Paulaner owner Florian Schörghuber in an interview: “The Oktoberfest accounts for less than 0.5 percent of our sales, but 50 percent of our brand”

Paulaner owner Florian Schörghuber talks about the appeal of the Oktoberfest, his billion-dollar bet on a Munich skyscraper - and explains why El Niño worries him.

Florian Schörghuber: Paulaner is number two in the can market behind Coca-Cola. Photo: PR/Julian Baumann

Munich. The voice is a little hoarse when Florian Schörghuber receives the Handelsblatt for an interview. That's no wonder: As the owner of the Paulaner brewery, the 31-year-old has spent many evenings at the Munich Oktoberfest over the past two weeks.

“The Oktoberfest accounts for less than 0.5 percent of our sales, but 50 percent of our brand,” says the head of the Munich Schörghuber Group. This year the Oktoberfest was a huge success: 6.7 million masses were sold in warm, sunny weather, as the festival management announced on Sunday.

However, according to Schörghuber, Paulaner is currently growing mainly with its mixed cola drink Spezi. His family business is widespread, and the business economist is taking the biggest risk in a completely different place: in the renovation of the Arabellahaus in Munich. Given rising interest rates and construction costs, the project could become a multi-billion dollar undertaking. Others would be extremely nervous because of this, Schörghuber speaks of being “maximally concentrated”.

Read the interview with Florian Schörghuber here:

Mr. Schörghuber, is Oktoberfest the last place that a brewery owner would really enjoy?

I wouldn't go that far. But it's nice to see how well things are going this year. There is a lot of drinking at the Oktoberfest and in the beer gardens. Of course that also depends on the weather.

How can you explain the fact that hundreds of thousands of people in Munich drink liters of beer every day - even though overall alcohol consumption is falling significantly?

People long for real, analog life. And they feel like switching off. Young people today may not drink as much as they used to. But they want to spend time in the beer tent, sing, party. This is not a Munich phenomenon. With our Fürstenberg brewery we traditionally attend the folk festival in Stuttgart, the Wasen. It's comparable there. These are just very important events for people. Tomorrow they might be back at their running community meeting.

Across Germany, one brewery after another is closing. Can the business still be saved?

Sure, the usual after-work beer is no longer available. At the weekend, however, the willingness to have a drink is still there. However, many people no longer always choose the traditional pilsner, but rather the light beer and more often the wheat beer. Then you drink something special.

In any case, beer consumption in Germany has been falling continuously for many years.

That's right, this structural change has been observed for 30 years. We reacted early and also relied on non-alcoholic beers and drinks. We benefit from this today.

How do you feel about it? Do you only drink alcohol-free?

I'm traditional. I drink water and beer.

Florian Schörghuber

Florian Schörghuber, 31, is the third child of Alexandra and Stefan Schörghuber. The business economist has been head of the family-owned Schörghuber Group for two years. Previously, he was co-CEO with a non-family manager for two years. Father Stefan Schörghuber died in 2008 at the age of just 48.

The Schörghuber Group belongs to Alexandra Schörghuber and her children. The family business consists of several areas.

Drinks: These include breweries such as Paulaner, Fürstenberg, Kulmbacher and Hoepfner.

Real estate: Bayerische Hausbau Development is a project developer of residential and commercial real estate, particularly active in Munich. The sister company Bayerische Hausbau Real Estate is responsible for a real estate portfolio worth around 3.5 billion euros.

Hotels: Arabella Hospitality owns and operates hotels in Germany, Austria, Switzerland and Spain.

Fish: Productos del Mar Ventisqueros is a salmon farm in Chile that produces around 55,000 tons of fish annually.

The company, founded in 1954, says it has around 6,700 employees. Sales rose slightly last year to a good 1.7 billion euros.

Its largest brewery, Paulaner, is bucking the industry-wide downward trend.

That's right, we are in the fortunate situation that we are one of the few brewing groups that are growing not only in Germany, but also in Europe and worldwide. We have increased sales by 40 percent since 2022 - precisely because we successfully transformed a classic brewery group into a beverage provider. This year we are also making double-digit growth.

Service in the Paulaner beer tent at the Oktoberfest: double-digit increase this year. Photo: Getty Images

So you're sticking with the beer business?

Beer and drinks are part of our DNA. I'm just thrilled: I love this business. You come into contact with people. You have to be more creative, but you can do business successfully. And we do that. That's why Paulaner is part of the group and will remain part of the group.

Paulaner is also growing, but less with beer than with the cola mixed drink Spezi. What is behind the success?

Paulaner Spezi also creates the sense of community that I just spoke about. The brand stands for joy of life, openness, customs, it is authentic. We are growing by 20 percent with Spezi this year. Our market share is 50 percent. Every third household in Germany now drinks a Paulaner product. With all categories and brands, the Paulaner Group is now the largest among the German brewery groups.

But where does Spezi's leap come from?

We are increasingly dropping off outside of Munich, where Spezi has had a cult following for decades. Berlin, Hamburg, Düsseldorf, Frankfurt – the German metropolitan areas are now the main sales markets alongside Munich. This year we also started selling internationally.

Aren't you afraid that Spezi will crash like bubble tea once did? After a hype in the early 2010s, the drink, which was popular among young people, fell into decline.

You never know, but for us it's something different. We see Paulaner Spezi not just as a brand, but as a kind of movement, a community. There are many Paulaner specialty events throughout the country. We organize some of them ourselves, but most of them are initiated by Spezi fans or consumers. But I'm really proud of our success at Paulaner Cola.

Spezi from Paulaner: Very popular with customers. Photo: IMAGO/Ulrich Wagner

You have to explain that!

Within six months of launching, we rose to second place in the German can market with our Paulaner Cola. This is the most successful beverage innovation we have ever brought to market. I assume that it is one of the most successful that Germany has ever had. Of course, Coca-Cola is a powerhouse. But the fact that we managed to overtake Pepsi in the growing can segment is incredible.

Want to buy more breweries?

When we look at breweries in Germany, the point is that we need additional bottling capacity. We can't produce Paulaner Spezi entirely in Munich and then drive it around the country. But I assure you: Our Munich beer will of course continue to be produced in Munich.

Even if it is sold in Chile?

Even then. Because in the end we sell the Munich attitude to life. Oktoberfest accounts for less than 0.5 percent of our sales, but 50 percent of our brand. This is our tradition, this is our history and also a reason why we are growing massively. Internationally, there is a double-digit increase again this year. There are few breweries that can do this globally. But that doesn't mean we don't brew abroad.

Tsingtao: Paulaner works with the Chinese brewery. Photo: AP Photo/Ng Han Guan

Where are you active?

In China, together with Tsingtao, we brew a beer specially developed for the People's Republic. China is our fastest growing market with an increase of 24 percent last year. In 2026 we will sell more than half a million hectoliters there.

You are also relying on your hometown of Munich in another area: with the spectacular renovation of the legendary Arabellahaus. Interest rates are rising, as are construction costs. Doesn't that make you uneasy?

We are talking about one of the largest single construction projects in Munich, and probably in all of Germany. I admit: we are maximally concentrated.

Especially since her schedule is sporty.

Exactly, we will start the renovation in 2030 and want to finish it in 2034. We will finance the project heavily from our own resources.

Illustration of the Arabellahaus: There are new plans for the building. Photo: Bayerische Hausbau Real Estate

An ambitious schedule in these times! How much will it all cost?

I can't give you a number yet. But we are probably getting very close to the big one.

You mean a billion euros. That's pretty brave.

Clear. Paulaner is an incredible growth story. But real estate is still our largest and therefore most important business area in terms of capital allocation. So of course I'm worried about the high construction costs and the rise in interest rates at the moment.

There is too little building going on in Germany, not just in Munich.

In the best case scenario, construction costs will stabilize, but we don't see any improvement. Given the high inflation, there will be little change in interest rates.

They own some of the most expensive real estate in Munich. That shouldn't affect you much.

Yes, we own many buildings in downtown Munich. But here, too, it's about not just resting on our laurels, but rather rethinking things. In other words, to create worlds of experience away from classic retail. But there will always be tenants for the A locations in the big cities and therefore good business. But we also face challenges in not so good situations.

As one of the few project developers, you have just started building apartments in Munich on a large scale.

We are building 165 apartments in the Feldmoching district of Munich, together with another project developer and, above all, with the city of Munich. It is a place that is attractive in terms of the price per square meter, i.e. the apartments are affordable. That's why we believe we can be successful there.

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How do you determine this?

We have been marketing the apartments since the beginning of the year and have already sold around 40 percent.

The 165 units are better than nothing, but they don't solve the housing crisis in Germany's most expensive city.

This is now the first phase of construction, and that's where we're getting started. Then we will consider how to proceed from there. A total of 1,600 apartments are being built at Lerchenauer Feld.

New residential district in Munich: “We are the largest private developer in the city.” Photo: Bavarian Hausbau Development

The new mayor of Munich, Dominik Krause, spoke of 55,000 apartments that are needed in Munich.

We have 2,400 apartments in our Bayerische Hausbau pipeline in Munich, making us the largest private developer in the city. In this way we are trying to make a contribution. But clearly, that's not enough.

What is slowing down housing construction in Germany the most?

The main problem is the enormous regulation and the long approval procedures. We often talk about a project duration of eight to ten years. This is why many people end up failing. Our advantage is that our properties are generally equity-financed. But that is not the normal business model. Most people have to present this with debt capital. At current interest rates, that simply doesn't work.

Other project developers are in serious trouble. Why do you keep building?

Project development is a high-risk business. If the construction costs of a project increase by ten percent, the margin quickly disappears. But someone has to build it! This is the only way to reduce the high rents that many people suffer from.

So they are also sticking with the real estate business.

Of course! Building and brewing is our DNA.

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And eat fish? Her seafood company Ventisqueros in Chile is a completely different business. Why are you continuing this?

It's the exotic one in our portfolio, but the market is growing. Salmon consumption is increasing internationally by around two to three percent per year. Many people turn to sustainable protein, especially salmon. However, the business is volatile. El Niño and other marine biology challenges are having an impact.

What does El Niño do to salmon?

It's about heat and oxygen levels. When it gets warmer, the fish eat less. If they eat less, they won't grow as big as planned. Then we have less volume to sell. In a commodity business, you see this in both sales and earnings.

Not a business you can rely on.

We have good and bad years. But: Even the bad years in Chile are now profitable, the result of our fundamental restructuring and modernization of our business. In good years we achieve an operating return of 16 to 18 percent.

Salmon: Fish farming in Chile is suffering from El Niño. Photo: Marcus Brandt/dpa

So you're keeping this division too?

We enjoy our business in Chile enormously. With its main sales markets in Asia and America, it also diversifies us geographically. But, as has often been said, there is no permanent guarantee of existence.

How would you describe your role? Would it work without you?

Operationally, there are 6,700 pairs of shoulders who make sure everything runs in the right direction every day. But it's not just me, my mother and my sisters are also present in the group's companies. We see this as a responsibility. A responsibility that is great fun.

Mr. Schörghuber, thank you very much for the interview.