Matthew Day in Warsaw -
Smiles in the world of Central Europe's brewing giants are few and far between at the moment as the sector contends with falling sales, but while the big boys weep into their beer, the small and regional breweries are grinning.
After years of living in the shadow of the powerful and suffocating presence of the multinational brewing corporations, the independent beer producers are producing today more and selling more.
In Poland, figures from Association of Regional Breweries, an umbrella group for independent producers, for 2010 put year-on-year growth between 5-10% even as the overall beer market dropped by around 0.5% last year. Marek Jakubiak, owner of two independent breweries, says he saw sales climb in 2010 by 30% from the year before, and that this year they should exceed that figure. By contrast, information from market research company Polish Market Review put sales for the SABMiller-owned Kompania Piwowarska, Poland's biggest beer produce, down by 3% in 2010.
Across the border in the Czech Republic, the big multinationals felt most of the pain, according to the Czech Beer and Malt Association, of a 7.9% year-on-year reduction in the beer market, while the smaller producers either weathered the storm or managed to exploit it. K Brewery, for example, which owns six mid-size breweries in the country, reported a 13% increase in sales in 2010.
Only in little Slovakia have small breweries had little success, with only four independents left after takeovers and the crushing competition from neighbouring Czech Republic.
Reasons to be cheerful
"I'm happy and confident about the future," says Andrzej Olkowski, chairman of the Association of Polish Regional Brewers, who a few years ago feared the worst for Poland's independent breweries, left economically shabby and vulnerable by years of neglect under communism.
One reason for the small breweries now having an edge over the big ones in Poland is the growing wealth of the Polish consumer. More money in their pocket allows them to fork out €0.50-1 more for a beer from an independent brewery rather than plump for the mass-produced product, and also makes them more particular about what they drink. "The growing incomes of Poles mean we can spend more on luxury, and a good beer from a small brewery is more expensive," says Olkowski. "Poles are also become more knowledgeable about beer. It's taken time, but people are now more interested in what they eat and drink, and want good, chemical free, products."
The growing popularity of independent beers has also resulted in supermarkets allocating them more shelf space in beer sections once dominated by the multinational-owned brands. This has provided small brewers with a vital and burgeoning source of sales, and Olkowski reports that supermarkets now "call everyday" to ask about new beers.
In the Czech Republic, still the heartland of European beer drinking, small producers offering upmarket products have also benefited from growing incomes, but at the same time profited from a shift in consumer demand. "People are travelling abroad and when they come back they demand different things, and this is changing tastes," says Jan Vesely, executive director of the Czech Beer and Malt Association. "In the Czech Republic, pubs, which represent about 50% of all beer sales, used to be tied to one brewery, but now people want more beers, more choice. There is a shift underway and this is providing opportunities for independent breweries as they can get their beers into the pubs."
Vesely also highlights another flourishing sector that's tapping into the growing demand for not-run-of-the-mill beer. "The restaurant breweries, which produce beer to be consumed on site, are growing like hell," he says. "In 1990, there was one, now there are over a 100."
Back in Poland, it's a similar story, with more people eager to drink a unique beer, happy in the knowledge it hasn't travelled far. An original number of three restaurant-breweries, or micro-breweries as they are also called, in 1990 has grown to 20, and a further 10 are slated to open this year. Andrzej Galasiewicz, owner of Minibrowary.pl, which operates a chain of micro-breweries across the country, believes that in 20 years there should be at least 200.
All this has helped vanquish forever, it appears, the worry that indigenous producers in Central Europe with their traditions would be wiped out by insatiable multinational brewers. "There were fears that the big international entities would come here, harvest the market and kill what's left. But they can't kill tradition and the beer market reflects this," says Vesely.
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