![#](www.e-malt.com/images/left_top_corner16x200.gif) | E-Malt.com News article: Australia: Asahi Beverages planning to win back Australian beer consumers![Brewery news](https://e-malt.com/Images/BeerBullet2.gif)
Will Asahi Beverages ever stop being a beer company? No, says the CEO of the biggest beer and beverages company in Australia, Robert Iervasi. “Beer is at our core,” he insists, the Wall Street Journal reported on April 6.
But almost everything else that was discussed between him and WSJ’s Patrick Durkin next over a two-hour, steak-and-beer at the Builders Arms in Melbourne’s Fitzroy is how the Japanese beverages giant moves “beyond beer”.
Beer consumption has hit a 55-year low as both the amount of beer and the level of alcohol within it has fallen. The beer Australians consume is drastically shifting – 30 per cent of sales are now low-, mid- and zero-strength beers such as Asahi’s Great Northern brand, which has taken the title of the country’s best-selling beer.
Asahi paid A$16 billion for Carlton & United Beverages in 2020 to bring household beer brands such as VB, Carlton Draught and Crown Lager into the fold.
Asahi also owns international beers such as Asahi, Peroni, Grolsch, Pilsner Urquell and it distributes Corona. It controls about 18 per cent of the craft beer market with its range including Balter, 4 Pines, Pirate Life and Mountain Goat, as well as alcoholic ciders Somersby and Bulmers and spirits including Vodka Cruisers.
But last year, it made its first foray into the growing A$1 billion coffee market, acquiring Australasian brand Allpress.
That adds to a portfolio of non-alcoholic drinks including the Schweppes soft drinks brands and Solo. It owns Cool Ridge and Frantelle water, Cottee’s, Spring Valley juices, Charlie’s juices and holds the licence for Gatorade, Lipton’s iced teas and Pepsi. The non-alcoholic division now makes up close to a third of sales.
Iervasi, 45, joined when Asahi bought Schweppes for A$1.2 billion in 2008. He oversees 3500 employees and 18 manufacturing sites and breweries that produce 2 billion litres of liquid a year. He knows what Australians are drinking.
He says the big trend is the growth in the low-, mid- and zero-strength beer but also less sugar and consumption generally. That reflects the community’s changing tastes and the increased focus on health that is shaking up the A$17 billion Australian beverages market.
“Moderation in beverages is the big trend,” the Oceania head of Asahi tells BOSS. “People are still enjoying a drink but are a lot more discerning in what they will consume, whether it’s a more premium product, or something better for them, they are thinking about how to enjoy their beverages in moderation.”
Asahi’s big winner has been Great Northern. It started life as a crisp drinking beer available in Queensland only. But it has taken the country by storm, expanding to include the mid-strength Great Northern Super Crisp and Great Northern Zero.
The mid-strength Great Northern Super Crisp is the No. 1 selling beer in Australia, followed by VB, Lion’s XXXX Gold, Carlton Dry and the original Great Northern.
Great Northern Zero has also become the No. 1 beer in the zero alcohol beer market. Peroni and Carlton have zero beer offerings and more are on the way. Zero beer is now 1 per cent of the market, but it is growing fast. In perhaps a sign of things to come, zero beer represents about 10 per cent of the market in Europe.
“When we first launched zero alcohol beer, we thought it would be more our middle-aged or senior consumers looking to drink zero alcohol beer for health reasons, but what we have found is it is actually across the board,” Iervasi says.
“It comes back to the moderation trend where consumers are looking to moderate their alcohol consumption. They want to enjoy a beer but equally, ‘I love the taste of beer, I love the Great Northern brand, or I love having a beer in my hand, but I don’t want to consume alcohol at that point.’”
The health trend is not just confined to beer. Five years ago, no-sugar beverages comprised 36 per cent of the soft drink markets. But now they make up 46 per cent as consumers purge sugar from their diets.
“One of my priorities is really driving the moderation agenda going forward,” Iervasi says.
“That’s continuing to push the sugar reduction platform. We’ve reduced sugar in our carbonated soft drinks by about 25 per cent since 2015. That’s not necessarily just switching to no sugar products but actually reducing the amount of sugar.”
Asahi’s entry into coffee is another response to the changing face of Australian consumption.
“We know that coffee continues to be a high-growth category for the future,” he says. “Coffee is something we think can work well in both a ready to drink, cold coffee and also hot coffee in restaurants and cafés. Coffee enables us to complete our multi beverage portfolio from that perspective.”
Iervasi was a BOSS Young Executive in 2012 and worked in legal and accounting roles – starting out at PwC and Clayton Utz – gaining a taste of the business world after being seconded to Fosters.
“[I] quickly learnt I enjoyed making the decision, taking the risk and then seeing it through to implementation,” he recalls.
His first permanent move into business was a legal role at the Coles liquor group. He then moved to Cadbury Schweppes, where he worked on the separation of the two businesses and the subsequent sale of Schweppes to Asahi in 2009.
His best advice and most memorable lesson came when he was starting out as a lawyer, when one day he said to his responsible partner: “‘I don’t know what to do next.’ He told me that every problem has a solution, even if we don’t like it. In the 20 years since, I’ve never presented a problem, without a thought-through solution, even if it’s unpopular or not ultimately used, and that’s stuck with me in my career.”
Beyond the big trend in moderation, Iervasi’s other big focus is on increased sustainability. The goal is to make 100 per cent of Asahi’s packaging recyclable, compostable or reusable by 2025 and to reach 100 per cent of eco-friendly materials for PET bottles by 2030.
Asahi joined with Cleanaway, Pact and Coca-Cola Europacific Partners recently to open a recycling PET facility in Albury, NSW. It is the largest rPET plant in Australia and will recycle the equivalent of about 1 billion PET beverage bottles each year. Plans have also been announced to construct a second PET recycling plant in Altona, Victoria, with the same partners, to be opened next year.
Asahi has also installed Australia’s biggest solar project at a brewery in Yatala, Queensland. The company has begun delivering 100,000 cans and bottles of beer each week in Linfox’s first solar-powered, electric truck. It’s the first of many electric trucks Asahi says will deliver its beer.
“As a values-based leader, it’s something we want to give back to society and add to our presence and ensure we are leaving the planet in a better place,” Iervasi says.
06 April, 2022
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