High hopes for Germany’s biggest brewer in the UK

Germany’s biggest brewer, the Radeberger Group, is entering the UK market with its best-selling Pilsner, which distributor Copestick Murray said had the potential to be “huge” in the UK market.

Copestick Murray launches Radeberger beer (image: Copestick Murray)

Radeberger Pilsner was established in 1872 and is brewed by the Frankfurt-based Radeberger Group, Germany’s largest brewery, which has a 14.7% share in the German beer market and reported a total group turnover of around €2 billion in 2016.

The beer brand is one of the top five Pilsners in the German market, but until now has not attempted to enter the competitive UK market, despite building “substantial” sales in the domestic market, the US, Canada, Europe and being in a total of 87 export markets. But its UK distributor Copestick Murray said it was the “perfect time” to launch the brand in the UK, and it was the “natural partner” to take it to the UK market. The German brewery group is owned by the Oetker Group, and is a sister company of Copestick’s parent company Henkell & Co, the Oetker Group’s sparkling wine, wine and spirits division.

“As with wine, people are drinking less but better, so there is a trend of people trading up to a slightly more premium beer,” Copestick told db. “This is a new beer [to the UK, but comes] with a massive heritage, so there is that immediate trust, and the best of both worlds.”

The Pilsner was unveiled by Copestick Murray at the London Wine Fair last month ahead of its UK launch.

Beer consumption in Germany has fallen from around 145 Litres per capita in 1980 to around 105 Litres per head in 2015, according to statistics database Statistica and the market is historically very fragmented. Despite the company’s size in Germany (it is the biggest brewery in Germany with an output of around 11.8 million HectoLitres in 2015), it ranked 23rd in the global beer market the Barth Report of global brewing 2015-16 (down from 21st the previous year), with a 0.6% share of the total global beer production, compared to AB InBev and SAB Miller’s combined market share of 31.8%.

But Copestick said the pilsner had the backing and potential to be “huge” in the UK, adding that the launch strategy and route-to-market for the beer in the UK would be slightly different to that of Copestick’s wine portfolio, which includes the ‘I heart wine’ brand, due to the fact that “beer has different rules”.

“If you are starting a new wine brand, it is such a congested playing field it would be difficult to break through,” he noted. “In wine, with something like I heart, you would chose to go the multiple route, and therefore not the specialists, but beer can cross every channel if you price everything properly, so I see the same beer products in Tesco as I do in my local wine merchant or restaurant.”

Copestick said it would be a case of managing the brand “properly”.

“We are not excluding any players, but we will put a lot of emphasis on brand management and building the brand up. Because Radeberger is such a successful company, we are under no pressure to sell 200 million cases to justify our existence, their biggest concern is that we build the brand properly, make a slow start and build the brand the right way.”

“But if we have success, they will back us all the way,” he added.

There were, he said, a number of on-trade, premium and convenience retailers already interested in stocking the German pilsner, but it was also looking at the UK off-trade.

“One thing that has helped Copestick Murray is that we are not classed as an agent anymore, more of a brand owner and direct supplier, so when it comes to Mionetto or Radeberger Pilsner, it is part of our company. In the same way that you would only go to Accolade Wine to get Mud House, you’d only come to us to get Mionetto, and Radeberger fits with that,” he said.

On-trade ambition

Speaking about the wider company, Copestick said it had not ruled out further acquisition or expansion.

“We have ambitious growth targets, and that might be by acquisition or just through organic growth,” he told db. “One thing we want to do is more in the on-trade and we have created an on-trade division with wines only available to the on-trade, such as Survivor, which we had before. But it is growing quickly. And  we have gone into premium mixers (with the Indi botanical range) and spirits (with Wint Gin) and will be selling Radeburg Pilsner too which could be very big.”

Copestick Murray told db at the London Wine Fair that is it planning to launch entry-level generic red and white blends to its ‘I heart wine’ range due to the likely price rise in varietal European wines following the late Spring frosts, as well as the three premium regional-led skus under the flagship brand that were unveiled at last month’s show. It is also bringing a new contemporary Hungarian brand, Törley Talisman to the UK market, which aims to “invigorate’ the Eastern European markets and generate “mainstream interest” and is set to launch in Tesco this month.