Germany: Radeberger Group sells Bionade and Ti brands

Radeberger Group, producing some 13.1 million hectoliters of beverages a year and with a market share of around 15% the largest brewing group in Germany, has sold its ecological lemonade Bionade as well as its refreshing teaTi to Hassia Mineralquellen, one of the leading and still family-owned producers of non-alcoholic beverages in Germany.

Hassia will take over the Bionade marketing rights as well as the production company and its staff of 79 people in the Bavarian town of Ostheim vor der Rhön. In addition, Hassia buys from Radeberger the brand rights of Ti, a softdrink made from tea but with less sugar than common ice teas. Production of Ti, which is produced by Radeberger since 2013, will be relocated from Radeberger’s site in the Allgäu region of Southern Germany to Rapp’sKelterei in Karben, a subsidiary of Hassia specialized in fruit juice and cider.

Radeberger explains the sale in a press statement in a stronger focus on its core business beer. "In times of digital upheaval of our markets, all companies are required to review their position: We think in emerging ecosystems and develop new solutions. That is why we are focusing our portfolio on the core business of beer in order to be able to deal even more intensively with these future issues, " said Dr. Niels Lorenz, spokesman of the management board of the Radeberger Group.

Bionade, is an organic fermented, carbonated and naturally flavored beverage, which was invented by Dieter Leipold, a master brewer at Privatbrauerei Peter in Ostheim, who had married a daughter of the brewery’s owners. He isolated a strain of bacteria capable of converting the sugar that normally becomes alcohol into nonalcoholic gluconic acid, which he used to ferment the new drink.

In 1994 the unique production process was patented and one year later, in 1995, Bionade went on sale, at first in health resorts and fitness centers. It was picked up in 1998 by Hamburg's largest beverage distributor, Göttsche, but was not reaching a broad public. After a redesign of the package and a grassroots campaign, which involved selling Bionade in stylish bars, clubs and restaurants, sales of Bionade skyrocketed.

Meanwhile, the unbridled growth diminished the capital of the company and drove it to the brink of insolvency.  In 2004, an offer by Coca-Cola to buy the rights to the drink and the Bionade brand was declined. Instead Egon-Schindel-Group, a local mineral water company known for its brand Rhön-Sprudel, granted a credit of 380.000 € and was given 51% of Bionade GmbH, which held the marketing rights of Bionade. The new majority owner also helped with its own distribution network to push sales.

 In 2006 sales of Bionade were expanded outside of Germany and soon the product was available in several countries throughout Europe. In 2007, Bionade started its first advertising campaign, using the slogan "Bionade. The official beverage of a better world", which appealed to people with its David-versus-Goliath image. The product reached the same year an all-time peak of 200,000 bottels.

In order to differentiate from the many imitating products, which flooded the market following the success of Bionade, the company raised prices in 2008 by 33% and lost in the same year 20% of its volume sales. Peter Kowalsky, son of inventor Dieter Leipold, who held with his family at that time still 100% of the production company Bionade Deutschland GmbH, blamed his partner Egon-Schindel-Group for the unsuccessful price increase.

In 2009, Egon-Schindel-Group sold its 51% share for an estimated price of about €30 million to the Radeberger Group, the beer and non-alcoholic beverages division of German family owned Oetker Group. Later Radeberger managed to increase its participation to 70% and in 2012 finally bought the family totally out of the company.

Besides all, Radeberger never managed to capitalise on past successes with Bionade, which made the sale of the brand the best option.

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