Australia: Consumption of craft beers continues to grow

The brewing industries in many countries are undergoing dramatic changes, with increasing numbers of craft breweries challenging the traditional volume-based business model of major corporations, Marketing Magazine reported on June, 11.

In the US for example, more than 400 breweries opened in 2012, an increase of 17% from the year before. Craft beer continues to grow even when beer consumption overall is declining in many markets around the world. This certainly seems to be the trend in countries like the US, Canada, New Zealand and indeed Australia.

In 1990, the centralisation of the Australian beer industry seemed complete; three companies controlled the market and the whole country had just 11 breweries. Yet this seems to have been the turning point rather than the end state: 20 years later the craft beer sector had well and truly made its entrance so that by 2013, Australia’s beer industry consists of over 130 breweries.

The trend suggests craft breweries have found a niche market where the large breweries find it hard to compete.

While beer consumption in Australia has decreased steadily every year since 1979, consumers increasingly demand quality beers and the consumption of craft beers is increasing. ABC news reported that the consumption of craft beer in Australia is increasing by 6% every year. Nevertheless, the beer industry in Australia is still largely centralised, with multinationals SAB Miller (UK) and Kirin Holding (Japan) controlling about 90% of the market.

Large corporations are not ignoring craft beer, even if they generally serve a different segment of the market. The industry recognises that Australians are drinking different beer for different occasions, and craft breweries are leading the way by developing more styles and products to cater for this growing trend. In response, the large breweries are launching their own ‘craft’ labels and buying out existing craft breweries.

For example, Fosters Group (owned by the world’s second largest brewing company SAB-Miller) has acquired one of Australia’s first craft labels, Matilda Bay. Similarly, Lion Nathan (owned by the Japanese giant Kirin Holding) acquired Little World Beverages, which operates two craft breweries, Little Creatures and White Rabbit.

14 June, 2013