BRAU Beviale 2008 opens its doors in the Exhibition Centre Nuremberg from 12-14 November. The industry's most important international capital goods exhibition this year invites the experts and a good 1,400 exhibitors of beverage raw materials, technologies, logistics and marketing ideas with highly communicative stand crews and some 34,000 potential customers are pleased to come. Those faced with investment decisions need competent advice - and apparently feel they are in excellent hands in Nürnberg. According to a survey by an independent institute, 97 % of the visitors (!) in 2007 were not only highly satisfied with the products on display at their BRAU Beviale, but also with the information and contact opportunities on the exhibition stands.
German beer is also popular internationally
Talking a lot makes you thirsty. The exhibiting companies have the right answer to this problem with perfect service on their stands. There are also plenty of things to try: the latest flavourings, essences, healthy additives for non-alcoholic drinks and naturally well-cooled beer from all over the world - at the BRAU Beviale Evening and the presentation of the European Beer Star Award, if not before. Prize-winning top international beers certainly have a chance with German beer lovers. Although beer imports to Germany dropped by almost 13 % in 2007, the Germans still enjoyed a Danish, Belgian, Czech, Dutch or British beer. German beer is still an export hit. Over 12 million hl (+1.4 %) were enjoyed in the EU countries, mainly in Italy, France, the Netherlands, Great Britain and Spain. 15.4 million hl (+3.7 %) of German beer were drunk outside EU, especially in the USA, Canada, Switzerland and Russia (Federal Statistics Office, D).
Demographic changes influence beverage markets
The actual moment passed completely unnoticed, but 2007 nevertheless described a turning point in the history of mankind: For the first time, more people live in the cities than in the country. And this trend is continuing - in Europe as well. Of a total population of 729 million - if, like the United Nations, we include Russia and the Ukraine as part of Europe - approx. 520 million Europeans now live in cities (UN Habitat). This figure is to rise to 572 million by 2025 and the share of the total population from 72 to 82 %. Moscow leads the ranking of Europe's largest cities, followed by London, St. Petersburg, Berlin, Madrid, Rome, Kiev, Paris, Bucharest and Budapest. Five of the ten largest cities in Europe were formerly behind the Iron Curtain. This is explained by the doctrine of socialism, which regarded urbanization as one of the pillars of progress. For example, Russia has 116 cities with more than 150,000 inhabitants, Poland 22, Romania 18 and Bulgaria 6, but Germany and France have only 51 and 16 respectively, which are relatively few in terms of their population figure. As a result of their late national unification - one remembers the German system of mini-states, many more people live in small towns with less than 50,000 inhabitants in Germany and Italy than in the neighbouring countries. In terms of the total population, city-dwellers are a minority in Italy (21 %) and Germany (26 %).
The European cities have long expanded into metropolitan regions whose actual population far exceeds those of the urban administration units. The United Nations forecasts that there will be five metropolitan regions in Europe by 2015, each with more than 5 million inhabitants. Paris leads this time (9.6 million), ahead of Moscow (9.2 million), London (7.6 million), Essen (6.5 million) and St. Petersburg (5.1 million). Experts rate these official estimates by the respective city authorities as rather conservative.
For the strategy departments of the brewing and beverage concerns, migration in the national and transnational context, urbanization and individualization are phenomena they consider in their investment decisions. City air apparently makes people thirsty, especially in Central Eastern Europe, whose markets excelled again in 2007 with high single-figure growth rates for beer consumption, whereas beer consumption in Western Europe stagnated or declined.
Incomes are higher and the variety of food greater in the urban centres of Central Eastern Europe. The brewing concerns get much closer to their profit targets here than in sparsely populated, poorer rural areas, as large numbers of consumers prepared to spend more money on international beer brands than on local beer are only found in the metropolises. Cities are therefore the ideal platform for premium brands, but also for packaging innovations like PET, which seems to be capturing the European beer market from the East in various sizes (0.5 to 5.0 l) (Heineken, Business Report 2007).
European beer etiquette: Generous Romanians and Russians
Beer can become a social interaction drink in cities. The so-called "beer etiquette" still has its origin in urban trends. This is shown by a survey by SABMiller ("Beer etiquette - How Europeans enjoy a beer") among 7,500 consumers in 15 European countries. The survey researched the following drinking situations: in a group, on the first date, at a business meeting, in a restaurant, and at a wedding. The survey clearly showed that Romanians are the most generous consumers. They still pay for a round of beer when there are more than 10 people in the group and they cannot assume that everyone will return the favour. The Russians are also generous in this respect, whereas the Dutch would prefer to split the bill.
Also interesting is the behaviour concerning the question of who pays when a couple goes out. Women who like to be invited by their male escort should go out in Russia, Poland, the Czech Republic or the Slovak Republic, where chivalry is still very marked. Surprisingly not in France, where only 78 % of men feel obliged to pay the bill in a restaurant.
There are also profound differences within Europe on when beer is acceptable as a drink. At a business meeting? Only in Russia, Belgium, France, Denmark, Spain and Sweden do more than one third of the interviewees think beer is acceptable. At a wedding? This is a good occasion for opening a bottle for most Europeans. The Italians, Russians, French and Slovaks disagreed, but agreement prevailed on the question of beer in the restaurant? More than half of all interviewees thought this was acceptable, regardless of which country they came from. The "most conservative" consumers seem to be the Slovaks. Beer is drunk at pleasant get-togethers, but not on the first date, at a wedding or at a business meeting.
The history of Northern and Southern Europe repeated further east
Rural exodus and urbanization have had a direct influence on developments in beverage consumption in Finland or Spain. 40 years ago, the Finns' thirst for beer was one of the lowest in Europe. Today they consume an average of 86 l a year, which puts them in the upper mid field of European rankings. The reason? The Finns have learned how to go out. Apparently they previously tended to be stay-at-homes, but today they belong to the European party crowd. This is supported by the number of bars and restaurants in the cities and the increased beer consumption. The Spaniards drank mainly wine 40 years ago and then only with meals. Meanwhile, the beer consumption of 87 l has long overtaken wine consumption, because although beer is mainly drunk in bars and restaurants, it is also increasingly competing with wine for meals at home. As a result, only 62 % of beer in Spain is still sold in bars and restaurants, the remaining 38 % via the retail trade for consumption at home (Canadean, British market research institute).
In the countries of Central Eastern Europe, an average of more than half the Gross National Product (GNP) is produced in cities. The capital city regions achieve a standard of living distinctly above the national average, especially in Prague, Bratislava, Közép-Magyarország (Budapest) and Mazowieckie (Warsaw). Apart from these capital city regions, the income per inhabitant is only above the EU average (Eurostat) in the rest of the Czech Republic, Slovenia and parts of Hungary. The catching-up process in the new member states accelerated from 2000 to 2004. Development was especially dynamic in Hungary, the Czech Republic, the Slovak Republic, the Baltic States and Romania. The reason for this may also be the increased volume of remittances sent home by workers abroad, which grew appreciably between 2001 and 2004 according to estimates by the European Commission. Alone the Polish migrants in the EU transferred an estimated sum of more than 6 billion EUR to their families at home in 2004. The remittances are also a key factor for the Romanian economy, as they contribute to economic growth. For example, direct foreign investments in 2006 were over 5 billion EUR and private remittances 2.5 billion EUR. Remittances are even more important in neighbouring Bulgaria. According to studies by the Bulgarian National Bank, Bulgarians working abroad transferred over 2 billion EUR home in 2007 - almost 8 % of GNP.
The future of the cities
If the rural exodus in Central Eastern Europe continues unchanged despite the many regional support plans, probably only 128 million people will still live in areas with rural structures in 2025, compared with 192 million in 1995. The most dramatic development will be in Russia.
Despite rising property prices in all metropolises in Central Eastern Europe, the run on them seems to be unbroken. This is shown by factors such as the number of households, which is increasing everywhere. For 2025, the United Nations forecasts more than 6 million households (2005: 5 million) in the Czech Republic, 4.7 million (2005: 4.2 million) in Hungary, 16.6 million (2005: 14.4 million) in Poland and 9.1 million (2005: 8.2 million) in Romania. The size of households is decreasing at the same time. The reasons are the individualization in the cities and the increased average age. In 2025, for example, every fifth Bulgarian will be over 65 years old, and the average Slovene 47.4 years (World Bank Report "From Red to Grey"). This scenario puts a damper on excessively optimistic consumption growth rates. How much this will adversely affect the GNP depends on many factors like working life, productivity of labour or whether the countries concerned open up to migrants from areas of the former Soviet Union farther east.
The consumer goods industry has long been able to study the impact of an ageing and shrinking population, such as in Italy, where it has been shown that private consumption drops with increasing age. Older consumers are, however, prepared to spend more. If this model is transferred to the markets of Central Eastern Europe, the brewing and beverage industry in the urban centres there can expect sparkling profits for a long time to come.
German beer is also popular internationally
Talking a lot makes you thirsty. The exhibiting companies have the right answer to this problem with perfect service on their stands. There are also plenty of things to try: the latest flavourings, essences, healthy additives for non-alcoholic drinks and naturally well-cooled beer from all over the world - at the BRAU Beviale Evening and the presentation of the European Beer Star Award, if not before. Prize-winning top international beers certainly have a chance with German beer lovers. Although beer imports to Germany dropped by almost 13 % in 2007, the Germans still enjoyed a Danish, Belgian, Czech, Dutch or British beer. German beer is still an export hit. Over 12 million hl (+1.4 %) were enjoyed in the EU countries, mainly in Italy, France, the Netherlands, Great Britain and Spain. 15.4 million hl (+3.7 %) of German beer were drunk outside EU, especially in the USA, Canada, Switzerland and Russia (Federal Statistics Office, D).
Demographic changes influence beverage markets
The actual moment passed completely unnoticed, but 2007 nevertheless described a turning point in the history of mankind: For the first time, more people live in the cities than in the country. And this trend is continuing - in Europe as well. Of a total population of 729 million - if, like the United Nations, we include Russia and the Ukraine as part of Europe - approx. 520 million Europeans now live in cities (UN Habitat). This figure is to rise to 572 million by 2025 and the share of the total population from 72 to 82 %. Moscow leads the ranking of Europe's largest cities, followed by London, St. Petersburg, Berlin, Madrid, Rome, Kiev, Paris, Bucharest and Budapest. Five of the ten largest cities in Europe were formerly behind the Iron Curtain. This is explained by the doctrine of socialism, which regarded urbanization as one of the pillars of progress. For example, Russia has 116 cities with more than 150,000 inhabitants, Poland 22, Romania 18 and Bulgaria 6, but Germany and France have only 51 and 16 respectively, which are relatively few in terms of their population figure. As a result of their late national unification - one remembers the German system of mini-states, many more people live in small towns with less than 50,000 inhabitants in Germany and Italy than in the neighbouring countries. In terms of the total population, city-dwellers are a minority in Italy (21 %) and Germany (26 %).
The European cities have long expanded into metropolitan regions whose actual population far exceeds those of the urban administration units. The United Nations forecasts that there will be five metropolitan regions in Europe by 2015, each with more than 5 million inhabitants. Paris leads this time (9.6 million), ahead of Moscow (9.2 million), London (7.6 million), Essen (6.5 million) and St. Petersburg (5.1 million). Experts rate these official estimates by the respective city authorities as rather conservative.
For the strategy departments of the brewing and beverage concerns, migration in the national and transnational context, urbanization and individualization are phenomena they consider in their investment decisions. City air apparently makes people thirsty, especially in Central Eastern Europe, whose markets excelled again in 2007 with high single-figure growth rates for beer consumption, whereas beer consumption in Western Europe stagnated or declined.
Incomes are higher and the variety of food greater in the urban centres of Central Eastern Europe. The brewing concerns get much closer to their profit targets here than in sparsely populated, poorer rural areas, as large numbers of consumers prepared to spend more money on international beer brands than on local beer are only found in the metropolises. Cities are therefore the ideal platform for premium brands, but also for packaging innovations like PET, which seems to be capturing the European beer market from the East in various sizes (0.5 to 5.0 l) (Heineken, Business Report 2007).
European beer etiquette: Generous Romanians and Russians
Beer can become a social interaction drink in cities. The so-called "beer etiquette" still has its origin in urban trends. This is shown by a survey by SABMiller ("Beer etiquette - How Europeans enjoy a beer") among 7,500 consumers in 15 European countries. The survey researched the following drinking situations: in a group, on the first date, at a business meeting, in a restaurant, and at a wedding. The survey clearly showed that Romanians are the most generous consumers. They still pay for a round of beer when there are more than 10 people in the group and they cannot assume that everyone will return the favour. The Russians are also generous in this respect, whereas the Dutch would prefer to split the bill.
Also interesting is the behaviour concerning the question of who pays when a couple goes out. Women who like to be invited by their male escort should go out in Russia, Poland, the Czech Republic or the Slovak Republic, where chivalry is still very marked. Surprisingly not in France, where only 78 % of men feel obliged to pay the bill in a restaurant.
There are also profound differences within Europe on when beer is acceptable as a drink. At a business meeting? Only in Russia, Belgium, France, Denmark, Spain and Sweden do more than one third of the interviewees think beer is acceptable. At a wedding? This is a good occasion for opening a bottle for most Europeans. The Italians, Russians, French and Slovaks disagreed, but agreement prevailed on the question of beer in the restaurant? More than half of all interviewees thought this was acceptable, regardless of which country they came from. The "most conservative" consumers seem to be the Slovaks. Beer is drunk at pleasant get-togethers, but not on the first date, at a wedding or at a business meeting.
The history of Northern and Southern Europe repeated further east
Rural exodus and urbanization have had a direct influence on developments in beverage consumption in Finland or Spain. 40 years ago, the Finns' thirst for beer was one of the lowest in Europe. Today they consume an average of 86 l a year, which puts them in the upper mid field of European rankings. The reason? The Finns have learned how to go out. Apparently they previously tended to be stay-at-homes, but today they belong to the European party crowd. This is supported by the number of bars and restaurants in the cities and the increased beer consumption. The Spaniards drank mainly wine 40 years ago and then only with meals. Meanwhile, the beer consumption of 87 l has long overtaken wine consumption, because although beer is mainly drunk in bars and restaurants, it is also increasingly competing with wine for meals at home. As a result, only 62 % of beer in Spain is still sold in bars and restaurants, the remaining 38 % via the retail trade for consumption at home (Canadean, British market research institute).
In the countries of Central Eastern Europe, an average of more than half the Gross National Product (GNP) is produced in cities. The capital city regions achieve a standard of living distinctly above the national average, especially in Prague, Bratislava, Közép-Magyarország (Budapest) and Mazowieckie (Warsaw). Apart from these capital city regions, the income per inhabitant is only above the EU average (Eurostat) in the rest of the Czech Republic, Slovenia and parts of Hungary. The catching-up process in the new member states accelerated from 2000 to 2004. Development was especially dynamic in Hungary, the Czech Republic, the Slovak Republic, the Baltic States and Romania. The reason for this may also be the increased volume of remittances sent home by workers abroad, which grew appreciably between 2001 and 2004 according to estimates by the European Commission. Alone the Polish migrants in the EU transferred an estimated sum of more than 6 billion EUR to their families at home in 2004. The remittances are also a key factor for the Romanian economy, as they contribute to economic growth. For example, direct foreign investments in 2006 were over 5 billion EUR and private remittances 2.5 billion EUR. Remittances are even more important in neighbouring Bulgaria. According to studies by the Bulgarian National Bank, Bulgarians working abroad transferred over 2 billion EUR home in 2007 - almost 8 % of GNP.
The future of the cities
If the rural exodus in Central Eastern Europe continues unchanged despite the many regional support plans, probably only 128 million people will still live in areas with rural structures in 2025, compared with 192 million in 1995. The most dramatic development will be in Russia.
Despite rising property prices in all metropolises in Central Eastern Europe, the run on them seems to be unbroken. This is shown by factors such as the number of households, which is increasing everywhere. For 2025, the United Nations forecasts more than 6 million households (2005: 5 million) in the Czech Republic, 4.7 million (2005: 4.2 million) in Hungary, 16.6 million (2005: 14.4 million) in Poland and 9.1 million (2005: 8.2 million) in Romania. The size of households is decreasing at the same time. The reasons are the individualization in the cities and the increased average age. In 2025, for example, every fifth Bulgarian will be over 65 years old, and the average Slovene 47.4 years (World Bank Report "From Red to Grey"). This scenario puts a damper on excessively optimistic consumption growth rates. How much this will adversely affect the GNP depends on many factors like working life, productivity of labour or whether the countries concerned open up to migrants from areas of the former Soviet Union farther east.
The consumer goods industry has long been able to study the impact of an ageing and shrinking population, such as in Italy, where it has been shown that private consumption drops with increasing age. Older consumers are, however, prepared to spend more. If this model is transferred to the markets of Central Eastern Europe, the brewing and beverage industry in the urban centres there can expect sparkling profits for a long time to come.
