A review of Australian packaged beer sales F07. By Ian Kingham.

While Australia has always had an insatiable appetite for a cold lager, today there are more factors influencing consumer choice than ever before. Major media spend, consolidation of national and international production, and our changing lifestyles, are all key factors contributing to the evolution of the Australian beer market, and while there have always been beers entering and exiting our repertoire, insiders in the industry would agree that the pace of change seems greater than ever before. Since 1978 we have effectively been drinking the same or marginally less per capita of beer, year-on-year. Most of the volume growth in Australian beer sales, since this time, has been driven by population growth. However, the notable change is that consumers are prepared to spend more which is driving value growth. Consumers are now looking for different beers for different occasions. With brewers developing more styles and products to cater to this growing trend, we are seeing some category shift within the Australian beer market, particularly in areas of Craft, Low Carb and Premium.

Today the Australian packaged beer market is worth approximately $4.9 billion.

"Australia's Coldest 100" is a reflection of the top selling beers today. While the market is maturing and consumers are trying more new products and styles than ever before, Australia's Coldest 100 remains relatively unchanged, but for how long?

To understand Australian drinking trends, we first need to understand each

of the four beer categories (Full strength beer, Mid strength beer, Low alcohol beer and Premium beer), the share they hold and their respective growth rates.

Full Strength Beer

• Full strength beer is the largest category and grew 5% for F07.
• A new found consumer interest in beers with lower carbohydrates has been at the forefront of this growth.
• Full strength beer has had marginal growth over the past five years aggregated to the equivalent of 3.6% per year.
• 59.5% Category Share Split of the Australian Packaged Beer Market

Mid Strength Beer

• Mid strength beer is the second fastest growing category at 12% for F07.
• A national interest in XXXX Gold and the introduction of VB Midstrength have been the catalyst for this growth.
• Mid strength beer has had growth over the past five years aggregated to the equivalent of 6.6% per year.
• 15.7% Category Share Split of the Australian Packaged Beer Market

Light Beer

• Light beer is the only category in decline, falling 4.7% in F07.
• An increase in mid strength beer and very little new news in this category have lead to the decline.
• Light beer has declined over the past five year's at an aggregated equivalent of -4.2% per year.
• 6.8% Category Share Split of the Australian Packaged Beer Market

Premium Beer

• Premium beer is the fastest growing category at 14.7% for F07.
• Foreign premium beer has been the catalyst for growth in this area through an increase of locally brewed and marketed foreign beers. Craft Beers are also driving growth through a broader selection of products and styles.
• Premium beer has had growth over the past five year's at an aggregated equivalent of 11.3% per year.
• 18% Category Share Split of the Australian Packaged Beer Market

Emerging Categories

Foreign Premiums

• Foreign Premiums grew at 20.2% in F07 vs Domestic Premium at 5.3%.
• Foreign Premiums are premium beers that have their origin overseas, (while many are now brewed locally) thier category classification remains unchanged.
• Foreign premiums are price positioned more closely to full strength beer, encouraging consumers to trade up.

Craft

• Craft Beer now constitutes 10% of total premium beer sales.
• Craft Beer has grown over the past five years at an aggregated equivalent of 9.1% per year.
• Craft has been driven by the emergence of microbreweries across the nation and the up weighted marketing and distribution of Matilda Bay, Malt shovel and Little Creatures brewery beers.

Low Carb

• Low Carb Beers have grown 300% over the past two years.
• Low Carb growth has been predominantly driven by consumers looking for a "healthier alternative without changing their lifestyle".
• Carlton Pure Blonde has been the leader in this sub-category with many new entrants fuelling the growth.

State based category share splits

Not all Australian beer drinkers are the same, each state has different lifestyle needs, climate, age demographics and brand availability. As a result we can see far greater variations in the different categories when we view the share of beer categories by state.

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