Mr. Weber, breweries are among the most energy-intensive companies. Where is the peak demand?
We always start with a basic product: a malt drink. This is created by mixing barley malt or wheat malt with water. We heat that drink to extract the sugar, enzymes and flavor components from the malt. We add hops and yeast to the brew to brew beer. In our brewhouse we have to reach a certain boiling temperature at a certain point. This is exactly the most energy-intensive step.
Is there not also a lot of energy consumption by the production stages of cleaning and bottling?
That’s right. In the past, when there was only draught beer, that was not an issue from an energy point of view. Nowadays, with the many different forms of packaging, this is a challenge for us. But there is something else that drives me: How do I communicate to our team that we need to save on something that is supposedly abundant? How do I explain vividly how much energy is contained in a bottle of “Gründels Fresh”, and how much CO2 is emitted?
Why did you take personal control of the energy supply a few years ago?
That was and still is the idea and strategy of a green and self-sufficient brewery. I am firmly convinced that we must have economic independence and planning security. Fortunately, we can draw on internal expertise, thanks to which we can develop reliable energy solutions with a partner like STEAG New Energies.
Let’s move from production costs to revenues. In the past, a high proportion of draught beer guaranteed good yields. Is that still so today?
From the point of view of the pubs, barrels are still more popular. But if you include everything, i.e. tapping systems, cleaning and maintenance, the profit margin becomes narrower. For us, value creation increasingly comes from product innovations. Consumers also expect changes in beer that make them curious. That’s where we want to start. We always offer new products that add value for our customers. In that way, we can earn higher prices.
Karlsberg is withdrawing from the store brand business. You will have to explain to us in more detail why a company is deliberately shrinking.
For us, the classic volume business always has to do with reinvestment. Of course there are companies in our industry that make this very successful because they have concentrated on the issue and constructed highly efficient, highly automated beer factories on a greenfield site. The key question for us is, do we now invest more money in this sort of venture or not? The second important decision concerns expertise and the allocation of time and resources. The time I spend on being one of the best suppliers of store brands is then lost to the time I need to strengthen our brand and promote innovation. In this area of conflict, we as shareholders have decided to shut down brewing capacities and reduce the store brand business.
Christian Weber (40) is a graduate economist, is the fifth generation manager of the group and the father of two children.
In 1878, the Karlsberg Brewery was founded in Homburg, then in the region of Saarpfalz. Karlsberg Brauerei GmbH is one of the largest family-owned brewery groups among the almost 1,400 breweries in Germany.
„A certain distance makes it easier for us to see my family’s business not only as it is now, but also how it could be in the future.“
Does this concentration have to do with the limited financial resources of a family business?
You shouldn’t miss the opportunities of a good crisis! (Laughs.) If you look at the economic results of the last ten to 15 years with a clear head, you will see that we were not that successful. Of course, we have lived through many things, restructured processes, but we have rarely earned money. We had to fight hard at times. That leads to a greater willingness to make decisions and also to more courage.
Many family entrepreneurs act as patriarchs. Which management style do you prefer?
I am very grateful that people who joined us in recent years or have already been in the company have said: “OK, I’d really like to change something here. Just let me do it.” Even the idea of reducing the output didn’t come from me. Just as 99 percent of the things that happen here are not my idea. I’m just the one who looks at it again at the end and with luck makes the result even better with a few questions.
Your grandfather came up with the idea of canning beer and your father mixed beer with other drinks. What innovation will they associate with you at some point?
That’s a good question. There is this new management theory that I find exciting: Effectuation. This method is used above all in the development of business models in which reliable forecasts are not possible due to high uncertainty. The new business model is created in a continuous process through the exchange of ideas between people with different abilities who are pursuing the same goal and motivating each other. Any future innovation from Karlsberg will depend on who works for us. I see my function in bringing together the people who open up new prospects for us.
When did you first think of following in your father's footsteps?
I never really planned that. When I was 16, I left Homburg, from the small Saarland to faraway Scotland. Because here I was always “young Weber”. That’s not easy for a young man in a not exactly metropolitan environment.
Did you emigrate to free yourself from this environment?
There is something to that. In Scotland I first finished school and then studied economics. Many years after graduating, I finally landed at Nestlé. Today I am glad that until nine years ago I didn’t work in the company. A certain distance makes it easier to see my family’s business not just as it is today, but as it might one day be.
What made you come back?
My father did it very skillfully. He never asked or pushed me. At some point I came up with it myself. That started in 2008 and 2009. In 2010 I said, “Well, I’ll take a look at it and see if it fits.” I first went with my father for some time and simply listened. As a result, I got into projects. The rest happened very slowly. My father withdrew more and more. And then at some point I started to develop ideas with the various people as to what our future structure might look like.
What was that like when you came back? Didn’t the employees first look at you with skepticism?
That was certainly the case with many of them. In the meantime, however, it has become clear to most of them what I stand for, what I think is good and what is important to me. In the course of time, a team has now formed that wants to go this way with me. There are people who have been with Karlsberg for 30 years, and those who have only been there for two or three years. I try to delegate many things in order to deal more with future issues: What kind of company do we want to be, how do we want to and how should we deal with each other in the future?
Mr. Weber, thank you very much for talking to us.