Berentzen Juices

One Schnapps, Hold the Alcohol

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Mine's a Berentzen.
  • Why it matters

    Why it matters

    Berentzen, a German schnapps maker, was hit hard by the 1990s rise of alcohol-laden pops but is refocusing on non-alcoholic drinks to turn around its business.

  • Facts

    Facts

    • Founded more than 250 years ago, Berentzen became one of Germany’s most famous schnapps makers.
    • After peaking in the early 1990s, the company saw its sales erode and its share price decline by 90 percent.
    • In 2014, Berentzen returned to profit for the first time in three years, on revenues of €75.6 million ($83.6 million).
  • Audio

    Audio

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A few years ago, the liquor company Berentzen – one of Germany’s biggest and best-known schnapps producers – was suffering from a nasty hangover.

During the 1990s, its alcoholic beverages were a must at parties.

But in 2008, the celebration of Berentzen’s 250th anniversary was canceled because the dismal balance sheet showing €11 million ($12.1 million) in losses offered no reason to rejoice.

Since then, the company, based in Emsland in northern Germany, has gone through a far-reaching transformation, evolving from distillery to juice producer.

It was a painful step. The story of the company’s founding, shrouded in legend and myth, was always rooted in alcohol.

In the mid-18th century, Johann Bernhard Berentzen operated a small distillery, selling products with names such as “Kloar” or “Strohgelb” to thirsty customers. The schnapps business flourished, and in 1898 the company registered one of the first German liquors to be branded, “Berenzten from the Barrel.”

Some 70 years later, Berentzen won the Pepsi-Cola franchise for Germany. It was a new source of revenue, but alcoholic beverages remained the firm’s focus.

But that changed in 1976 when brothers Friedrich and Hans Berentzen decided to mix things up a little. They took the revolutionary step of mixing schnapps with apple juice, creating “Berentzen Apple,” a tipple that became popular world-wide, especially in Britain, the U.S. and Japan.

Through its subsidiary Citrocasa, the company now sells its "Fantastic" juicemaking packages to stores, which include a juicer and a year's supply of fresh oranges for up to €10,000.

As the number of products and markets grew, there was a similar upturn in the balance sheet. The 1990s became the golden era of the company, and in 1994, seeking additional capital for growth, the Berentzen brothers went public.

Then came the crash.

The liquor market in Germany stagnated. Other products flooded onto the the market: Campari-Red Bull or Bacardi-Bionade were now the drink of choice among the young and trendy.

Apple schnapps disappeared almost completely. Berentzen responded to the assault by turning to the production of non-branded products for cheap discounters and, in the process, destroyed its own business. The Berentzen share price lost more than 90 percent of its value compared to its all-time high.

In 2007, the company produced 67.7 million bottles of cheap mixes while its highly profitable in-house brands were pushed aside, forcing company management to break with age-old family traditions. The owners sold off about 75 percent of the common stock and withdrew from the firm.

Only then did restructuring begin as Munich-based financial investor Aurelius placed Stefan Blaschak, whose experience was in the cheese industry, at the head of the management board.

He ordered a tough austerity program to reassert the company’s presence in the hotly contested liquor market, shedding 142 employees, slimming down the administrative staff and eliminating loss-making products. These moves saved €17 million and the remaining 487 employees helped return the company to profitability.

Berentzen also began a search for new sources of revenue abroad. The German market was stagnant with less than six liters of schnapps consumed per person per year. In 2012, Frank Schübel took over as chief executive and continued on the course set by his predecessor, extending Berentzen’s products to China, Austria and the Netherlands. In Turkey alone, sales increased by 37 percent in 2014.

 

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Frank Schübel has been popping up at the bar at Berentzen since 2012. Source: DPA

 

The plans seem to be working. In 2014, the company was in the black for the first time in three years, and the first six months of 2015 are giving reason for optimism, too. Revenues climbed 3.3 percent to €75.6 million year-on-year, and operating results were up from €1 million to €2.5 million. Net profit dropped by more than half to €1.2 million, however.

The firm is hoping that its new non-alcoholic ranges will help to turn that situation around. Through its subsidiary Citrocasa, the company now sells its “Fantastic” juicemaking packages to stores, which include a juicer and a year’s supply of fresh oranges for up to €10,000.

Customers squeeze the fresh juice themselves, and Berentzen is betting there is great growth potential in this area because the trend is toward fresh, untreated foods.

The glorious old times of “32% alcohol by volume” seem to be long gone. The people at Berentzen are certain of that.


Video: Berentzen wishes it could still party like it was 1992.

 

This article originally appeared in the newspaper Der Tagesspiegel. To contact the author: redaktion@tagesspiegel.de

 

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