In 2019, BESTMALZ celebrates its 120th anniversary – what better opportunity to ask the boss to take a look at the company’s past, present and future! An interview with Dr. Axel Göhler, grandson of the founder of Palatia Malz GmbH.

Bestmalzblog: Dr. Göhler, what is your first childhood memory of your father’s and grandfather’s company?

Axel Göhler: My family has been making beer for six generations. My great-grandfather was Technical Director at a large brewery near Berlin. His son, my grandfather Max Göhler, moved from Berlin to the Rhine-Neckar region, where he acquired our main production site, a 50,000-ton-capacity malthouse in Kreimbach-Kaulbach, in the 1930s. Soon after the war, he got together with other German brewers and maltsters to promote home-grown, high-quality barley, because good barley has always been the basis for high-quality malt. By the way, back in those difficult times, bagged malt produced by our family’s company was first used to make malt coffee. Fifteen years after the end of the war, my father Eberhard joined the management team. The company moved out of its premises in Mannheim, which had been badly bombed, to Heidelberg, where our family also lived. As a result, although we children didn’t play among bags of malt, the company naturally was always a major presence in our lives. As long we went to school, for example, we worked in the laboratory or helped with shipping the goods in Kreimbach-Kaulbach to top up our pocket money. And my two brothers and I were often allowed to attend company anniversaries or Christmas parties.

Bestmalzblog: Was it clear from the beginning that you would take over the company’s management at some point and acquire a majority share in the company?

Axel Göhler: Not at all! My older brother Martin joined the company in the 1990s and was in sole charge after 2001 when my father retired. I had the urge to travel. I went to the USA to study, earned my doctorate degree in St. Gallen, and later on as a consultant in an American strategy consulting firm, I travelled a lot, too, before finally setting up my own investment boutique in Hamburg. But of course, I was always involved in the business as a shareholder and knew what was happening at the malthouse. It is probably no coincidence that I wrote my doctorate on family-owned breweries. When it came to making decisions on major investments, such as building our first fully automatic bagging plant in 2007/2008, it was naturally discussed among all shareholders. By the way, that was a key factor for our success today.

Bestmalzblog: Can you say a bit more about that?

Axel Göhler: Well, there’s a huge difference between selling malt in bulk – in silo trucks or containers – or as a branded product in bags. We are talking about two completely different businesses. Bulk malt naturally has to be top quality, too, but selling it in bags brings a whole lot of new hurdles: plenty of technical challenges, different system requirements, greater personnel requirements in logistics, to name just a few. As a result, when the craft beer trend spilled over from the USA with its demand for high-quality specialty malts, we had already created one of the conditions to be a player in this market.

Bestmalzblog: And what were the other conditions?

Axel Göhler: Craft beer is an international product, which means that as a malt producer we also had to be positioned internationally. Many only see the potential profit gains, but the devil is in the details. Trading internationally with a product manufactured completely with natural ingredients – due to the German purity law – is a complex matter and not without risk. There are currency issues to deal with, import regulations to observe, you have to build up an international dealer network, all while guaranteeing perfect quality. Those are things that are often underestimated. On the other hand, complexity also has a special appeal – if anyone could do it, you wouldn’t need Bestmalz! Last but not least, my international background certainly also had its advantages.

Bestmalzblog: So how come you took over the company’s management?

Axel Göhler: The considerable investments required to build up the craft malt business gave us some headaches for the first five years. The family shareholders put their heads together to work out how to capture potential more quickly. We considered rapidly expanding the export business to be a core competence. This suggested itself, as I had experience in international affairs from my time in Hamburg, where I – among other tasks – had looked after the consular affairs of the Kingdom of Jordan for ten years. So I joined the company for a year on an interim basis, before taking over at the helm from by brother Martin in early 2015. At the time, it was still not clear whether our strategy of developing specialty malts was the right one. But one thing was clear to me from the start: We had to make some fundamental changes.

Bestmalzblog: What were they?

Axel Göhler: First of all, I bought out a co-shareholder and streamlined the shareholder structure to speed up decisions. Today, we have just three family partners and clear majorities. It is often the case in family-run companies that ownership is spread over more shoulders when the next generation takes over, because the shares become more fragmented. That can mean decision-making is hard. Because I am the majority shareholder, it takes no time at all to make decisions and implement them. Secondly, we have adapted our brand identity to adapt the “BESTMALZ” brand better to international markets. On top of that, we have changed the corporate structure, merged several entities under company law, and created three independent organizational units. And finally, we have forged ahead with digitizing our processes to ensure that our business planning system also runs smoothly. Not to forget ongoing investments in the infrastructure for production, such as modernizing the germination lines, the steep tank, the cooling systems and the exhaust air systems.

Bestmalzblog: That sounds like a lot of work.

Axel Göhler: It certainly is! We have just completed our latest project and will be inaugurating our new warehouse and logistics center at our Wallertheim site to coincide with the anniversary celebrations. That was an important step too, because we are now producing well over a million bags a year – five years ago the figure was just 300,000. But I believe and hope that we will enter calmer waters now and have time to get used to the changes we have made in the company. The past years have been anything but dull. Looking back, the measures and major projects we have implemented since I joined were essential to keep our 120-year-old company in tune with the times. After all, our aspiration is to sell world-class malts worldwide. And if we really mean “world-class”, that has to permeate all areas: the product itself, the service we provide, our dealers and their know-how, how we store and pack the products. To be world-class, you have to look at the bigger picture.

Bestmalzblog: How do you switch off after a stressful day at work?

Axel Göhler: With friends, family, definitely outdoors in nature, with hunting, horses and dogs. We live half of the time in Heidelberg, where the company’s offices are, and the other half in the former caretaker’s lodge on the company grounds in Wallertheim. From there, it is just a short distance to the fields and the vineyards with their gorgeous autumn colors right now. It’s best of all when the horses, dogs and people are all in one place.

Bestmalzblog: Finally, the obvious question concerning the future of the company: Where do you see Palatia Malz GmbH in 50 years? Still in family ownership?

Axel Göhler: It’s important to keep an open mind. We are in a very good position at the moment with a diversified portfolio. We want to tap and expand into other foreign markets, for example in Asia and Africa. Good beer is hard to come by in many countries. If we manage to further establish the brand in the years to come, I can imagine the company growing to ten times the size it is now. What matters for the company and our employees is that the business is run by people who know what they are doing and uphold our high-quality standards – whatever their family status.

Bestmalzblog: Thank you for the fascinating interview, Dr. Göhler!