Craft Beer Culture
Sitting in Braukollektiv in Freiburg tasting their craft beers, I wondered how common microbreweries are in Germany. A country famed for its beers must have lots of small operations, right? In the US, microbreweries seem to be popping up all the time, especially in trendy cities like Los Angeles and New York. However, the scene in Germany is in fact smaller. The US has more microbreweries than Germany, and maintains a sizable niche of consumers across the country. Historical changes in the market and industry at large show differences in the prevalence of craft breweries.
During the late 19th and early 20th century, the beer industry experienced widespread consolidation of firms. Mergers and acquisitions occurred across the world, which not only created a market dominated by multinational corporations with strong market power, but also meant the industry homogenized as many beers were standardized for efficiency and to cater to a wide consumer base. As larger firms came to control the industry, this created more barriers to entry for microbrewers, as they had to compete with macrobrewer marketing budgets. Additionally, top-fermented beers were cheaper to produce, so this became the norm of large firm production, versus bottom-fermented beers with high fixed costs common among microbrewers. These factors meant the loss of many microbreweries, also referred to as craft breweries. Furthermore, technological advancement made brewing and packaging far more efficient, along with distribution. The advantages to large firms abounded.
In Germany, the primary law that governs beer production is the Reinheitsgebot, written in 1516. Among other provisions, the law limits beer ingredients to water, hops, and barley (and later yeast and a few other exceptions). This impacts craft brewers’ ability to innovate the flavor profile of their beers, making entry into the market more challenging. However, a movement began popping up in different cities around the world, with microbreweries gaining traction again. In the US, the returned interest in craft brewing is said to have begun in San Francisco in 1965. Between 1985 and 2015, the number of microbreweries rose from 37 to 3,490 in the US. Germany experienced a much smaller increase in microbreweries in this period, however, and by 2015 it still had not recovered its number of breweries per million inhabitants to 1980s levels, unlike the US which had far surpassed it. Interest is still growing in Germany in the craft beer industry. One factor to account for is that many craft beers you would see somewhere like the US have a higher ABV content than what is typical of a German beer. Thus, craft brewers have to find ways to cater to consumers. For instance, Braukollektiv has developed some brews that are lighter and lower ABV, and these have become popular in Freiburg.
Several changes in consumer demand led to the rise in craft brewing. As consumer incomes increased, more people could afford craft beer, and with this trend was a preference for more variety. The interest in supporting localized consumption from the lens of sustainability also influenced people to become interested in craft brewing. As interest grew, people formed groups about craft brewing that aids in sustaining demand for the product. Thus, a culture developed around it making it more economically viable. In some countries, it is still difficult to start a microbrewery because of the lack of access to the equipment to do so, but where it is very popular, equipment is more available and the barrier to entry is lower. In a similar way, it can be difficult to acquire capital from a bank to enter the market, but in countries like the US, where they are more familiar with the concept, it can be easy. Some places in Europe have even given government incentives to start an operation due to the positive impact on the agriculture industry that would provide brewers with inputs like hops. Overall, it appears that craft brewing is on the rise in Germany, which stands to add value to the economy.
Sources
Garavaglia, Christian, and Johan Swinnen. “The Craft Beer Revolution: An International Perspective.” Choices, vol. 32, no. 3, 2017, pp. 1–8. JSTOR, http://www.jstor.org/stable/90015005.
https://www.expatica.com/de/lifestyle/food-drink/german-beer-246370/
