How is German Beer made? And how it prevented innovation

In today’s Curiosity Sparks episode, we’re going to look at how beer (and German Beer in particular) is produced. And the interesting duality that developed between a focus on quality and it preventing innovation.

German breweries traditionally follow a set of principles called the “Reinheitsgebot”, which translates to “purity law”, and is this year coming up to its 500th anniversary. These rules dictate that  only four ingredients are allowed in beer: water, malt, hops and yeast.

The German Reinheitsgebot

While this has meant that German Beer is widely known the world over for its smooth taste and high quality, a lot of upstart breweries are sick and tired of the fact that it is so strict that it prevents them from innovating.

For example, Bavarian brewer Tilman Ludwig told Bloomberg that he is afraid that his new beer may be banned because it also includes flavours of ginger, peppermint, lemon and basil.

“There is a chance authorities will ban the sale, but that’s a risk I’m happy to take to make a statement,” says Ludwig, 31. “The Reinheitsgebot is not my enemy; I’m just in favor of more diversity and openness. I want the consumer to decide if a beer is good or bad, and not some public authority.”

And this isn’t just a matter of making different tasting beers. The Economist recently revealed that sales of beer in Germany are continually falling, especially following reunification, in favour of wine and other spirits. At reunification in 1990, annual beer consumption per head was 148 litres. By last year it had fallen to 106.

At the same time, the rest of the world is seeing an explosion in the craft beer market, where small breweries can experiment with flavours, styles, ingredients and marketing to reach new audiences. In fact, take a look at the number of craft breweries in the USA over the past three decades, as reported in Fortune.

So here is a clear example of where a government law designed to protect the public has stifled innovation. The fact that it is in an industry which is so synonymous with the country only makes it more ironic.

The Reinheitsgebot still holds a lot of support amongst the German population, so it’s not clear whether they will ever let market demand loosen the restrictions in order to allow innovation to flourish.

Perhaps there is a compromise somewhere in the future. The government knows that small breweries opening would create jobs and stimulate local economies, as well as showing off German ingenuity on the world stage again.

Until then, I’ll say Proßt and drink to that future.

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