Home' Brewers Guardian Digital Magazine : November 2014 Contents “What we are currently doing and asked to do
even more of, to build the international volumes of
Krombacher, certainly counterbalances the decline
of beer in Germany,” he says. “However, there are
other strategies at Krombacher Germany in place to
make sure that the market position remains as it is.”
Krombacher’s flagship Pils is described as
Germany’s best-selling premium Pilsner, with its
annual volumes around 4.3-4.4mhl accounting for
10% of the segment – and in very slight decline.
The domestic strategy is to broaden the portfolio,
with the Weizen, Dunkel and a recently introduced
Kellerbier showing promise. There is also a
move into new flavours, with its non-alcoholic
Fassbrause, a mix of malt extract and fruits
flavours, surprisingly well-balanced, not overly
sweet, and refreshing in its finish.
And that’s the headline news domestically: a
detailed look at Krombacher’s strategy for its home
market is a story for another day. This, then, is a
nuts and bolts consideration of its export growth
strategy, one that begins with a belief in the quality
of the product and the reputation of the brand. It
is, in short, the model of an export strategy from a
modern major brewer.
THE THREE-STEP APPROACH
You can’t sell beer without a listing, and you can’t
obtain listings without having people knock on
doors. It’s a simple way of explaining that in its
designated strategic markets Krombacher is putting
its own people in those countries, investing in the
brand and brand awareness.
The most recent hire has been for the UK and
Italy. In September, Stephan Kofler joined as sales
director, based in the UK.
The highly-competitive British market is an
interesting one for Krombacher. While admittedly
off a small base, volumes for the first nine months
of 2014 were up 48% over the previous year – yet
the internal view at Krombacher is that all is not yet
“I strongly believe that where Krombacher is today
is not where we should be,” says Braun. “The driving
factor was ‘Where are we today with Krombacher?’
and ‘What is actually our fair share? What could be
our fair share?’ And that gap was so big as to say,
‘Hey, we have to do something serious about it’.”
The first step to growth is simply availability,
obtaining listings. As Braun drily notes, “If you’re not
there, you cannot be bought by the consumer.”
Then there’s activation and execution, measures
to lead consumers to sample and hopefully
repurchase, increasing stock rotation. Krombacher
starts by addressing consumers in a below the line
manner, for example tasting sessions in the on-
trade and shelving of gift packs in the off-trade.
There’s also the usual point of sale materials for
bars and restaurants, including branded glassware.
Lastly there is the third step: long-term brand
building, using public relations, advertising
campaigns and sponsorship of events.
With limited budgets, Krombacher isn’t in a place
where it can spend on advertising at the outset of
market entry, notes Braun.
“We cannot follow this path, so we have to walk
down this road which is to get the product there
first of all, make sure that people get in touch with
the product and then do repeated purchase. And
this exercise then generates money which can be
invested behind the brand.”
With this initial five-year plan’s objectives being
achieved in four, the push is on now for bigger and
better things, moving to what Braun describes as
a strategic export business. Six markets are being
targeted in particular – Brazil, China, Italy, Russia,
the United Kingdom and to a definite but lesser
The objective is to grow export volumes from just
under 200, 000hl currently to the aforementioned
500,000hl. It’s an ambitious and yet arguably
realistic target, one based on recent annual
double-digit gains that would taper off to
single-digit growth in later years.
Achieving such a result would mean that exports
would account for roughly 10% of Krombacher’s
beer volumes. The brewery produces 6.5mhl of
beverages annually, from which 865,000hl of
carbonated soft drink production must be deducted
to arrive at its beer output figure.
The desire to develop an export business is in part
due to the slow long-term decline of the German
beer market. Braun notes that the country’s beer
volumes have been dropping by between one and
two per cent annually for more than a decade.
THE BRAND POSITIONING
If there’s an overarching understanding of what
Krombacher is, primarily the Pils but concerning
all styles under the brand umbrella – it’s that
Krombacher is a premium international beer of
Note that this does not refer to the brand as being
German. This comes second on Braun’s list of seven
positioning statements. It is to be communicated
that Krombacher is Germany’s number one premium
beer in both volume and popularity.
Which doesn’t mean to say, as Braun phrases the
matter, that “low hanging fruits,” the German expat
communities worldwide, aren’t targeted at the
outset. But it can also be a limiting factor – creating
a perception that beer from Germany only belongs
in German restaurants and beerhalls.
Given the plethora of German beer brands available
in markets worldwide, it does have implications for
pricing strategy. While Krombacher might want the
margin available to an international premium brand
such as Peroni in the UK, the actual comparative is
with the likes of Veltins and Warsteiner.
What we are currently doing and asked
to do even more of, to build the
international volumes of Krombacher,
certainly counterbalances the decline
of beer in Germany,
The Krombacher brewery
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