Last year brought a 7% drop in sales for the brewing industry. While in 2018 Poles drank around 37 million hectoliters of beer, the first two years of the pandemic brought a drop of 2 million hectoliters. Interestingly, a drop of this size was also recorded in 2023, year-on-year. The last two years have also seen an increase in beer production costs by an average of ¼, but also 15% price increases (on average, this is equivalent to PLN 1 in nominal terms) on store shelves, which to some extent offset market challenges for producers.
Representatives of the sector explain, and rightly so, that the increases could not be avoided – rising energy prices, increased transport and packaging costs have had their effect here – and it must be remembered that the industry faces challenges related to the unfavourable construction of the new mechanism shaping the deposit system in Poland. Barley, hops and even glass from which bottles are made are more expensive. Producers have little room left in the area of price formation. Despite these difficulties, the value of the market itself increased in 2023 and is currently estimated at PLN 22.8 billion, i.e. 7.1% more than in the unpredictable year 2022.
In addition, beer is not a basic necessity for Poles, so it has become an element of the savings made by our compatriots in difficult times after the pandemic, excise tax increases, times of high inflation in recent years and, finally, times of war uncertainty, which is leaving its mark on our wallets.
Not all beers are the same
Interestingly, not all categories of the sector recorded declines. The exception is the dynamically developing non-alcoholic beer segment in recent years, which increased its market share for another year in a row. Today, it is around 6.5%, compared to 6.3% in 2022.
There are many indications that alcohol-free beers will become ingrained in consumer awareness for a longer time, and their consumption will steadily increase. This is also in line with the general pro-health trend, a component of which is, for example, taking care of physical activity.
The question that the market is asking itself is about the place that this category will ultimately occupy. It seems, considering the statistics of recent years, that there is still a long way to the glass ceiling. Producers see the change and are gradually expanding the portfolio of products offered to consumers. The past few years have been a flood of solid quality IPA, APA and other popular types of beers, but… without alcohol.
Noticeable sales declines were recorded last year by the most expensive beers, i.e. those that had been on a strong upward trend before the pandemic. We are talking about a drop of almost 15%. “Connoisseurs” of the cheapest beers were also forced to make savings, limiting their consumption, which was reflected in the sales columns. Strong lagers sold almost 10 percent less than in 2022.
The key period of higher temperatures and garden bar and restaurant madness for the industry was not uniform. In May 2023, year-on-year, the decline in sales was 9.3%, in June it was 11.9%, in July 5.2%, and in August 8.8%.
Beer sales are to some extent a barometer of the economic situation. Certain “historical breakthroughs” of recent years are clearly visible here. For example, high interest rates, which translated into record loan installments, meant that there were fewer bottles or cans of the golden beverage in baskets.
Poland is still strong
Producers predict rather optimistic scenarios for the future. Optimistic moderation, because the situation on international markets is to some extent unpredictable. Nevertheless, the economic situation seems to be stabilizing. The beer production sector is important for the Polish economy due to tax revenues, real value, but also employment. The brewing industry generates many thousands of jobs throughout the value chain – these are farmers, sellers, suppliers, employees of the HoReCa industry and finally a wide range of people employed directly in production plants.
Poland is also a major player in the EU beer market. Today, we supply half as much as Germany, which is the leader in the EU tables, but still, on average, every tenth bottle of beer in the EU was filled on the Vistula.
It would be a good idea to take care of the sector and at least not make it harder for it to work in a difficult economic period. After all, this is the largest FMCG category in Poland. Do we really need to add to the worries of producers in the form of, for example, a deposit headache?
READ ALSO: The deposit law will destroy a system that works efficiently