With revenues of 7.6 billion euros ($9.9 billion), the German brewing industry isn't exactly scraping the bottom of the barrel. But it can be said that they're experiencing something of a dry spell.

Current capacities would theoretically allow German breweries to produce 1.5 billion liters of beer per year. Last year, however, just 980 million were produced.

For years, German brewers have had to reckon with lower sales figures. The culprit? A waning German palate for the national beverage. In 1976, the average German consumed 151 liters of beer per year - or three large kegs. Today that number has dropped to 107 liters, or just over two kegs.

'Special offers'

In total, approximately 1,340 breweries dot the German landscape. With 60 employees and a yearly production of 14 million liters, the Moritz Fiege private brewery in the German city of Bochum is one of the "healthy" ones. The Fiege company has seen 135 years of production. It has also been in the family's hands for four generations.

"The process of consolidation can be felt everywhere," said company owner Hugo Fiege in an interview with DW. "We have a price-point problem that's tough across the board."

Even the five premium German beer labels that dominate the domestic market have come under pressure. It's not only that Germans are drinking less beer these days, but that they're buying that beer in a market that's becoming increasingly squeezed. Competition between German supermarkets means that one or more beers is almost inevitably available at a sale price.

For Fiege, such reductions in price are one of the reasons for reduced interest in beer. In his view, beer that's permanently on sale reduces the attractiveness of beer itself.

Regional markets

As a result, private breweries have set their own limits in the age of price warfare and brewery concentration. "That's how we can keep ourselves economically viable and keep the company healthy," said Hugo Fiege. His own company's strategy involves not only selling large quantities, but also ensuring that their beer is sold at a reasonable margin of profit.

Beyond that, Germany's Mittelstand breweries, or small to mid-sized businesses, place a far higher emphasis on regional penetration. The Ruhr area, which forms the industrial heartland of Germany's largest state by population, North Rhine-Westphalia, constitutes its own self-contained market in Fiege's eyes. "Many people live here, so we'll still have plenty to do in the next few years," he said.

Rather than "expansion at any price," the company instead plans to anchor itself as a firmly-established brand within the region. Thus their bottles don't come with the standard bottle caps but with re-sealable, ceramic swing-tops. Beer, in the company's philosophy, is a beverage to be enjoyed - and not as a drink-and-toss affair.

Good beer takes time

Fiege's product range is comprised of ten beers, from Altbier - a darkish ale - to hefeweizen (wheat beer), alcohol-free and Radler, which is a mix of beer and either soda or lemonade. Roughly 60 percent of sales are earned from the company's bitter classic: pilsener. At the same time, the company has adapted to developments within the beer market. Thus Fiege was relatively early when it came to the production of a strong Schwarzbier, or "black beer," as well as with a light and sweeter beer variety aimed at the female market.

As for the fast-moving trends in beer-mix beverages, many of which are highly popular among younger demographics, the company isn't running behind. Fiege's reasoning isn't economic but rather has to do with his belief that the modern "German Beer Purity Law," with its regulation that beer be composed of nothing but water, barley, hops and yeast, already provides enough space for beer flavors. "To be creative with beer, you don't have to mix it with other drinks," he said.

In the heavily contested German beer market, Fiege's mid-size brewery in Germany's Ruhr region is ranked in the top third among German beer producers. Quality counts highly to the company. Its beers need plenty of time before they are bottled.

It's exactly that interlude between brewing and bottling that Mark Zinkler, the company's head brewmaster, refused to shorten.

"Industrial companies need one week. We most certainly need six-to-eight weeks," Zinkler told DW. "But that has more to do with the fact that we allow our beer longer periods of storage and maturity - which is also good for digestibility."