er Braugruppe

GmbH

Römermauer 3 brewer, founded a brewery in Bitburg, a German city

Bitburg, D-54634 about 15 miles north of Trier near the Luxembourg
Germany border. When Wallenborn died in 1839, his widow
Telephone: (49) 6561 14 0 Anna Katharina took over the family business. Three
Fax: (49) 6561 14 2289 years later her daughter Elisabeth married Ludwig Ber-
Web site: http://www.bitburger-braugruppe.de trand Simon from Kyllburg, Eifel, where his uncle ran a
brewery. 1 he young entrepreneur took over the manage-
ment of the Wallenborns’ brewery in Bitburg while
Private Company
Elisabeth Wallenborn ran the Inn “Zum Simonbräu,
Incorporated: 1907 as Theobald Simon, Simonbräu, Bay-
erische Lagerbierbrauerei Bitburg oHG opened in 1842, where a large part of its output was
Employees: 1,800 (2008) sold to the locals. Ludwig Bertrand Simon died in 1869,
Sales: EUR 777 million ($1.1 billion) (2008) and his 29-year-old son Theobald Simon took over the
NAICS: 312120 Breweries family business in 1876. Putting to use the considerable
estate his father left, the brewery’s output grew 10-fold
within 14 years under his management.

There were two main reasons for the success of the

young brewer, who had received a thorough education
With an annual output of roughly 7.4 million hectoli-
ters in 2008, Bitburger Braugruppe GmbH is one of in his craft and studied modern brewing technologies in
several other breweries and even in other countries, and
Germany’s largest brewery groups. The group’s
premium beer brands include König Pilsener, Bitburger, who possessed a business acumen and took the necessary
Wernesgrüner, Köstritzer, and Liehet. Bitburger risks to move ahead of the competition.
Braugruppe also manufactures mixed beer-and-soda-pop The first critical success factor was the decision to
drinks under the Bit brand and the non-alcoholic malt brew in Bitburg a new kind of beer, pilsner, which was
beverage Kandi Malz. Headquartered in Bitburg, Bit- first brewed in the Bohemian city Plzen in 1842. Unlike
bürger Braugruppe exports its products to more than 55 the common top-fermented beer which was dark and
countries. The company is controlled by descendants of cloudy, Pilsner was a bottom-fermented clear beer with a
the founding family. golden yellow color that was brewed using different
kinds of malt, hops, and slow acting yeast cultures. This
THREE GENERATIONS BUILD produced a tasty beer of much better quality and with a
FAMILY BREWERY longer shelf life.

The origins of Bitburger Braugruppe go back to the year The second main reason for Simonbrau ’s success
1817 when Johann Peter Wallenborn, the son of a was its massive investment in state-of-the-art

54 INTERNATIONA! DIRECTORY OF COMPANY HISTORIES, VOLUME 110

 Bitburger Braugruppe GmbH

to lager beers, such as the dark Bavarian lager and the

lighter Viennese lager, When the construction of a
COMPANY PERSPECTIVES brand-new brewing house was finished in 1890, the
brewery launched a light and a dark beer under the
Since January 1, 2007 the strong premium brands Bit- name Simonbräu.
burger, König Pilsener, Köstritzer, Wernesgrüner and In February 1909 the brewery introduced its new
Licher have been operating in the German beer brand, Original-Simonbräu-Deutsch-Pilsener. Io com-
market together under the umbrella of Bitburger municate the new product launch, the company'
Braugruppe GmbH. The new organization invested in a massive print advertising campaign that
concentrates its forces in the premium segment and featured the coat of arms of both the city of Bitburg and
the brewery, as well as the new brand name in a distinc-
thereby constitutes a group of strong brands unique in
tive lettering. In addition to newspaper ads and beer
Germany.
coasters, the company printed these elements on
custom-designed beer glasses and pitchers, l ater the
company' began to attach the labels to its beer bottles.
technologies. In order to brew the bottom-fermented When the Simonbräu brewery began to quote labora-
Pilsner beer, an “artificial cellar” was built in 1879 to tory' tests claiming in its advertising that their German
keep the temperature at the necessary low level of Pilsener could easily' compete with the original drink
between four and nine degrees Celsius and to create the from Bohemia, the breweries in Plzen sued the company
additional storage space needed for the longer fermenta- in 1911 for using the word Pilsener in its brand name
tion process. I he cellar consisted of two storage cellars, although the beer was not brewed in their city. Two
a fermentation cellar, and an ice chamber in between. years later the case was settled in favor of Simonbräu.
Some 600 cubic meters of ice were harvested in the
wintertime from the surrounding bodies of water and
MODERNIZATION EFFO RTS
stored in the cellar.
In 1883 the first batch of Pilsner beer was brewed By the turn of the 20th century, with an annual output
in Bitburg. In the first year afterward, Simonbrau’s sales of over 10,000 hectoliters of beer, Simonbräu had
almost doubled. Later in the decade Simon invested in become one of the region’s largest and most modern
state-of-the-art brewing equipment, quadrupled storage breweries. In 1900 Simon’s son Josef joined the family
space, secured the necessary water supplies, and installed business; his brother Bertrand followed in 1904. Both
a steam engine to power machinery and pumps. In the brothers had received degrees in brewing technology, Jo-
late 1890s the company set up a steam engine-powered sef in Munich and his younger brother in Berlin. In
ammonia-based cooling system that produced the 1907 they became partners in the family' business, which
desired temperatures year round and up to 220 pounds was transformed into a general partnership and renamed
of ice in a day. Theobald Simon, Simonbräu, Bayerische Lagerbier-
brauerei Bitburg oHG.

EXPANDING DISTRIBUTION AND Modernization continued with the installation of

PRODUCT RANGE the brewery’s first deep well to secure its growing need
for suitable water. From 1909 on, a steam engine driven
Early on, Theobald Simon began to extend his brewery’s
motor pumped about 20 cubic meters of water per hour
reach bey'ond the Bitburg region. After a railway con-
from a depth of 100 meters. When Bitburg was finally
nection between Cologne and Trier had been established
connected to the German railroad network in 1910, the
in the early 1870s, Simon began in 1876 to ship his
company' purchased its first railway wagon for long
beer to the Rhineland. The first export from Bitburg
distance shipping. In 1911 the company began to
was shipped to nearby Echternach in Luxembourg
replace the old wooden storage kegs with steel-enameled
where a sales office was established in 1886. Simon-
ones. Three years later the brewery' bought its first truck
bräu s first domestic sales subsidiary was set up in Trier
for shipping its beer varieties in barrels to the nearby
three years later, and Trier became an important regional
sales offices in Trier, Blankenheim, and Saarbrücken.
market for the brewery. In 1893 Simon shipped a batch
of 16,000 liters of beer from Bitburg to the United The beginning of World War 1 in 1914 suddenly
States where the World Exhibition was being held in interrupted Simonbräu s healthy growth. I he brand-new
Chicago. In the meantime the brewery had also truck was confiscated and 10 of the brewery’s 25 work-
expanded its product range. After the artificial cellar was ers as well as |osef and Bertrand Simon were drafted
built in Bitburg, the brewery expanded its product range into the military'. 1 he use of barley and malt for brewing

INTERNATIONA! DIRECTORY OF COMPANY HISTORIES. VOLUME 110 55

Bitburger Braugruppe GmbH

After their father s death in 1924, Josef and Ber-

trand Simon became the brewery’s co-owners. In 1928
KEY DATES Bertrand developed a technology that used metal chip-
ping instead of wooden chipping for the clarification
process of the beer, for which he received a German
1817: Johann Peter Wallenborn sets tip a brewery in
patent. Metal was not only easier to sterilize, but it also
Bitburg.
filtered out more clouding particles.
1909: Original-Simonbräu-Deutsch-Pilsener brand is
launched. In the meantime Simonbräu intensified its efforts to
1973: The brewery’s annual production exceeds one win new customers and to expand distribution. In 1927
the first traveling salesman was hired. In the late 1920s
million hectoliters for the first time.
and early 19.30s additional sales offices were established
1991: Bitburger Brauerei rakes over dark beer
in large German cities, such as Berlin, Frankfurt am
brewery Köstritzer Schwarzbierbrauerei.
Main, Hamburg, and Bremen. To have better control
1992: Bitburger Light and the non-alcoholic Bit-
over the dispatching of bottled product, Simonbräu
burger Drive are introduced.
filled all of its bottles in-house from 1931 on.
2002: Bitburger Brauerei takes over the branded
pilsner brewer Wernesgriiner. In the 1930s the brewery purchased additional
2004: The company acquires the premium pilsner railway wagons and continued to expand its network of
breweries König-Brauerei and Licher. sales offices. Due to burgeoning demand, the brewery
reached the limits of its capacity in the mid-1930s.
However, the Nazis’ increasingly strict restrictions on
civil production made the necessary construction of ad-
beer was increasingly restricted. While one-fifth of the
ditional cellar space impossible. Therefore, the company
brewery’s output had to be reserved for the army, Simo-
stopped taking on new customers and began to buy beer
nbräu ’s other customers received only three-quarters of
from other breweries to fill their existing clientele’s
what they ordered. Some of them did not return the
orders. By 1938 the brewery put out over 100,000 hec-
barrels to the brewery which were needed there to ship
toliters of beer, 60 percent of it being shipped away to
new' product. In 1917 the brewery had to provide 11
other parts of the country.
large copper tanks for military production and replace
them with iron tanks. As the malt ration was cut to a
bare minimum, the brewery began to produce a low- MANAGING THE SURGE IN
quality “thin beer. To generate additional sales the DEMAND DURING WAR
company began to produce bottled soda pop as well as
In the second half of the 1930s Bertrand Simon’s sons
dried beets, potatoes, and leafs, which were sold as
Theobald, a business school graduate, Hanns, a brewer
animal feed. With 12 of the company’s employees
and chemist, and Bert, an agricultural engineer and
becoming war casualties, the war took a heavy toll on
brewer, joined the family business. When World War II
Simonbräu. In September 1919 the brewery started
began in 1939, Hanns and Bert, together with 63 Simo-
producing Pilsner again.
nbräu workers, were drafted into the military while
Theobald together with his uncle Josef mana ged the
ENSURING HIGH QUALITY AND brewery, which experienced another surge in demand.
EXPANDING DISTRIBUTION
To satisfy the beer thirst of the thousands of work-
After the end of World War I, Josef and Bertrand Simon ers who built, and the soldiers that were stationed at,
steered the family enterprise through another crisis the Westwall, Adolf Hitler's gigantic defense installation,
period. Despite the postwar economic depression which along Germany’s western border from Strasbourg to
resulted in staggering inflation, the two brothers focused Arnheim, which had to be supplied first, Simonbräu had
their vision on significantly expanding distribution and to stop deliveries to its regional offices and to continue
exports. I hey put a high priority on producing a beer of purchasing significant amounts of beer from other
outstanding quality using the best possible quality raw breweries until the troops were withdrawn in mid-1940.
materials. Io ensure this high standard and to achieve As the war progressed, beer consumption decreased
the much longer shelf life, which was necessary to ship steadily as many bars and restaurants were destroyed,
the beer over long distances, they invested 175,000 re- and people preferred to stay at home where they felt the
ichsmark, an enormous sum at the time, in a state-of- safest. At the same time, raw materials became scarce
the-art laboratory in 1921 to test the product at every again, trucks and precious metals were confiscated, and
stage of the brewing process. transportation was more and more limited. In 1944

56 INTERNATIONAL DIRECTORY OF COMPANY HISTORIES, VOLUME 110

 Bitburger Braugruppe GmbH

many of the brewery’s buildings were heavily damaged New filling lines for barrels and bottles, a distribution
or completely destroyed by bombs. center and additional brewing, and storage facilities were
built at the brewery's second location. In 1990 Bit
burger Brauerei’s output exceeded three million hectoli-
FOUR DECADES OF MASSIVE
ters for the first time
EXPANSION

After the war ended in 1945 the brewery started

producing a thinned-down beer again, due to SUCCESSFUL MARKETING AND
continued shortages in raw materials. In 1947 Josef Si- NEW PRODUCTS
mon died. Iwo years later production was back to
1 he fact that by the 1990s Bitburger Brauerei had
normal, and Bitburger began to put out its usual variety
become one of Germany’s largest family breweries was
of products. With the beginning of the 1950s the
to a large degree the result of the company’s sustained
company entered a prolonged period of massive growth,
marketing efforts. Since its introduction in 1951, the
characterized by an almost constant expansion and
modernization of its production facilities. catchy slogan Bate etn Bit (A Bit, Please) became very
popular among German beer drinkers, publicized
In 1951 the brewery installed a new bottling extensively in print media and on television. At the
machine for 3,000 beer bottles per hour. At that time, beginning of the 1970s the Bitburger Brauerei’s manage-
Bitburger Brauerei was selling about two million bottles
ment made the strategic decision to focus solely on the
of beer per year. Iwo years later bottled beer sales had
brewery’s premium product. For the next 20 years the
more than tripled. In 1957 the company invested in an
brewery put out only one brand product: Bitburger
even larger bottling plant with a capacity of 20,000 beer
Pilsener, or Bitburger Pils for short. However, when
bottles per hour. A new' cold-sterile bottling technology
consumers’ tastes began to change in the 1990s Bit-
produced a beer with an even longer shelf life and with
burger Brauerei introduced two more products under
a more stable head. One year after the death of Bertrand
the Bitburger brand name: Bitburger Light and the non-
Simon in 1958, a new brewing house was built, fol-
alcoholic Bitburger Drive.
lowed by a large lager hall in 1962. In 1967, the
Company s 150th anniversary year, Bitburger Brauerei The launch of Bitburger Drive marked the begin-
put out over 400,000 hectoliters of beer. ning of a very successful sports sponsoring strategy the
Massive investments in additional production brewery began to pursue in the 1990s. In 1992 Bit-
capacity continued in the 1970s. Between 1953 and burger Brauerei became the exclusive supplier of non-
1971 the company drilled three additional deep wells to alcoholic beer to the German national soccer team. The
secure rhe constantly rising need for water. In 1973 the German team’s winning of the European soccer
brewery’s annual production exceeded one million hec- championship four years later was the first highlight in a
toliters for the first time. To keep up with rapidly rising series of soccer events which helped to significantly
demand Bitburger Brauerei decided to open a second increase Bitburger Brauerei’s sales. A second highlight
production facility in Bitburg where a bottling plant followed 10 years later when Bitburger became a sup-
with an hourly capacity of 60,000 bottles was put in plier and sponsor of the live television broadcasts at the
operation in 1974. Four years later a second bottling Confederations Cup and the soccer World Champion-
line started operations to which unfiltered beer was ship in 2006.
transported over 2.7 kilometers from the brewery ’s other
In addition to its sponsoring activities in soccer, the
location via a 1.60 meters underground pipeline.
brewery also sponsored Benetton’s Formula One team
In 1975 the sixth generation took over the manage- and its 1994 world champion Michael Schumacher for a
ment of the family enterprise. Bert Simon’s son Axel number of years. In 2000 Bitburger Brauerei became an
became technical director; Hanns Simon’s son-in-law official sponsor of the German Olympic team. In 2005
Michael Dietzsch became director of marketing and Bitburger Brauerei launched Bit, a new brand for in-
sales; Theobald Simon’s son-in-law Thomas Niewodnic- novative products which could attract more, in
zanski became director of personnel and finances. I he particular younger, target groups. Ehe first product
new executive management team continued on the path launched under the new brand was Bit SUN, a mild
to massive growth. Brewing, filling, and storage capacity beer, followed later by a line of mixed beer-and-soda-
was further expanded in the 1980s at both Bitburg pop drinks, including Bit PASSION. Bit COPA, and
locations. The considerable investment in state-of-the- Bit COLA LIBRE. During the first decade of the 2000s
art brewing technology allowed for the beer to ferment the brewery also overhauled and modernized its bottle
within two weeks and to mature in another four weeks. designs and its corporate design.

♦
INTERNATIONAL DIRECTORY OE COMPANY HISTORIES, VOLUME 110 57
Bitburger Braugruppe GmbH

ACQUISITIONS AND PRINCIPAL COMPETITORS

RESTRUCTURING
Anheuser-Busch InBev; Carlsberg A/S; Krombacher
The reunification of Germany in 1990 and the opening Brauerei Bernhard Schadeberg GmbH & Co. KG; Brau
of the Eastern European markets brought new op- Holding International GmbH & Co. KGaA; Karlsberg
portunities for further growth. In 1991 Bitburger Brauerei KG Weber; Radeberger Gruppe KG.
Brauerei took over Köstritzer Schwarzbierbrauerei, one
of Germany’s oldest breweries founded in 1543, in the
Eastern German state Thuringia. To separate the opera-
tive business of Bitburger Brauerei from the company’s EUR ! HER READING
other subsidiaries, the latter were organized under the
“Bud vs. Bit: World Cup Beer Battle Bottled Up,” Amusement
umbrella of the newly established management holding
Business, January 2005, p. 4.
Bitburger Getränke Verwaltungsgesellschaft in 1998.
Chronik der Bitburger Brauerei. Brautradition seit 1817, Bitburg,
Another major acquisition followed in 2002 when Germany: Bitburger Brauerei Th. Simon GmbH, 2003,
Bitburger Brauerei took over Wernesgrüner Brauerei, the
90 p.
third largest brewer of brand name pilsner in Eastern
“Court Blocks Anheuser in German Market,” Modern Brewery
Germany. However, the most important investment fol-
Age, May 7, 2001, p. 1.
lowed in 2004 when the company acquired König-
Brauerei, a major competitor based in Duisburg. In the “EU: Bitburger Loses Bud Trademark Appeal,” just-dnnks.com,
same year Bitburger Brauerei also bought the regional October 19, 2006.
beer brewer Liehet Brauerei located in Hesse. In 2007 Fondiller, David, “Germany," Forbes, July 18, 1994, p. 199.
the German premium beer brands Bitburger, König “Foreign Investment: Germany’s Bitburger Enters Vietnam s
Pilsener, Köstritzer, Wernesgrüner and Licher were Premium Beer Marker,” Vietnam News Briefs, August 21,
reorganized as Bitburger Braugruppe under the umbrella 2009.
of the Bitburger Holding. By then, the seventh family
“Germany: Bitburger Scores with World Cup Deal.’ just-drinks.
generation was in charge for leading one of Germany’s com, January 19, 2007.
largest brewery groups through an ongoing period of
“Germany: Bitburger Signs Brazil Deal,” just-drinks.com,
market consolidation in which Bitburger Braugruppe
October 18, 2006.
was intending to play an active role.
“Germany: Holsten Sale to Bitburger Approved,” just-drinks.
Evelyn Hauser com, June 22, 2004.
“Germany: Sluggish Economy Hits Bitburger Sales, just-drinks,
PRINCIPAL SUBSIDIARIES com, January 17, 2006.
König-Brauerei GmbH; Köstritzer Schwarzbierbrauerei Glaser, Gregg, “Bitte, ein bit: Bitburger Sells More Draft than
GmbH; Eicher Privatbrauerei Jhring-Melchior GmbH; Any Other German Brewer," Modern Brewery Age, January
Wernesgrüner Brauerei GmbH. 26, 2004, p.15.

58 INTERNATIONAL DIRECTORY OF COMPANY HISTORIES, VOLUME 110