The story of Czech Plzeňský Prazdroj began in October 1842, when Josef Groll brewed the first batch of bottom-fermented lager. He used light barley, that was only partially malted, and none of the roasted or smoked barley that the German brewers were using whilst added generous portions of the fragrant Saaz hops to his brew. Thus he created a unique beer and a completely new category of beer (Pils, Pilsner), which has become the most popular type of beer in the world. Neither its recipe nor the brewing process has changed since it was first made.
Emerging Europe spoke to Paolo Lanzarotti, CEO of Plzeňský Prazdroj, about the company’s brands, its high-quality products and its business approach which recently resulted in the 2015 Deloitte Central European Sustainability Report Award for its sustainable development report.
The company has a very long tradition. How has it been competing over the years?
At Plzeňský Prazdroj we are proud to be among the biggest beer businesses in the Czech Republic and in Central Europe. We would not have been able to achieve this position, moving from a brewery that brewed beer for the city of Pilsen and its close surroundings only at the start of its existence in 1842, without the hard work and passion of our people. This is in addition to a strong focus on quality and respect for the legacy that has been handed down to us from the previous generations of master brewers.
Today, Plzeňský Prazdroj has more than 2,000 employees and many of its products are delighting consumers in various parts of the globe, thus spreading the good name of Czech beer worldwide. This helps increase interest in other Czech beer brands on international markets.
How do you see the future of the company and the entire market?
Well, the Czech beer market has changed more in the last couple of years than over the previous five decades, mainly due to a change in people’s lifestyle. In our industry, this change has been reflected in the shift from on-premises to home consumption. Now when consumers decide to go out for a beer they demand more value for their money. They want higher quality and an experience they will not get anywhere else. In addition, they are not afraid to experiment and want to explore new tastes.
For these reasons, it is Prazdroj’s long-term objective to support people looking for more opportunities in on-trade consumption, IN this way we will maintaining a key feature of the Czech beer culture – getting together over beer. To this end, we deliver training for pub staff, offer consultancy to pub owners as well as beer tank equipment for their outlets, participate in opening new concept restaurants and help enhance the pub environment and the services provided.
We have a strong investment pool and international expertise. Thanks to that, we are also able to develop new categories of drinks. We do not have to import them; instead we learn and draw inspiration from international markets and fine-tune our product locally, to suit the taste preferences of Czech consumers. By producing new products in the Czech Republic, we are supporting the local economy. Our manufacturing capacities and extensive distribution network allow us to offer consumers a varied choice of flavours and product variants, in sufficient quantity and of a top quality right across the country, and we are not limited to a particular region or season of the year.
Your brand is one of your biggest advantages. Is it easy to compete on the beer market, now?
Plzeňský Prazdroj aims to offer the market traditional beers as well as innovations, both in terms of product and packaging, all made to the highest-quality standard, in the long term.
We brew traditional Czech beer the way it should be brewed, without compromising quality. We use the finest Czech ingredients, prepare our own malt and yeast, follow the original recipes and refuse to use additives. That’s why our beer brands rightfully and proudly bear the Czech beer protected geographical etiquette.
As I said a moment ago, we respond to the changes in people’s tastes and habits on an ongoing basis, making efforts to satisfy their needs and to expand our portfolio of products. In recent years, there has been a significant change in consumers’ preferences – the market has seen new trends in consumption and brand-new drinks successfully establishing themselves.
We appreciate the deep roots of the Czech beer culture and traditions, which have been part of the Czech nation for long, since the National Revival period in the 18th-19th centuries, at least. We take this legacy even further – by making the environment of Czech pubs and restaurants more attractive for beer fans to get together; to enjoy the product and have a chat with friends, just as generations of consumers have done before them. To this end, we carefully explain to bartenders how they should pour the beer properly and take good care of it.
The beer is not only popular in the Czech Republic. How much of your production is sold abroad and where mainly?
Plzeňský Prazdroj is the biggest exporter of Czech beer, which is delivered to over fifty countries around the world. Our flagship brand, Pilsner Urquell, is the original Pilsner lager which has inspired a whole international category of beers, Nowadays, Pilsner-type lagers make up 70 per cent of all beers consumed worldwide.
Among the traditional export markets for Pilsner Urquell are Germany, Slovakia and the USA. In recent years, we have seen growing interest in the brand in Asia; it is doing very well in countries such as Japan, Vietnam and South Korea, where they organise the Pilsner Urquell Fest, a local equivalent of celebrating the anniversary of the first-ever brew of Pilsner lager. In Hanoi, Vietnam, they opened the first franchise restaurant for the brand – PUOR (Pilsner Urquell Original Restaurants) in Asia. In South Korea, people take great interest not only in Pilsner Urquell but also in Gambrinus, another of our beers. Currently, we are exploring opportunities in China as well as in India, which seems to be a very promising market for our Dark Kozel.
In recent years, we have successful exported record volumes; for example, in Pilsner Urquell volumes, we are approaching the 10 million hectolitres’ mark. More than two-thirds of the beer is exported in traditional glass bottles, but we have also been growing exports in kegs:– in 2015, keg volumes of Pilsner Urquell went up by 16 per cent year-on-year. There are thousands of places around the globe where you can treat yourself to Pilsner Urquell on tap.
At the same time, Pilsner lager, drawn from a tank, is gaining in popularity as this is the way to enjoy the beer in its freshest unpasteurised form. At the moment, there are over twenty ‘tank pubs’ abroad which offer Pilsner Urquell, most of them in Slovakia, Austria and the UK.
Czech beer and Pilsner Urquell are not something you really need to convince people to drink.
Like I said, we brew traditional Czech beer the way it should be, without compromising quality. Our beers are genuine Czech beers, made in local breweries by people who have a true passion for the product.
We provide our business partners and through them, our consumers, with authentic products which have a story worth telling. For example, the Plzeňský Prazdroj brewery is now one of the few places left in Europe where in-house coopers still make oak barrels and vats. The master brewers use these to make part of the Pilsner Urquell production in lager cellars in the same way our first master brewer, Josef Groll, did back in 1842. Thanks to our being able to constantly compare the taste of beer made in this manner with that produced using our modern equipment, our master brewers can guarantee fans of Pilsner lager that its original taste has been preserved.
Another story which encapsulates the reputation of our brands is Plzeňský Prazdroj’s contribution to maintaining the unique character of Czech beer, which is quite different from beers made abroad. We have close working ties with growers of Czech malting barley and hops, guaranteeing to take a certain volume of their crops, so that they are independent of a particular season’s yield and can keep on with their work, without which it would be impossible to brew truly Czech beer. We support researchers who cultivate hop and barley varieties that best suit the needs of Czech beer brewing.
Plženský Prazdroj has recently received the 2015 Deloitte Central European Sustainability Report Award. What advice would you give to companies planning to implement non-financial reporting in their organisation?
Sustainable development cannot be something else you do. It has to be at the heart of your strategy. And if it is at the heart of your strategy, then you will use it. If you’re not using it, it’s not important. If you are using it, it is, and I guess this is the acid test. Use it to engage with stakeholders, use it as part of everyday activity and remember to tailor it to the stakeholder group that you’re talking to.
Click here to read more about the beer producer and the brands Plzeňský Prazdroj has on offer.
(All photos — courtesy of Plzeňský Prazdroj)