Oettinger Brauerei is the largest brewery located in Germany with sales of over six million hectoliters annually. They do this in a very unusually way, they do not advertise and they sell directly to stores (no wholesalers) which can be done in Germany. The brewery is highly automated with very few employees and their sales are mostly in packages with very little draft.
While building Glazers beer business, a gentleman representing Oettinger contacted me. He offered the brand to us and asked that it be sold in all of the twelve states in which Glazers had operations. When asked what their US strategy and marketing plan would entail, their answer consistently was: “Oettinger is the largest selling beer in German!” It was obvious that the Oettinger strategy for the US was the same. No marketing or support, just cheap beer. Glazers passed on Oettinger and even today the brand is not in the US.
Hofbrau Brauerei, out of Munich, and one of the original Oktoberfest beers has used an opposite strategy in developing a presence in the US. First, the brewery did a JV with a gentleman who not only was from Germany, but lived in the US, with US beer experience and background. While it took a while, a US distribution network was built. The brewery decided to franchise brew pubs, restaurants, and beer halls based on the Hofbrauhaus in Munich.
Over the years these Hofbrau houses have been built in Las Vegas, Cincinnati, Chicago, New York, Pittsburgh, Miami, and Panama City. Note that the cities where these Hofbrau operations have been located are either tourist centers or have a German population. This business model is working well in building the Hofbrau brands.
Stone Brewing Company, of California, just announced that it would build a brewery and restaurant in Berlin, Germany. They also announced they would export from Berlin to other cities and countries in Europe.
When discussing the US operation with the CEO of Warsteiner while he was looking for someone to head up the US Company, he stated that he could bring a German in to run the operation. I asked how successful I would be if I went into Germany with an import? He stated I would fail. So the question back was, “What makes you think a German will succeed here?”
The German beer industry is tied houses; the breweries own the retail operations. Every little town in Germany has a brewery. Every bar, restaurant, hotel, and retail outlet has the local towns’ beer, exclusively. In fact, only a very few beers are available throughout the country. Unless you are in a major city, at a major international hotel, it is next to impossible to find an imported beer.
With Stone Brewing Company building in Berlin, it seems Stone has studied the US Hofbrau model and might be following a model along that line. So the question will be: Just how successful Stone will be? A sound strategy starts with having the right goal.
Beer Fodder;
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