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Germany: Breweries face declining sales, pivot to exports amid global shift

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German brewers are grappling with a shift in global drinking habits, as Oktoberfest unfolds amid falling beer sales and a rising tide of non-alcoholic alternatives. Yet in Munich, the pull of tradition remains strong, millions have gathered for the 190th annual Oktoberfest, running from Sept 20 to Oct 5 this year. The iconic 1-liter beer mug remains a symbol of celebration, but beyond the festival grounds, drinking habits are changing fast. "I feel like our generation drinks a little bit less than the older generations," said an attendee at the event. "I see that some of my friends choose to drink non-alcoholic beer," said another attendee. "You can have fun without alcohol," said two young women at the event. Outside Oktoberfest, beer sales continue to fall to historic lows with a 2-percent decline last year, followed by a further 6.3-percent drop in the first half of this year. Weihenstephan, the world's oldest continually producing brewery, is a witness to centuries of drinking habits, since monks began brewing beer there in 1040. "Overall it's a substantial decline in alcoholic beers. It’s probably 20 percent less than it was 20 or 30 years ago. So, we are talking a paradigm change basically," said Anton Hirschfeld, online marketing manager of Weihenstephan. Inflation has made beer more expensive, while greater health awareness is prompting more people to go alcohol free. "We see a huge increase in alcohol free option and if you don't jump the train now as a brewery, you miss out on a lot of business. Eleven percent of our total volume is alcohol free beers and it is only growing more and more. But we are not at that point where the alcohol-free beers make up for the loss of the alcoholic beers," said Hirschfeld. Germany has been Europe's largest beer producer since 2013, but it's just lost that title to the Czech Republic. The situation is putting an increasing strain on German brewers, prompting them to increasingly focus on customers abroad. While German beer exports are down 6 percent from 10 years ago, exports are still proving more stable than domestic demand. Weihenstephan exports 70 percent of its production to over 60 different countries, with growing demand coming from Asian markets, such as China, where beer consumption is increasing. "We have seen a huge increase in exports because German beer all over the world is matched with a certain level of quality. So for us, we still have growing markets to play in and the Asian market is incredibly interesting to us," Hirschfeld said. The video shows: Munich, Germany - Recent 1. Various of 190th Oktoberfest in progress; people celebrating, tasting beer, food 2. SOUNDBITE (English) attendee, Oktoberfest (starting with shot 1): "I feel like our generation drinks a little bit less than the older generations." 3. Various of beer, people toasting 4. SOUNDBITE (English) attendee, Oktoberfest: "I see that some of my friends choose to drink non-alcoholic beer." 5. SOUNDBITE (English) attendee, Oktoberfest: "You can have fun without alcohol." 6. Various of beer tap, beer production line in brewery 7. SOUNDBITE (English) Anton Hirschfeld, online marketing manager, Weihenstephan Brewery (starting with shot 6): "Overall it’s a substantial decline in alcoholic beers. It’s probably 20 percent less than it was 20 or 30 years ago. So, we are talking a paradigm change basically." 8. Various of facilities in brewery 9. SOUNDBITE (English) Anton Hirschfeld, online marketing manager, Weihenstephan Brewery (starting with shot 8/partially overlaid with shot 10): "We see a huge increase in alcohol free options and if you don't jump the train now as a brewery, you miss out on a lot of business. Eleven percent of our total volume is alcohol free beers and it is only growing more and more. But we are not at that point where the alcohol-free beers makes up for the loss of the alcoholic beers." ++SHOT OVERLAYING SOUNDBITE++ 10. Various of bottled beer, beer case ++SHOT OVERLAYING SOUNDBITE++ 11. Various of beer production line in brewery 12. SOUNDBITE (English) Anton Hirschfeld, online marketing manager, Weihenstephan Brewery (partially overlaid with shot 13): "(We have seen a) huge increase in exports because German beer all over the world is matched with a certain level of quality. So for us, we still have growing markets to play in and the Asian market is incredibly interesting to us." ++SHOT OVERLAYING SOUNDBITE++ 13. Various of beer production line, workers ++SHOT OVERLAYING SOUNDBITE++ 14. Various of truck loaded with beer [Restrictions: No access Chinese mainland]

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