What’s with all the gypsy brewing in Germany?

It will come as no surprise to many that new breweries are popping up all over world and Germany is no exception to the trend. The Deutscher Brauer Bund (German brewers association) announced in 2016 that 107 new breweries were registered between 2005-2015. A cause for celebration, hurrah! However, what the Brauer Bund fails to mention is how exactly one defines a brewery. Whilst this may sound like a very 21st century philosophical conundrum, it is important to ask in order to verify the accuracy of this statistic. Germany is home to a rapidly growing number of ‘gypsy brewers’ and it is unclear what the Brauer Bund’s stance is on this brewery set-up, as they do not differentiate between a classic brewery and a gypsy brewer with a beer brand in any of their press releases or statistics. Very peculiar. But this got me thinking about this surge of gypsy brewing in Germany and I came up with a few ideas for why I think this may be the case.

First and foremost, a gypsy brewer is someone who produces beer commercially but does not have a facility of his or her own. Gypsy brewing offers a realistic alternative for people who do not have the significant amount of start up capital required to invest in their own premises and equipment. Gyspy brewing is particularly attractive to some because it allows the brewer to produce beer on a commercial scale without taking the as many of the associated capital risks. This means some gypsy brewers can choose to focus their efforts and distribute capital in ways different to brewers with their own facility, such as placing increased value on raw materials selection, marketing and distribution. It is for this reason so many gypsy brewers are prepared to travel, experiment with different ingredients and styles and distribute their products far and wide. An example of such is German gypsy brewer Sebastian Sauer and his beer brand Freigeist Bierkultur. Sebastian focuses on historical German beer styles, such as Grodzisk and Adambier, and attempts to bring these back to life. Sebastian mostly works together with breweries that are located in Germany and the USA.

Freigeist Bierkultur enjoys more recognition and fame in the USA than in Europe

What is it though about this business model that seems to be more appealing to the German entrepreneur than to others around the world? As is often the case, bureaucracy is baffling and paperwork is dull. Even for the Germans. So much so that entrepreneurs are perhaps shying away from the infamous, additional red tape associated with founding a brewery in Germany. A Kafkaesque scenario (my German degree has now officially paid off, woo!) may spring to mind when one considers the various formalities that must be met by German brewers. For example, whilst you do not require a formal brewing qualification to be able to open a brewery, you must be able to prove to the local authorities that you have some form of ‘technical knowledge related to the craft’, such as a technical degree or similar qualification. In addition, and perhaps most bizarrely, a brewer must also acquire special permission to brew any beers that contain ingredients that do not conform to the Reinheitsgebot (there we go – I mentioned it. Much more to come on this topic in the near future). If permission is granted and the fees are paid, a brewer is allowed to categorise the product as a “besonderes Bier (special beer). Finally, a brewery must have a specific taxed good storage area, which would be a huge advantage if this already exists. Gypsy brewing requires the entrepreneur to jump through fewer bureaucratic hoops and allows you to make the most of any pre-existing tax regimes and local experience in the various formalities. Unfortunately most of these factors cannot be avoided anyway, gypsy brewer or not.

Germany has generally been a bit slower on the uptake of craft beer and I think this is the second reason for which gypsy brewers seem to make up a more considerable proportion of the new brewery statistics than elsewhere. Germans are generally better at saving money and are reluctant to take on debt. Whilst this psyche does guarantee a certain security, it does of course mean that fewer risks are taken. Opening a brewery in Germany, where craft beer is still such a largely misunderstood and underdeveloped industry that is still in its infancy, can certainly be considered as a risky venture. The combination of the German saving mentality and what can only be considered as a shot in the dark in a new, risk-laden market means gypsy brewing is one of the very few opportunities available to those who want to brew beer on a commercial scale. This model significantly reduces expenditure and collateral to a minimum, allowing the German gypsy brewer to essentially bide time, in case craft beer doesn’t boom domestically like it has elsewhere.

Excessive red tape, minimal risk taking and the Brauer Bund’s failure to even allude to gypsy brewers are not exactly conducive to further new brewery openings in Germany. However, I say hats off to all the people out there that are taking the gamble, with their own facility or without, despite some of these challenges faced.

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