For the Belgian beer industry, the Covid year 2020 was a year to be forgotten quickly. Beer consumption at home collapsed by just under a fifth. And export, which in recent years compensated for the shrinking domestic volumes, also felt the impact of the coronavirus restrictions in the rest of the world. The result: it was the worst year for the Belgian beer industry since the Second World War.
Halving in the Belgian hospitality industry
These are the figures from the sector federation Belgian Brewers. The numbers are harsh. Volumes within the Belgian hospitality industry halved from 2.95 million hectolitres in 2019 to 1.54 million hectolitres last year. However, sales in supermarkets partly compensated for this as they rose by 2.6 per cent. Covid has thus accelerated the long-term trend towards more home consumption.
Of course, this is a momentary snapshot distorted by the pandemic. It remains to be seen how (fast) the Belgian hospitality industry will recover after months of compulsory closure. Krishan Maudgal, director of the Belgian Brewers, wants to do away with the capacity restrictions in pubs as soon as possible. “We must be able to drink beer again as soon as possible,” he says in Belgian newspaper De Standaard.
Looming bankruptcy wave
The question is whether the easing of the measures will come in time for the pubs and restaurants. The sector fears a wave of bankruptcies. In Belgian newspaper De Tijd, market leader AB InBev estimates that 30 per cent of Belgian restaurants and pubs will have to close their doors for good in the coming years. The coronavirus crisis has dug deep into the financial reserves. Many pubs have been able to survive thanks to government subsidies and payment deferrals from landlords, banks and the tax authorities. But that narrative will end. And when those factors kick in again, the end is looming for many.
The many brewers in the country also have to adapt to this reality. The export volume could not compensate for the decreased domestic volumes. European exports held up reasonably well, with France and the post-Brexit UK as the main strongholds. There, the volume increased by 3.3 per cent. But to the rest of the world, brewers shipped 18.3 per cent less beer. Also, in Europe, Belgian beer often goes to supermarkets. While in the rest of the world, it mainly gets sold within the hospitality industry. That fact plays a key role.
But it also means that worldwide exports will pick up again as the restrictions on the hospitality industry get eased. But many brewers have learned a hard lesson, reports De Tijd. Especially those who used to rely heavily on the hospitality industry, such as Brouwerij Haacht. They had to adjust their strategy and focus more on sales through supermarkets and liquor stores.
Consumption of beer in Belgium (in hectolitres):
(Afbeelding jaarverslag Belgische Brouwers)
