IBISWorld expects Fosters and Lion Nathan will continue to lose market share over the five years through 2016-17, as competition intensifies from both within and outside of the industry.
Melbourne, Australia (PRWEB) October 31, 2011
Conditions in the Australian Beer Breweries industry should improve over the next five years with a stronger consumer environment and rising demand for premium beers supporting sales, according to IBISWorld, Australia’s largest publisher of industry research. However, revenue and profit growth are expected to be limited as producer's fight for market share. This trend will continue for the next five years as competition in the industry intensifies and the market becomes more fragmented. Traditional brands will continue to lose market share to premium beers including flavoured, dry, foreign-label and craft brands. In the five years leading up to 2016-17, industry revenue is expected to increase by 2.0% per annum to total $5.71 billion.
The Beer Breweries industry is highly concentrated, with Fosters Group (recently acquired by SABMiller) and Kirin Brewery owned Lion Nathan National Foods dominating the industry. Despite volume growth being flat, double-digit growth in premium and low-carbohydrate beer sales drove revenue growth over the past five years. While the big two players have seen sales of their flagship beers affected by consumers shifting from beer to ready-to-drink spirits (RTDs) and an influx of foreign-label beer over the past five years, beer manufacturers have benefited from growing demand for higher value premium beers. Fosters and Lion Nathan National Foods invested in boutique brands to capitalise on this. At the same time, greater health awareness witnessed soaring demand for low-carbohydrate beers, with Fosters in particular marketing Pure Blonde to great success. According to IBISWorld analyst, Naren Sivasailam, in the five years leading up to 2011-12, beer breweries industry revenue is expected to increase by 2.0% per annum to total $5.16 billion. In 2011-12, industry revenue is expected to fall by 0.9%.
IBISWorld expects Fosters and Lion Nathan will continue to lose market share over the five years through 2016-17, as competition intensifies from both within and outside of the industry. Traditional brands such as VB and XXXX will increasingly be displaced as the market becomes more fragmented. Premium beers will continue to gain their share of the market, with flavoured beers, international brands and craft beers all benefiting from drinkers' ongoing demand for variety and quality. Declining domestic beer consumption should lead some brewers to target export markets in the United States and Asia for growth. Imports are forecast to decline as more international brands are brewed under licence in Australia. Rising environmental concerns are expected to drive innovation in products, packaging and branding. “Beer Breweries Industry revenue is forecast to grow by an annualised rate of 2.0% over the five years through 2016-17 to reach $5.71 billion,” says Sivasailam.
For more information, download the full report from IBISWorld on the Beer Breweries Industry in Australia
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