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A Tale of Two Cities: Paulaner, Hacker-Pschorr, and Canned German Imports

Are German imports better than American takes on German beer? It all depends on your point of view and I’ve heard it argued both ways. Overall, cans may be better than bottles, and of course there are more American beers in cans than German imports. An improved cold chain certainly helps German beers. I’ve argued it both ways myself and it breaks my heart to say this but the Spaten Lager I had at the Red Porch at Nationals Park was by far the cleanest and most satisfying lager I had at the ballpark last year (despite best efforts to enjoy all of the craft lagers while cheering on the home team).

“The can has revitalized the franchise,” said Steve Hauser, CEO of Paulaner USA, in regards to introducing new drinkers to older brands. The Paulaner Brewery is one of Munich’s largest breweries and Paulaner USA imports Paulaner, Hacker-Pschorr, and other brands like Fuller’s, Früli, and Fürstenberg.

In January Hacker-Pschorr put their Weissbier into cans for the first time, 600 years in the making. Last year Paulaner canned Original Munich Lager and Hefe-Weizen, introducing this packaging to the American market. The can stands out as the 16.9 oz format is larger than the standard 12 or 16 oz packaging typical of domestic canned beer. 

“It’s a tale of two cities,” Hauser said in regards to the success of Paulaner and Hacker-Pschorr (a city on the rise) despite declining sales of German beer in the US (a crumbling city). Over the last 10 years German imports have seen a steady decline in our market. Blame craft beer, blame macro lager, blame hard seltzer, but whatever the cause, German beer is not selling as well in 2020 as it was in 2000 or even 2010.

“When you build your brand and your products around heritage and tradition, like so many of the best German brewers have, there’s a risk that you end up being seen as old fashioned and even stodgy. The challenge is to hold onto what makes your brand special while also keeping it relevant to today’s market,” says Michael Uhrich, founder and chief economist at Seventh Point Analytic Consulting.

Hauser confirmed Paulaner was up 6.5% growth in total by IRI tracked data and Hacker-Pschorr was up 18% on depletions, which is a fancy way to say the total number of cases sold through distributors to retailers. In May, Paulaner saw 3,500 cases sold on depletion since March, so they were moving about 1,000-1,500 cases per month.

Hacker-Pschorr was the fastest growing German import in the US in 2019. When we spoke, Hauser mentioned that sales of Paulaner are up 65% in Total Wine and 45% in Chicago’s famed Binny’s chain. Traditionally, Paulaner sold 55% of its beer on premise, and 45% off premise. More was sold over the bar via draft than in the bottles and recently added cans. Interestingly, America is not the top market for export. According to Hauser, Italy is one of the largest buyers, as are France, Austria, China, and Korea.

So how did Hacker-Pschorr grow in the US? In a word, cans.

According to Uhrich, “the importance of aluminum cans to beer’s ongoing success cannot be overstated.”

“Twenty years ago German beer was more than 5% of U.S. beer imports. Their annual volume in the U.S. was about 1.2 million barrels, which is roughly the same amount that Sierra Nevada will sell this year.” Last year, Uhrich says, the United States imported just half that much.

Putting that number in perspective, in 2000, when DC had only two breweries (Capital City and District Chophouse), the US imported 1.2 million barrels. That is the equivalent of 2.4 million kegs coming from Germany imported to America. Or thinking of it another way: one keg of Paulaner or Hacker-Pschorr, for every three people in Maryland (of course that number also accounts for all the others imported Augustiner, Benediktiner, Bittburger, Erdinger, Hoffbrau, Spaten, etc.).

“A lot of what drove beer over the last few decades has been innovation and excitement” Uhrich says. In 2000, very few of America’s 50 largest craft breweries were sold in DC (some still aren’t).

One brand that Paulaner was particularly excited about was its Grapefruit Radler, a 50/50 blend of its Münchner Lager and a grapefruit infusion bringing the product down to 2.5% alcohol by volume. Grapefruit Radler launched for the first time in the US market, though it has been in production in Germany since 2018.

So what does the future hold for Paulaner? One one hand, Paulaner saw great success in the US by canning their other brands, so in theory Grapefruit Radler should follow that trajectory. But it’s also the end of the warmer months and summer beers like radlers tend to slow as we move into winter.

Anecdotally, there are still many places in the DMV selling Stiegl Radler-Grapefruit. If Paulaner Grapefruit Radler could unseat Stiegl at some bars and restaurants they would further gain ground in the District.

So who will be the fastest growing German import in 2020? Will the can shortage affect Paulaner and Hacker-Pschorr? We won’t know for a short while, but it wouldn’t surprise us if they are again the number one imported German beer for 2020 and if the can shortage isn’t a factor due to their size.

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