbier might be ready to take the next small step. That was the idea behind our “Hoppy Kellerpils.” But is that mainstream? What is mainstream, anyway, and why does it always sound a little pejorative? Is a Boston Lager or a Sierra Nevada Pale Ale mainstream? Sure they are, but is that a bad thing, considering that both are great beers? Mainstream means that you can reach a broader target group. A beer doesn’t need to be nearly undrinkable and only taste good to a few consumers to be cool.
So what’s important now, exactly?
What’s most important right now is to win over more and more consumers with more accessible and understandable craft beers. That’s why it’s important that we do everything possible to move craft beer from a “fringe product” to a central position in society – both in retail shops and in restaurants. But the special nature of these beers also needs to be preserved. The market is at the very beginning of this journey and is now being noticed by consumers, retail shops, and restaurants. A young craft beer brewer in Germany today certainly has it hard, because the market isn’t big enough yet. I think the most important thing is to create relevance, which takes a good, honest story. Ideally, the vendor should be a brewer or master brewer who can create reliably high-quality beers that bear their personal signature. They should also have a clear distribution structure, a solid financial foundation, and good, honest partners from the very start.
BraufactuM operates several restaurant properties across Germany. Is having your own location a guarantee of success in this market?
Having your own location is certainly no guarantee of success, but it’s very important for brand-building and the consumer experience to introduce consumers to our beers or even more generally to craft beers. Here too, you need to go after all beer consumers. That’s why we offer tasting boards in our three BraufactuM restaurants in Dresden and Berlin: It’s a perfect introduction to the world of craft beers. It’s also important to not try to re-educate consumers at the counter. Someone who would like to enjoy their pilsner should get one, of course. Once they’re in the restaurant and see all the other products they can try out, they can do that if they want.
Regionality is the buzzword of the day in the beer industry, but you and BraufactuM are also very international in your orientation. How important are global sales strategies for a craft brewer? What opportunities do smaller brewers have, those who perhaps can’t or would rather not pursue global strategies?
In the current era of globalisation, regionality has emerged as a countervailing megatrend that’s impacting all food products and therefore also beer and craft beer. And yes, regionality or even more extreme, locality (meaning beer brewed in your own neighbourhood) is often associated or equated with craft beer. For us, craft beer is the combination of experimentation and innovation with German brewing craftsmanship. The regional approach is more like the traditional approach for many regional breweries. Naturally, it’s enriching to have many smaller regional breweries – but that doesn’t necessarily have anything to do with craft beer.
What is craft beer, then?
Even though defining craft beer isn’t easy, it’s undisputed that it has to do with going beyond regional borders and even national borders. It means sharing ideas, experimenting, and making beer alongside other brewers in Germany and throughout the world. The result is an enrichment of the traditional German beer landscape for everyone who enjoys new flavour experiences. Because markets develop differently but also inspire each other, it’s ideal in my view to pay attention to the triad of retail shops, restaurants, and exports. The export business in particular consumes a lot of time, but in my opinion it pays off in the long term. However, whether exporting makes sense also depends on the brand’s orientation. An international strategy makes no sense for brands that emphasise regionality and can’t even be distributed nationally in Germany. But here too, you need to bet on the two pillars of retail shops and restaurants, and possibly also open your own taproom.
You’re an active exhibitor at many beer events, including trade fairs like the KIBEX in Korea and the Beviale in Moscow, and you were an early supporter of the Craft Drinks Area of the BrauBeviale. How do you expect to benefit from such events?
We were represented at the KIBEX by our new importer in Korea, and Russia is our second-largest export market. We participated in various events and were active in the market in Moscow and St. Petersburg four times in 2018 alone. It’s important for BraufactuM to also fly our flag at events in export countries in order to create awareness of our brand. The Craft Drinks Area has become established as a highlight of the BrauBeviale. Besides drawing regular trade fair participants, the final round of the German Beer Sommelier Championship and the European Beer Stars Awards attract beer sommeliers, journalists, and other interested parties from the craft beer community. We see this event as a chance not so much to showcase our brand but also to generally promote the craft beer market, which we at BraufactuM naturally want to support.
Are trade fairs worthwhile for smaller brewers? How would they benefit from exhibiting at the BrauBeviale, for example, or a similar international event?
Like any other activity, trade fairs must have a positive cost-benefit effect for exhibitors. Finances and also the resource of time are always very tight for craft brewers, because they often have very few employees who do most of the work themselves. And so international events are always exciting, of course, but they only make sense if you actually sell your product in the given country, or you intend to. Participation in the right events can make a positive contribution to brand development and increased brand recognition, and conversely, you can also pick up inspiration and ideas for the home market.