Bars in Berlin

Generally speaking, Berlin publicans enjoy gross margins significantly ahead of Dublin with draught, for example, bringing in margins in the high 70%s or early 80%s.
Generally speaking, Berlin publicans enjoy gross margins significantly ahead of Dublin with draught, for example, bringing in margins in the high 70%s or early 80%s.

A 25-strong delegation of LVA Council members paid a visit to Berlin at the end of January to learn from the German on-trade operation. Drinks Industry Ireland reports.

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Off-trade

19 April 2013 | 0

25 LVA Council members flew into Berlin at the end of January at their own expense on a fact-finding mission to visit around 15 pubs there. They witnessed a mix of German pub businesses and from observing these they learned that in simple terms the Berlin on-trade can be broken down into three distinct category-types.

3 types of Berlin bar
The Dublin publicans visited three or four traditional Irish pubs doing “reasonable business on a similar scale to pubs in Dublin” according to LVA Chief Executive Donall O’Keeffe who was on the trip, “These were decent volume, well-run pubs,” he said.

The second category comprised traditional local German bars with a very small trade, very ornate, in older buildings with small square footage and a relatively small range of drinks. They also offered a reasonable if narrow food service.

“They were lovely little pubs but they were small,” reported Donall, “The beer range was limited to two or three on draught and a few bottled beers with a respectable enough wine range. No emphasis was placed on spirits in these cosy little old-fashioned businesses, much smaller than the traditional Irish pub.”

The third pub-type consisted of very modern, contemporary, minimalistic, cosmopolitan-style cocktail bars, wine- and spirits-led businesses with a good food offering dotted around the new Berlin city centre.

International-style businesses rather than German-style were entirely spirits-led, wine-focused, with no great interest in beer.
“They were for after-work drinks, for people having a casual drink or two before going out the door. They were not particularly large businesses.”

Overall, the Dublin visitors noted that it could sometimes be overlooked just how big the standard Dublin pub can be in terms of the scale of business compared to what the LVA party had witnessed in Berlin.

“With the population scale of Berlin, it can afford to have a narrower focus and a few bars had a distinct theme made possible by the sheer population density there,” added Donall.

Gross margins

Generally speaking, Berlin publicans enjoy gross margins significantly ahead of Dublin with draught, for example, bringing in margins in the high 70%s or early 80%s. Excise there is low too, while prices are similar to those operating in Dublin with a half-litre of beer costing around €4.50 to €5.00. Labour costs are also significantly lower.

Otherwise, the Irish pubs offer a broader range of product compared to that offered by German bars and cocktail bars there.
In some pubs, for example, the offering comprised no more than a Berliner pils with a clearly separate lager and possibly an ale-style beer. In others there may or may not have been a wheat beer available or a very local beer, he added.

Big beer brands didn’t dominate the scene as they do here. Berlin’s market is enormously fragmented with a huge number of breweries supplying, so there’s a very different structure to this beer market.

As a result, very few breweries deal direct with their customers. Everything comes via the wholesalers and distributors.

Berlin bar’s character
The bulk of the pubs are on long-term leases rather than owner-occupied and business is conducted in a very different style to the way it’s carried out in Dublin.

The food:drink ratio is 50:50, for example, where it’s more like 30:70 in Dublin.

Berlin enjoys a big late night culture and as a result the bars open much later since the bar owners are allowed to trade their own hours. This tends to result in a 1am close on weeknights and a 3 or 4am close at weekends.

Overall, Donall feels that a really good Dublin pub is far ahead of one in Berlin in terms of higher volumes, more customers, better structure, more investment in the physical building itself, better staffing and quicker service.

Generally speaking, Berlin publicans enjoy gross margins significantly ahead of Dublin with draught, for example, bringing in margins in the high 70%s or early 80%s.

Generally speaking, Berlin publicans enjoy gross margins significantly ahead of Dublin with draught, for example, bringing in margins in the high 70%s or early 80%s.



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