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Germany key to Europe's flagging spirits volumes
Germany key to Europe's flagging spirits volumes

Germany key to Europe's flagging spirits volumes

MARKETING NEWS - Apr 30th, 08:12

Not only is Germany forming a last line of defence against the euro’s implosion, the land of steins and beer kellers also offers fertile ground to distillers foraging for sales in Western Europe’s withered landscape. 

Diageo’s CEO, Paul Walsh, refers to Germany as an emerging spirits market; and he’s only half-joking. The Smirnoff distiller’s relatively high exposure to dilapidated markets in Southern Europe, as well as Ireland, has seen it turn to Germany with increasing vigour since the onset of the economic downturn.

Early signs suggest the strategy is at least mitigating problems elsewhere. Germany helped Captain Morgan to ease past 10 million global case sales late last year, having risen to 400,000 cases in the country from next to nothing seven years earlier. Meanwhile, German volumes of The Singleton single malt Scotch doubled in Diageo’s last fiscal year.

International shift

Such optimism is not immediately apparent from the headline figures. Euromonitor says that Germany’s spirits market will continue its slow, steady decline up to the end of 2016, for example. However, German market leader Pernod Ricard pinpoints two reasons why Germany is attracting interest.

“Of course, there is a robust economic situation,” Pernod Ricard’s CEO for Europe, Laurent Lacassagne, told an analysts’ gathering last year. “There is also this ongoing shift from local products to international brands which gives this market a very bright future.”

Just how robust Germany’s economy is remains questionable, particularly as the eurozone debacle drags into 2013 and the Deutsche Bundesbank is warning of a “gloomier” outlook. Still, Lacassagne’s point is also that international brands remain so under-represented in Germany that their potential in the market is decoupled from the economy, to a certain extent.

Euromonitor analysts say that, while consumers are still loyal to large, native brands, such as Jägermeister, more drinkers are enticed by the “exoticism” of premium foreign brands. More specifically, it’s boom time for imported whiskies.

“Whisk(e)y consumption per capita is lower in Germany compared to other countries,” says Beam Global’s MD for Germany and Austria, Manfred Jus. “However, we currently see a huge consumer trend towards whiskies.” 

Read more about: whisky | spirits | liquor beverage | europe | germany

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