Getting the goat of large Czech brewers

By bne IntelliNews November 25, 2013

Nicholas Watson in Prague -

There's an old saying in the Czech Republic that if a Czech's goat dies, he won't pray for another but rather that his neighbour's goat will die too. And so it was in the 1990s when even though many Czechs were weary of the limited choice from the large brewers that had dominated under communism, they spitefully boycotted an upstart called Stanislav Bernard and his new "honest, traditional unpasteurized beer."

But today Bernard is having the last laugh. He eventually won over the recalcitrant locals to create one of the country's largest independent breweries, and in doing so helped foster an industry that has boomed to the point where Czech craft beer makers are now looking to export their products around the world.

In November, Two Tales, a microbrewery based outside Brno, began bottling what it hopes will fill an obvious gap in markets around the world for Czech craft beers. "No matter where you go in the world, you can say that Czech beer has a great image... but there has been a lack of opportunity for people to buy it - we're the first [Czech microbrewer] to get out there," says Jan Martasek, who founded the company with Se Padilla, owner of the Prague Beer Museum, a pub which claims to have 30 craft beers on tap.

The two set out to create the best craft beers that money could buy. They hired one of the country's top brewmasters, Jan Suran, who is also head of the Czech-Moravian Union of Minibreweries, to develop the recipes, while Young & Rubicon were taken on to develop the branding and marketing.

The result is a light, 8-degree (the degree signifies the length of time the beer is brewed, which in turn determines the alcohol level) Pilsner lager designed to appeal in the hotter climates of Southeast Asia, a region which Padilla says is only just at the beginning of its love affair with craft beer; a grapefruit-infused beer based on the 8-degree Pilsner that isn't sweet like a radler; and the flagship India Pale Ale - or Bohemia Pale Ale as it's marketed as. The first two use the renowned Czech Saaz hops; the IPA uses American hops, part of a new trend in Czech brewing to experiment with non-local ingredients.

Turning east

This turn by Czech microbrewers towards outside their maturing home market comes as no surprise to Tomas Plachy, CEO of Safichem Group, whose companies include Pacovske Strojirny, a maker since 1876 of stainless steel and copper products used in the food and chemical industries, including tanks and equipment for breweries.

That part of Pacovske's business saw a tail-off in the post-war period as the communists centralised beer production and the smaller breweries were either consolidated or went bust. But Plachy says it has enjoyed a dramatic revival alongside the rise of the Czech craft beer market; over the last five years, Pacovske's revenue from this part of the business has risen at a rate of over 15% a year. "The Czech craft beer market is becoming more mature, so we too are offering our products, knowledge and know-how into the less mature markets like Japan, Russia, Belarus, Slovakia and Poland," says Plachy. "We see the most potential in the east, in places like Russia and Kazakhstan."

Pacovske, which specialises in offering bespoke solutions to microbreweries (those which produce up to 250 hectolitres a year) and mini-breweries (which produce up to 10,000 hl a year), has about a 25% market share of the roughly 190 microbreweries that exist now in the Czech Republic, including fitting out the Hendrych family brewery at Vrchlabi and the Brewery House Praha. By contrast, next-door Poland, a country with more than three-times the population, has less than 30 microbreweries.

David Binar, former journalist and beer lover, posits there are even more in the Czech Republic if you include those set up by "beer circles" like his - a group of 12 friends that spent about €2,000 on a 50-litre Braumeister from Germany, which they then set up in the basement of a Prague publishing house to produce about 100 litres a year for their friends and family to drink.

That such groups exist is testament to how deep the brewing culture runs through Czech society: it is possible to take brewing courses not only at university, but also at the country's "gymnazium" high schools, which prepare students for a university education. Binar says five of his group have gone back to school to take beer courses.

Given all this, it is hardly a surprise that the microbrewery industry has taken off in the Czech Republic. Without communism, Czechs believe their brewing industry would probably have more closely matched that of neighbouring Germany, where it's common for each town and village to have its own brewery, rather than the centralised situation that it ended up with in the 1990s.

For many Czech beer drinkers, the last straw came when the large multinational brewers like SABMiller and Heineken moved in. The subsequent consolidation, cost-cutting and efficiency drives has had the effect, so aficionados claim, of squeezing out much of the character of the beers produced. "The big Czech beers have turned into 'euro beers' - the passion has been all leached out and regional beers like Radegast, by being taken over by large corporations, have lost their distinctive taste and character," says Martasek.

Also driving the market was that the price differential between the standard beers and the more expensive craft beers began to narrow at the same time as Czech incomes began to rise.

With the sale of craft beers rising at the expense of the mainstream beers - the Czech Association of Breweries and Malt Houses says total output of Czech breweries in the Czech Republic fell by almost 3% in the first nine months of the year - the big brewers are fighting back. A new development is the big players sending unpasteurised beer straight from the breweries in temperature-controlled trucks to the pubs and restaurants as a way to give beer drinkers a more "authentic" taste.

However, with such a large domestic market - the Czechs are the largest consumers of beer per capita in the world - and now an international market with a growing appetite for Czech beers, industry players say there's probably plenty of room for all. "Chefs have already grabbed on to the opportunities, and are pairing dishes with beers just as they have done with wines - it's really a very exciting time to be making craft beer," says Padilla.

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