Germany Sees Significant Decline in Breweries Since Pre-Pandemic Era

Germany's brewing industry has witnessed a notable decline in the number of breweries, with statistics revealing a drop of 93 establishments over the past five years, bringing the total to 1,459. This shift marks a reversal of a long-standing trend of growth that had been largely driven by the craft beer movement and a surge in new brewery startups.

The decline is not limited to emerging craft breweries; it is impacting traditional family-run establishments as well. According to the German Brewers' Association (DBB), the number of closures has been nearly equal between new founders and established family businesses. Furthermore, the rate of new brewery establishments has slowed significantly, attributed to a general lack of planning security faced by entrepreneurs in the current economic climate.

Among the states, Bavaria has experienced the largest absolute decrease, with a reduction of 50 breweries, although it still holds the title for the highest number of breweries at 598. Relative to its total, this represents an 8% decline, which surpasses the national average decrease of 6%. Other regions that have reported losses include North Rhine-Westphalia, with 24 fewer breweries, and Hesse, which saw a reduction of 14.

DBB President Christian Weber has highlighted several factors contributing to this downturn. The initial impact of the COVID-19 pandemic was compounded by the recent energy price crisis, which has caused significant capital outflows, particularly among smaller enterprises. The current trend of consumer restraint further exacerbates the situation, as breweries struggle to enforce necessary price increases against larger food corporations, creating a precarious financial environment. As a result, many establishments find themselves in a position where they may have to close after generations of operation.

As brewing operations face escalating costs associated with transitioning to climate-neutral practices by 2045, many breweries must prepare for significant investments. Weber noted that upgrading facilities to replace gas with electric systems could necessitate rebuilding up to 80% of existing equipment, with some essential technologies still in development. The uncertainties surrounding energy costs and their implications for operational sustainability pose critical challenges for the future of Germany's brewing landscape.

Energy expenditures represent a substantial portion of production costs, accounting for approximately 10-15% at large breweries and up to 20% or more for smaller and traditional operations. The brewing, cooling, and cleaning processes contribute significantly to these costs. In light of this, Weber has urged future governmental coalitions to prioritize affordable energy and planning stability, which he believes are essential to stimulate new brewery formations.

Despite the overall decline, some regions are experiencing growth. For instance, Saxony has seen an increase of seven breweries, bringing its total to 84, while Thuringia has added four to reach 47. These pockets of growth, while encouraging, are overshadowed by the overall trend of diminishing brewery numbers across the country.