Change Is Brewing in Germany

When they aren’t receiving any of the tens of thousands of pilgrims who toil up their steep, cobbled road each year, the Benedictine monks of Andechs Monastery are doing what they have done each year since 1455: brewing beer.

Light beer. Dark beer. Richly sedimented wheat beer. Bottom-fermented, Munich-style pale beer. Potent mountain bock beer. And, for the Lenten fasting season, an extra-strong, dark “double bock,” with a daunting alcohol content of 7% by volume--compared to 4.5% for a Miller Lite.

Welcome to libation theology, Bavarian style.

“The stronger the beer, the better the monks can deal with the effects of fasting,” explains Juergen Schott, a layman and member of the monastery’s five-member management board. “Try a little experiment: Go without eating anything for a few hours, then drink a liter of Andechser Doppelbock Dunkel. You will not feel like eating anything, because you will not be hungry.”

Time was, in this part of the world, every monastery had its own brewery. So too did every country inn and a good share of the castles.

Things have changed with the advent of the autobahn, the long-haul trucker, pasteurization and the aluminum can. But even today, Germany remains by and large a nation of proud local brews.

For the moment, anyway, there is no German counterpart to Anheuser-Busch, with its whopping 45% of the American market.

Here, in a nearly $10-billion market, of which about $65 million worth is exported, small is still beautiful: The biggest nationwide brand is Warsteiner, and it has a 5% market share.

Instead of going mass market, Germans down the output of the more than 1,200 breweries dotting their landscape--about 40% of the world brewery total. Most are local and regional, some still working out of monasteries and castles.

But if small is beautiful, small also is proving unsustainable amid the economic and demographic realities of the 1990s.

A huge shakeout is abroad in the land of Lowenbrau, and when it’s over, according to the Munich-based consulting firm of Roland Berger & Partner, half of Germany’s small and regional breweries will have gone the way of the buggy whip and the Beta cassette.

In Bavaria alone last year, about 40 breweries were closed, merged or went bankrupt. (That still leaves about 700 in Germany’s most beer-soaked state.)

Elsewhere, there are other signs of a brewing crisis:

* Germany’s biggest family of breweries, Brau und Brunnen, has been closing individual operations for five years, and it just canceled its 1995 corporate dividend.

* The biggest brewery in Stuttgart, Dinkelacker Brauerei--which still brews its premium brand in traditional copper kettles--recently announced that it will merge with its suburban rival, Schwaben Braeu.

* On the same day, Munich’s historic Spaten brewery reported that its 1995 earnings had plunged to $275,000, from $1.07 million for 1994. Spaten, which traces its origins to 1397 and only last fall stopped making local deliveries by horse-drawn wagon, is considered the cradle of modern brewing, turning out what connoisseurs consider the best examples of Bavarian dark and amber beers: Dunkel Export and Ur-Maerzen.

Why can’t such good stuff earn money for the makers? Who is killing the great breweries of Europe?

The problem, it turns out, is the very thing that seems to make this country a mighty fortress of consumer sovereignty: too many labels, too much capacity, too much of a good thing.

With more than 5,000 labels available, a beer lover who wanted to taste each of them, one per day, would need 13 1/2 years to see this noble project through. (The exact number of labels cannot be determined because much drinking here is tied to the calendar, and some beers appear only in specific places for a couple of weeks, then vanish.)

This level of diversity makes Germany a heaven for the lover of fresh, locally brewed beer, the fancier of eccentric back-road brands and unconventional brewing artisanship.

But Roland Berger’s brewing-industry analyst, Andrew Hampp, says that if every German brewery worked at full capacity, the country would be awash in twice as much beer as its inhabitants are prepared to drink.

Young Germans, it turns out, aren’t quite as interested as their fathers were in the cult of beer. The sun-dappled biergarten with its spreading chestnut tree, the oompah band, the lace-trimmed blouse and the dirndl skirt--increasingly, even in Bavaria, the young are considering these pleasing ways of the past and are saying Nein, danke.

“It’s an image thing,” Hampp says. “You just don’t sit in the gasthaus after church and drink one beer after another anymore. Now you might go mountain-biking with your family.”

Even at Oktoberfest--the famous Munich beer blowout, where Germans cast off their normal reserve and dance on the tables--more people than ever are coming, but their beer consumption is falling.

“The old people are dying and the young people are very mobile,” says Matthias Baumgarten, former spokesman for the huge Gebrueder Maerz conglomerate, which went bust in March.

The vast majority of Maerz’s business was in beverages. Just three years ago, it was tied with the Binding Group as Germany’s biggest brewer.

“Young people drive, and they don’t want to lose their driver’s licenses,” Baumgarten says. “They want to drink hip drinks, so we have to invent a lot of mixtures, like beer mixed with Coke. There’s also a new beer made with whiskey malt--you drink it on the rocks.”

Baumgarten is rolling out these glum tidings in a Munich beer hall, over a huge masskrug--a quart-sized Bavarian tankard--not of lager, but of a radler, a health-conscious new mixture of beer and lemonade. A young woman at the next table is sipping white wine.

And when fickle young Germans do drink beer, analysts say, they are turning their backs on the lagers, dunkels and altbiers that their fathers lived by and embracing the pilsener. These beers are golden, dry and bitter by American standards--though a purist would argue they are sweetening up--and the best ones are, indisputably, made in the north.

Today, the biggest-selling brands in Germany are pilseners; they account for about two-thirds of consumption nationwide. That’s good for business in northern cities like Hamburg, but aficionados worry that in their rush for the “pils,” young drinkers are abandoning the quirky regional treasures that help make Germany Germany:

There are the copper-colored, top-fermented “old beers” of Dusseldorf, in the west. There is the “smoked beer” of Bamberg, in the south. There is koelsch--a fruity appellation controllee produced only in Cologne.

There are the beers made with organically grown barley and hops, sold in health-food stores. There is a low-carbohydrate brand for diabetics. There is “seafarer’s malt,” a non-fermented extract served in pewter chalices. There is “stone beer.” There is “steam beer.” There is “rye beer.” There is “secret beer.” There is “ice bock.”

There is Kulminator 28, a pretender to the throne of “strongest beer in the world”: Some samples have measured a Breathalyzer-busting 13.7% alcohol by volume.

At the opposite end of the spectrum, there is the gentle Berliner Weisse, a low-alcohol, malted-wheat brew that is served in the summer in huge, bowl-shaped glasses, mixed with a syrup made from the woodruff plant that turns it the color of Herbal Essence shampoo.

It’s difficult to say what’s driving the German consumer away from these temptations and into the arms of the pilsener: simple good taste or the powerful, expensive, nationwide advertising campaigns of the big northern breweries.

“The successful breweries push pils,” Hampp says. “Pils is seen as more sophisticated. The higher-priced beer was always pils. Here in Bavaria, the everyday beer that everybody brewed was always lager.”

And who wants to be downscale? When the big, market-conscious northern breweries realized that they could market their core product as the nation’s premium, they put all their efforts behind a single house pilsener.

“The successful breweries are the ones that take a good product, stick to a consistent message, get a good distribution system and know how to promote themselves,” Hampp says.

But this strategy, Baumgarten complains, is leaving the smaller, regional breweries with the unprofitable job of supplying Germans with all the other side tastes they occasionally crave.

“They want a special beer for Easter. A special beer for October. A special beer for Christmas,” he says. “You can only make these regionally.”

And the regional breweries have neither the economies of scale nor the advertising budgets to cover the cost.

Not surprisingly, the brewing sector most affected by the shakeout has been the one in the middle: Breweries producing 1 million to 5 million liters a year. Trendy new microbreweries and brew pubs are appearing here, as in the United States, and the nation’s biggest brewers--those making more than 100 million liters a year--are going strong.

“We have polarization between the nationwide premium brands and the cheap beer at the bottom,” says Baumgarten, whose bankrupt former employer is selling its regional breweries to cover its debts. The buyers are merging them with other middle-sized breweries and laying off staff, hoping to “rationalize” production and achieve economies of scale.

“Consumer preference is going in these two directions, and it’s destroying the German market,” Baumgarten says. “We have a lot of beer being brewed in the middle, called konsumbier. This konsumbier is getting smashed.”

Up goes the masskrug of lemonade-beer for a swig, long and doleful.

For Germany’s legions of regional breweries to avoid such a fate, says business consultant Hampp, they will have to find ways to distinguish themselves in the choked and confusing marketplace.

How? “By using traditional marketing tools,” he suggests. “Allowing a target group to identify with a specific lifestyle.”

That’s the way they do it at the Andechs Monastery, where the brothers are shrewd about marketing not just their beer but their past. The Benedictines are a contemplative order; they are, however, not at all ascetic, and, conveniently for business purposes, they are supposed to practice gracious hospitality.

“We have a really clear profile of our products,” manager Schott says. “Our best marketing is in our history. About 1.5 million people come here per year, and 800,000 of these go to our braeustuebl,” or pub.

“And,” he adds, “they drink our beer. Most of them are enthusiastic about the taste--and the aura. When they go back from their outing, they want to keep on buying our beer.”

To promote this trend, the brothers offer Gregorian-chant barn concerts, in season, and they provide the Catholic pilgrims who come for the relics sleeping space on the floor.

Their promotional strategy seems to work: Even on a cold, rainy spring day, their braeustuebl is rumbling with happy voices; a gift shop at the cloister gate does land-office business in religious medals, rosaries and beer steins. Brochures ask merrymakers “to maintain the typically Andechs atmosphere [of] tranquillity and serene contemplation” by checking their mugs at the sanctuary door.

“We make a big profit,” Schott says, beaming.

So big that the monastery is in licensing negotiations with a brewery in Canada.

If the deal goes through, he says, a third of the North American profit will help maintain an impoverished Benedictine monastery in Oregon.

But for the many breweries with no such clearly defined image, the outlook is as cloudy as a mug of old-fashioned, top-fermented, unfiltered wheat beer.

Some breweries have been reduced to dumping their excess capacity through big supermarket chains, which sell it in cans under their cut-rate, house-brand labels. This is a risky practice, indeed: If Johannes Six-Pack finds out that his beloved brew can be had at the supermarket for half-price, in a generic can, then the brand name will be destroyed.

“We call it cannibalism,” Baumgarten says. “But every brewery does it. They have to make money.”

Despite the dismal outlook, plenty of budding braumeisters are enrolling at Germany’s Faculty of Brewing, outside Munich. Set in yet another monastery--this one dating to 1040, it is part of the Munich Technical University. It is one of the few brewing institutions in the world that grants both master’s degrees and professional certificates.

“I planned to go into aviation and space, but I quit that because there were too many people,” says Peter Koestler, 29, a student, sitting in the chemistry lab after an experiment on bacteria’s effects on fresh beer.

“I decided to go into brewing because the job prospects are better. The field is so wide, and the knowledge is very specialized. This school is recognized worldwide. And besides, I can’t deny that I like the product.”

But not for Koestler is the risky life of the traditional, regional brewer in today’s Germany.

“Everybody graduating from this school dreams of having their own brewery,” he says. “But that takes a lot of money. You need a really good financial background, and you need to advertise a lot, which brewers didn’t have to do before.

“I have a wife. I have a kid. I need a paycheck. It’s such an immense risk, I would never take it on.”

Instead, Koestler has his sights set on the land of Prohibition and Mothers Against Drunk Driving--and the home of mass production.

When he graduates, he says, he will apply for a job in Atlanta, with Coca-Cola.