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Krombacher Group marks all-time high for output (+3.5%) and revenues (+3.9%)
Clear growth trend as Krombacher and Schweppes brands achieve best-ever results
Yet another record year for the Krombacher Group: Both output and revenues again hit new highs in 2016, thereby maintaining the clear growth trend of previous years. Turnover has now increased consistently for 17 years running: in 2016 by +3.9% to reach € 745.3 million. The Group also achieved an increase in output of 232,000 hl, representing a significant growth of +3.5% – closing the year with a total volume of 6.937 million hl. So we can be more than satisfied with our performance in 2016.
Growth of the Krombacher Group’s top brands
The recipe for success in Krombach: long-term and value-oriented brand policies. A strong brand portfolio positions the Group optimally for the future. The leading brands Krombacher, Schweppes and Vitamalz are all on a clear growth path. As Germany’s largest beer brand, Krombacher’s growth is above the market level, with output surging ahead by 166,000 hl, meaning a 3% increase to 5.653 million hl. Revenues increased by 3.5% to € 622.3 million. The engine driving this growth is successful and sustainable development of the Krombacher umbrella brand.
Schweppes Deutschland likewise reached a historical peak. The new record high is 989,000 hl, an increase of 4%. Revenues grew by +4.2% and, at € 101.1 million, broke through the the € 100 million mark for the first time.
The Group also reached a further milestone in its non-alcoholic brand strategy with the acquisition of Vitamalz. This long-established brand achieved strong growth.
A stronger position in the gastronomy sector – draft beer again grows, against the market trend
Krombacher’s draft beer output grew, against the overall market trend, by 1%, or 7,000 hl, to 698,000 hl, , as more than 1,600 new gastronomic outlets were won over to the Krombacher brand. In total, 20,000 gastronomic enterprises now have Krombacher on draft.
Export business booming
Krombacher added 7,000 hl to its sales on the international market, a 3.4% growth to 212,000 hl. All strategic core markets, i.e. the USA, UK, Italy, Russia and Korea showed a plus.
The number of employees in Krombach grew significantly to 977 (2015: 951).
Sustainability strategy delivers further successes
Krombacher’s corporate sustainability strategy, defined by the motto “For the good of mankind and nature”, and the latest efforts in this regard, showed ongoing successes. Thus the CO2 emissions from energy consumption were reduced by almost a half, thanks to the deployment of green power. In August 2015 Krombacher successfully commissioned its own cogeneration plant with a capacity of 2 MW. A total of € 12 million has been invested in nature conservation and environmental protection in recent years, while Krombacher has provided around € 4.5 million to 1,162 social institutions and establishments since 2002 through, among other things, its annual donations campaign.
Krombacher Pils – the undisputed Number 1 – is growing across all sales channels
In 2016 the Krombacher brewery sold 110,000 hl more pils, an increase of +2.6%. Sales of Krombacher Pils increased significantly across all relevant channels. Consequently Krombacher Pils is firmly established as Germany’s favorite and most sold pils: sales by the Siegerland-based private brewery reached a total of 4.370 million hl. This corresponds to a market share of ten percent. In other words, every tenth pilsner beer consumed in Germany comes from Krombach; Krombacher continues to be positioned well ahead of the competition.
Market-leading Krombacher Non-Alcoholic grows further by 2.8%
Germany’s largest private brewery builds further on its non-alcoholic brands. Krombacher is now, as before, the clear leader in this growing market segment, showing a +2.8% gain of 10,000 hl to a current total of 362,000 hl. According to market research firm AC Nielsen, Krombacher Non-Alcoholic Pils is the top-selling non-alcoholic pilsner brand, and with a market share of 18.8%, it is a respectable five percentage points ahead of its nearest competitor.
Unabated strong growth of Germany's favorite radler
The brewery also reported significant growth for Krombacher Radler, which added 30,000 hl to annual output, equivalent to +6.5%. With this increase Krombacher Radler is just under the magical half million hl mark, with a total output of 491,000 hl. The introduction of Krombacher Radler Naturtrüb (naturally cloudy) had a particularly positive effect on the development of this popular product. Krombacher Radler also enjoys a clear lead in its segment rankings, with a 17.6% market share; the second-ranked radler lags behind by almost 10 percentage points.
With a market share exceeding 40%, Krombacher Radler Non-Alcoholic is the unchallenged market leader.
Krombacher Weizen slightly outperforming the market
Krombacher Weizen wheat beer performed well in a generally declining Weizen beer segment. With a moderate 4% fall to an overall output of 214,000 hl it did a little better than the market as a whole. In the home market of North Rhine-Westphalia (NRW) it made the Top 4, thereby appearing in the ranking as the largest non-Bavarian brand.
Krombacher Weizen Non-Alcoholic maintained its output volume, thus developing at a steady pace. It even won a larger market share.
Krombacher Hell established itself in core markets.
Following the successful product launch in the core NRW and north German markets Krombacher Hell (more delicately hopped lager beer) was unable to maintain its growth-dynamic. Output of Krombacher Hell stood at 61,000 hl in 2016, a decline of 5,000 hl. Krombacher Hell is the market leader in the light lager segment in NRW.
Successful launch of Krombacher Brautradition Kellerbier
Demand for specialty beers is growing, albeit on a small scale. Traditional and unique sensory experiences are in demand and naturally cloudy specialty beers are doing particularly well. Krombacher Brautradition Kellerbier successfully established its place in the market as Krombacher’s new specialty for lovers of distinctive beers. In its first year output reached 30,000 hl. The range of specialties falling under the umbrella brand Krombacher Brautradition was extended in November 2016 with the promising launch of Krombacher Brautradition Naturtrübes Dunkel, a naturally cloudy dark beer.
Krombacher’s Fassbrause range of soft drinks growing and building market leadership
Krombacher’s Fassbrause updates its success story. The product range and 0.00% alcohol recipe are the winning formula for constantly growing consumer demand. The 100,000 mark was passed with an increase of 9.9% and 9,000 hl. Whereas in the past there was a neck-and-neck race for market leadership, today the race to win consumers’ affections has decisively moved in favor of Krombacher’s Fassbrause: 29.1% market share means first place in the national brand ranking. The second placed brand, strongly focused on its local market of Cologne, is some distance behind with 22%.
Vitamalz – the perfect enhancement to the non-alcoholic brand portfolio
Having already become, in July 2016, the only licensee of Vitamalz, in September Krombacher also acquired 100% of the brand rights and could thereby achieve a further important milestone in its non-alcoholic brand strategy.
Vitamalz is an extraordinarily successful and well-established brand with extremely broad recognition and liking. As the first malt drink to be developed in Germany in the 1930s, this refreshing non-alcoholic beverage for young and old alike has had a robust presence in the German drinks market for decades. In the year under review Vitamalz recorded a growth of +34.4%, an increase in output of 48,000 hl to the current 180,000 hl. Numerous activation policies to be initiated in 2017 provide a strong growth perspective for the future.
Sundry brands in minus
Sundry brands of the Krombacher Group, including Rolinck, Cab, Eichener and Rhenania, maintained their regional significance but showed a fall in output of 20,000 hl, in part attributable to the decision not to pursue export business.
Non-alcoholic beverage brands at an all-time high
With the non-alcoholic brands Schweppes, Orangina and Dr Pepper, Schweppes Deutschland grew to return record results in terms of both output and revenue. The Schweppes brand showed a growth in volume of 46,500 hl, representing a strong 6% increase. With this, Schweppes’ total output stood at 825,500 hl. Alongside the continuing positive trend for tonics, Schweppes Wild Berry once again also delivered double-digit growth.
Orangina held steady over the 100,000 hl mark, though it had to reckon with a 6,000 hl fall to a total output of 102,000 hl.
Orangina in small containers developed very positively, in particular the iconic 0.25 l returnable “Bulby” bottle as well as the 0.33 l disposable can.
In 2016 Dr Pepper, the iconic US brand, was unable to maintain the growth dynamic of recent years, with output falling slightly by 2,500 hl to a total volume of 52,000 hl. On the other hand the 0.33 l Dr Pepper and the 0.5 l Dr Pepper Energy cans also showed strong gains.
Outlook for 2017
The successful extension of the non-alcoholic portfolio will also be consistently pursued in 2017
Fresh momentum driving Krombacher as the market leader in non-alcoholic beers
The demand for non-alcoholic beers has continued to grow for years and Krombacher is the largest supplier in this strategically important segment. With the introduction of Krombacher o,0% – a new generation of non-alcoholic, isotonic thirst-quenchers with 0.0% alcohol – Krombacher will continue down this path, which has been mapped out alongside highly successful non-alcoholic beers.
Most consumers know that the tiny alcohol content of less than 0.5% by volume in non-alcoholic beers is totally harmless from a physiological perspective. However, there are consumers who abstain completely from alcohol as a matter of principle, and who seek natural alternatives to soft drinks which are often sweet and artificial. Krombacher o,0% is thus aimed at those who consciously choose to avoid alcohol of any kind, but without sacrificing flavor.
In addition to the well known and loved non-alcoholic range, from January 23 Krombacher will offer a o,0% Pils and the first nationally marketed o,0% Weizen, which will be presented in their very own fresh, distinctive and differentiated brand design.
In March 2017 Krombacher’s market-leading Fassbrause will generate further brand momentum with the launch of the new Cola & Orange drink – sparkling, fruity and a real alternative to the established cola mix beverages on the German market – thereby addressing new consumers. Krombacher's Fassbrause Cola & Orange is made with orange juice, contains caffeine and of course has 0.00% alcohol. This new soft drink is aimed at the entire family and a young target group.
The brand makers in Krombach are confident of asserting themselves in the new year. “We will continue to do everything in order to win consumers over to our brands with high quality product offerings and the appropriate support, and in order to ensure continuous sustainable growth. New, attractive products and container packaging, together with high visibility, national consumer promotion in the summer will ensure that we secure attention, interest and new purchasing impulses for our leading brands,” according to Uwe Riehs, the company's Chief Marketing Officer.
Krombacher Group Annual Press Conference, Düsseldorf, January 10, 2017. Pictured from left: Stephan Maubach, Sales Director and Board Member at the Krombacher Brewery, Helmut Schaller, Chief Technology Officer at the Krombacher Brewery, and Uwe Riehs, Chief Marketing Officer at the Krombacher Brewery.
Krombacher Group marking an all-time-high in output and turnover
• Krombacher Group has achieved an increase in output of 130,000 hl, which represents 2.0 % and with this amounts to currently 6.707 million hl
• Turnover has also achieved +2% increase amounting to the record of 717 million Euros
Positive balance sheet report in Krombach: in the business year 2015 the Krombacher Group recorded a strong growth in output and turnover. The Group could increase its output by +2.0 % to the new, current record mark of 6.707 million hl. The total beer output could be raised by 55,000 hl, which amounts to a growth of +1.0 % to currently 5.756 million hl. The Krombacher umbrella brand has increased by 18,000 hl and with this by +0.3 % to currently 5.487 million hl. Also in case of non-alcoholic brands of the Schweppes Group results have never been better: compared to the previous year the business line of non-alcoholic brands has grown by +8.6 % to a new record mark of 951,000 hl (previous year: 876,000 hl).
Turnover could be increased from 702.9 million Euros by +2,0 % or by 14.1 million Euros to 717.0 million Euros, which also represents an all-time-high, in the course of which revenues from the Krombacher umbrella brand developed with +0.5 % to currently 601.2 million Euros (previous year: 598.4 million Euros). The sales volume of other brands could be increased from 2.8 million Euros to 18.8 million Euros, which results to +17.5 %. The brands of the Schweppes Group have recorded a growth of +9.6 % to currently 97.0 million Euros, which amounts to 8.5 million Euros (previous year: 88.5 million Euros).
Still gastronomy business is a difficult market. Demographic changes lead to closings in the rural gastronomy sector, whereas competition in urban areas is getting considerably tougher. The gastronomy business of the Krombacher Brewery has lost almost -2 % and has consequently decreased by 14,000 hl to currently 691,000 h (previous year: 705,000 hl). Excluded from this balance are Krombacher bottles, in particular the relief bottles for Krombacher Pils, which in gastronomy have recorded a plus and could therefore almost balance the result.
Growth in international business is continuing. Krombacher is frequently drunk in more than 60 countries – especially in Italy, Spain, Great Britain, Russia, USA, South Korea and China. Thus the good result of 2015 could once again be improved by +2 %. In the past year 205,000 hl and with this 4,000 hl more than in the year before could be sold in export.
The output for the other brands has increased from 232,000 hl by 37,000 hl to 269,000 hl, which represents a growth of +15.9 %.
The number of staff members slightly decreased to 951 (previous year: 968).
Krombacher Pils is and remains Germany’s most popular Premium-Pils
In the past year the flagship of the Krombacher Brewery has maintained its position as Germany’s best-selling and most popular Pils brand. Krombacher Pils has achieved an output of 4.260 million hl (previous year: 4.250 million hl) and with this records a slight plus of +0.2 % contrary to the downward trend on the market. With about 10 % market share (source: Nielsen) Krombacher in 2015 has successfully held its undisputed position as a market leader on the highly competitive Pils-market.
Since its market introduction 16 years ago Krombacher non-alcoholic has recorded permanent growth. Market leadership confirmed.
The trend to non-alcoholic beers as an alternative refreshment is still continuing. Meanwhile each tenth beer is non-alcoholic. It is therefore all the more gratifying that Krombacher non-alcoholic, with 19 % market share, is the clear market leader in this segment. In the year of 2015 Krombacher non-alcoholic could achieve a new record total output of 352,000 hl (previous year: 348,000 hl). A plus of 4,000 hl represents a growth of +1.1 %.
Krombacher Radler – undisputed market leader in the Radler-segment
Since its introduction on the market Krombacher Radler has grown from year to year, which was also the case last year: with a plus of +2.4 %, which in absolute figures means an increase of 11,000 hl, Krombacher Radler now records an all-time-high of 461,000 hl (previous year: 450,000 hl). This needs to be valuated even higher, as in the meantime a great number of competitors have entered the market. With more than 17 % market share Krombacher Radler is the clear market leader on the German Radler-market. Thus each fifth Radler drunk in Germany comes from Krombach. Krombacher Radler non-alcoholic is the clear market leader in the segment of non-alcoholic Radler. Here the market share of 42.4 % is even higher.
Weizen (wheat beer) from Krombach better than the market level
In the Weizen-segment the Krombacher Brewery can in total maintain a better position than the market trend of almost -3% at wheat beer, which with 223,000 hl represents a decrease of 5,000 hl and a minus of -2.2 %. Thus the development from the year of 2014 has been continued, which is mainly due to the negative market trend.
In 2015 Krombacher Dunkel fell short of expectations
In the beer market Dunkel and Schwarzbier (dark beers) are a small, but fine Premium niche. Also for a brand like Krombacher the dark beer speciality represents an interesting enriching of their assortment, although it fell short of expectations in 2015. In 2015 the output decreased by 6,000 hl to now 34,000 hl (previous year: 40,000 hl). Nonetheless we are absolutely convinced that Krombacher Dunkel has the potential to establish itself as a speciality on the long term.
Krombacher Hell is the market leader in NRW
Krombacher Hell, the full-bodied, easy to drink lager beer could find new consumers in 2015. After pleasant sales figures amounting to 64,000 hl in the first year and the market leadership in the segment Hell within the territory of NRW, Krombacher Hell in 2015 has currently recorded an increase of 2,000 hl and now reports 66,000 hl. Last but not least, the successful brand communication with Matthias Schweighöfer was a contributing factor.
KROMBACHER’S FASSBRAUSE – 0.00 % alcohol are convincing. Market leadership has been expanded!
IN 2015 KROMBACHER’S FASSBRAUSE closed its entries with a new peak value: another 2,000 hl are added so that the total output of 89,000 hl increased to 91,000 hl. With a market share of 26.3 % KROMBACHERS’S FASSBRAUSE is clear market leader in the segment of Fassbrause. The market strategy has paid off: KROMBACHER’S FASSBRAUSE is produced on the basis of a natural malt extract and dispenses with the admixture of non-alcoholic beer. Therefore it is a non-alcoholic soft drink with 0.00 % alcohol – which has been confirmed by the independent institute WESSLING – and it continues to convince new consumers.
For other brands, among which Eichener, Rhenania Alt, Rolinck, Cab and Vitamalz are run, an output of 269,000 hl (previous year 232,000 hl) and as a result an increase of 37,000 hl can be reported.
Non-alcoholic brands under Schweppes with record growth
The Schweppes Group with the non-alcoholic brands Schweppes, Orangina and Dr Pepper has reported a growth in turnover as well as in output. The brand Schweppes shows a growth of 60,500 hl, which corresponds to a strong plus of +8.4 %. Correspondingly, Schweppes reports a total output of 778,500 hl (previous year: 718,000 hl). In particular Schweppes Russian Wild Berry with the trend drink Lillet Wild Berry, Schweppes Tonic Water as well as Schweppes Fruity have contributed to this increase.
Orangina can also report an increase by +6.9 % and with this by 7,000 hl, which results to a total output of 108,000 hl (previous year: 101,000 hl): The comprehensive brand relaunch of Orangina with new product features, an own blue reusable box and the communication with Elyas M’Barek have shown a positive effect.
In 2015 Dr Pepper, the US-cult brand, could achieve 7,500 hl and with a growth of +16.0 % it has achieved a total output of 54,500 hl (previous year: 47,000 hl). Here it is in particular the new introduction of Dr Pepper Energy as well as the 0.33l can, which could grow to a disproportionate rate.
Good perspectives despite of declining beer market
The path in a declining beer market is stony. Therefore, many measures have been devel-oped, which will be put into practice in the coming year and are expected to boost sales. 2016 will be a special year for the beer market: The “Reinheitsgebot” (beer purity law) cele-brates its 500th anniversary. 500 years ago, on April 23, 1516 the oldest, today still applica-ble consumer protection law, was adopted. Krombacher will take the anniversary as an op-portunity to celebrate German beer culture and show that today beer in Krombach is still produced with the same Krombacher brewing art and passion – but with modern, up-to-date technology.
In addition a new type of cellar beer is regionally introduced in the core territories under the catch phrase “Krombacher brewing tradition”. There will also be a new Radler type with Krombacher naturally cloudy, which is characterized by a strong flavoured Radler-enjoyment of a different kind. With black currant KROMBACHER’S FASSBRAUSE a new flavour will be added.
New packages and an attractive national consumer promotion will provide for interest and attention in the Football-EM (European Football Championship) and Olympia-Year 2016.
In the soft drink area the Krombacher Group will tackle the magical threshold of one million hectolitres. For this purpose there will be a lot of new packages and the successful commu-nication will be continued. With Schweppes Fruity Orange a new product will be launched on the market. Already in September 2015 Schweppes Cola was introduced to the Austrian market as a new product; an introduction on the German market is planned for spring 2016.
„The new growth in 2015 rewards our long-term brand strategy”, says Uwe Riehs, managing director of the Krombacher Brewery, who is optimistic about the future: “It is, however, not our intention, to rest on our laurels. Also in 2016 we of course will strengthen the power of our brands, in order to successfully establish ourselves in the market. Our high product quality and our great passion for our brands Krombacher, Schweppes, Orangina and Dr Pepper will also in future provide for sustained growth.”