The Recovery is Real: 50% Jump in Open Merchants in Germany

The F&B industry has been one of the hardest hit by the COVID-19 pandemic. Immediately after lockdown measures were announced, our CPG data* showed only around a third of restaurants in our panel remained open in Germany and the Netherlands.

Clearly, many restaurants needed some time to adapt their business and pivot to delivery and takeout. While there was incremental growth in open merchants in the weeks following the shutdown, growth has been slow and gradual. Since the lockdown, nearly half of restaurants in Germany are now back in business, while 20% more restaurants in the Netherlands have reopened since the lockdown came into effect.

However, it appears that German F&B is seeing a healthier recovery in sales per merchant. While there was a sharp decline in sales leading up to more stringent social distancing measures, it made a significant gain the following week. While German restaurants are still making considerably lower revenue with the loss of dine-in sales, the value of restaurants receipts in the week of 20 April was over 75% of receipt value in a “regular” week prior to the lockdown. 

Meanwhile, Dutch F&B merchants have been less fortunate, seeing no sharp bounce-back after bottoming out. Even in mid-April, when it was being reported that food order volumes in many virus-stricken countries were on the rise again as cooking fatigue set in, sales growth in the Netherlands remained minimal and sluggish. Restaurants were just barely raking in half of the sales they used to. 

While more restaurants are reopening and sales are slowly picking up again, it will be critical to keep an eye on these figures once F&B businesses in both countries are allowed to accept dine-in customers once again.

About our data:
Suburbia partners with companies in the payments and retail industries to create data sets that track anonymized consumer purchases across Europe, delivering a daily view into some of the world’s biggest consumer brands. For insights on consumer packaged goods (CPG) trends, Suburbia’s data set covers sales in over 14,000 on-trade channels across six countries in Europe.

Erdinger and Heineken are big winners in rise of no-alcohol beer

As we’ve seen in recent years, low- or no-alcohol beverages are on the rise as people adopt healthier lifestyles. It’s reported that Germany could be the largest market in Europe for zero-alcohol beer. But even a smaller market like the Netherlands is becoming a breakout star in terms of merchant and sales growth. 

The number of Dutch bars that are stocking non-alcoholic beer are on the rise, and so are sales per merchant – which are growing nearly twice as fast as regular beer. This means establishments that offer no-alcohol beer will see increased sales as more people choose to abstain from drinking.

Meanwhile, sales per merchant for soft drinks – historically one of the main alternatives for alcoholic beverages before zero-alcohol beer came along – have been sluggish, growing a half percent year-on-year in both markets. 

In Germany, the top brands for non-alcoholic beer are all from privately owned breweries – with Erdinger being the most popular choice, followed by Maisel and Krombacher. This could be credited to Erdinger’s long-time efforts to market its alcohol-free beer as an “isotonic sports drink”, even supplying it to national athletes during the Olympics.

Meanwhile, in the Netherlands, Heineken’s 0.0 beer is the market leader while another brand in the Heineken portfolio, Amstel, takes second place. Asahi’s Grolsch comes in third in terms of sales volume.

Data Shows that Pandemic Compelled Businesses to Act Faster Than the Government

  • Businesses more proactive than governments in Europe
  • Public behaviour no different in hardest hit regions in Germany and the Netherlands

The COVID-19 outbreak has thrown much of Europe into lockdown. Germany and the Netherlands have shut bars, while restaurants are allowed to stay open only for takeout and delivery services.

In recent days, both countries have also tightened rules on social interaction, banning groups of more than two or three people for gathering. It has been two months since the first confirmed case surfaced in Germany and nearly a month since the Netherlands’ first case – so have these moves come too late?

While this is up for debate among epidemiologists and public health policy experts, we analysed our CPG data* to determine two things: business response and public response to the crisis in Germany and the Netherlands over the first quarter. As a proxy for public behaviour, we looked at key indicators such as the number of transactions and sales volume at thousands of F&B outlets across these two countries.

Store closures preceded government action

In both countries, a plunge in open outlets occurred just days before the government introduced tougher measures to combat the spread of the virus, and mandated the closure of clubs and bars.

It seems that many businesses had already taken the initiative to close their doors before any government order. In Germany, voluntary closure of restaurants increased a few days earlier than in the Netherlands. On March 9, when the first COVID-19 deaths in Germany were reported, one-third fewer restaurants remained open compared to the Q1 weekly average.

Restaurants probably decided to shut down since more customers were staying home and shunning busy places in the wake of growing cases. Or they might have found it hard to enforce social distancing by seating diners at least 1.5 meters (5 feet) apart. Regardless of the reason, we can see from total sales volume below that this was a sudden, rather than gradual, dip in activity. It seems the rapidly escalating outbreak had little impact on public life – people were still going out to eat and drink as usual – but this was brought to a virtual standstill on the weekend of March 14.

We looked at sales volume in regions that were hit hardest by the pandemic – Germany’s North-Rhine Westphalia and the Netherlands’ Noord-Brabant province – to see if activity there differed from activity at a national level. But it appears that business and public behaviour in those regions were not significantly different from the rest of the nation, despite more stringent regulations being introduced there first.

In summary, the data demonstrates that even when the pandemic strikes close to home, it tends to be business as usual during the early days of the outbreak. However, businesses felt the impact earlier and acted quicker than governments did. While efforts to curb social interactions at a state or regional level can change public behaviour, not everyone will comply with the rules until there is a total shutdown.

About our data:
Suburbia partners with companies in the payments and retail industries to create data sets that track anonymized consumer purchases across Europe, delivering a daily view into some of the world’s biggest consumer brands. For insights on consumer packaged goods (CPG) trends, Suburbia’s data set covers sales in over 14,000 on-trade channels across six countries in Europe.

Fever-Tree: The European Thirst for Tonic

In the last ten years, gin has enjoyed a revival – it has even been dubbed the “ginaissance”. Premium tonic maker Fever-Tree has benefited strongly from this trend, growing rapidly along with sales of high-end gin. 

While Fever-Tree is the UK’s market leader for mixers, it has found its sales growth losing its fizz in its saturated home market. To live up to high growth expectations, it must look abroad, especially with looming risks of a post-Brexit consumer slump.

Growth of Fever-Tree in Europe

Analysts have suggested that it’s getting harder for Fever-Tree to grow its market share in the UK since it already dominates nearly half of the on-trade – the industry term for bars, restaurants and pubs.

On the bright side, continental Europe is the group’s second largest region in terms of revenue and sales are increasing in double digits every year (16% in 2019). There could be even more room for growth. According to Statista, eight out of 10 countries with the highest per capita consumption of gin are in Europe. Spain takes the top spot, Belgium is second while the Dutch, who helped to popularize gin, rank third. 

Looking into our CPG data*, which covers point-of-sale transactions in on-trade channels in Europe, we have indeed seen a strong surge in demand for Fever-Tree over the last two years. 

Perfect pairing

We also turned to our data to see which gins are most frequently paired with Fever-Tree tonic.

Unsurprisingly, it’s most frequently served with top-shelf gins like Hendrick’s, which arguably sparked the craft gin craze. 200-year-old Tanqueray and Bombay Sapphire are the second and third most popular brands drunk with Fever-Tree, respectively. Relatively young brands like Monkey 47 and Brockmans round up the list. No generic gins make the cut here! 

While Fever-Tree was the first mover in the premium mixer category, the competition is heating up as me-too brands start popping up. Now let’s see if it will continue to be the top brand on everyone’s lips at the bar this summer. 

About our data:
Suburbia partners with companies in the payments and retail industries to create data sets that track anonymized consumer purchases across Europe, delivering a daily view into some of the world’s biggest consumer brands. For insights on consumer packaged goods (CPG) trends, Suburbia’s data set covers sales in over 10,000 on-trade channels across six countries in Europe.