Per capita beer consumption has fallen with consumers increasingly moving towards wine and cider.
Melbourne, Australia (PRWEB) November 22, 2013
The Beer Manufacturing industry has undergone a shake-up over the past five years. IBISWorld industry analyst Ryan Lin states “per capita beer consumption has declined sharply as drinkers have given up traditional brands, such as Victoria Bitter, in favour of premium beers and other beverages, including cider and wine.” Robust demand for craft beer has resulted in the number of breweries in the industry increasing over the past decade to 150 in 2013-14. At the other end of the market, foreign interests have acquired Australia's two largest brewers, Foster's and Lion. The battle for market share between the two has constrained growth in industry revenue and profitability. Deteriorating consumer sentiment and recent years of poor weather and natural disasters have contributed to revenue declines, as weather influences the cost of inputs and level of consumption.
Industry revenue is expected to grow by 0.8% over 2013-14, as weak consumer sentiment, falling beer consumption and intensifying competition from internal and external sources continue to weigh on sales and margins. In the five years through 2013-14, industry revenue is expected to increase at an annualised rate of 0.9% to total $4.7 billion. Industry growth is expected to recover over the next five years. The Australian beer market will become more fragmented as drinkers continue to opt for quality over quantity. The growing popularity of higher margin premium beers and craft beers is likely to boost the industry, especially as Foster's and Lion bring in domestic production of premium foreign beers. Intense competition is expected to put pressure on profitability. Traditional brands are forecast to lose market share to premium beers. According to Lin, “sales of craft beer are expected to boom, but the segment is likely to consolidate as the two big brewers make acquisitions and small brewers exit the industry.”
The Beer Manufacturing industry in Australia is highly concentrated with the two major players, Foster's and Lion accounting for a substantial portion of industry revenue. However, concentration has fallen over the past five years, with drinkers switching from traditional brands, such as VB and XXXX, to premium international and craft beers, with the industry’s third-largest player, Coopers, enjoying robust growth. IBISWorld expects this trend to continue in line with the diversification of consumer tastes and increasing premiumisation trends. During the past five years, the industry's big two players have been acquired by foreign interests. In September 2011, Australia's largest brewer, Foster's Group, was acquired by Anglo-American giant SABMiller for $10.7 billion. This followed months of courtship and speculation surrounding the future of Foster's, following the company's decision to separate its beer and wine assets. During 2009, Lion was acquired by Japanese food and beverage giant Kirin Brewery Company. For more information, visit IBISWorld’s Beer Manufacturing report in Australia industry page.
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IBISWorld industry Report Key Topics
The Beer Manufacturing industry consists of firms that manufacture, keg, bottle and can beer, in a range of varieties such as ale, stout and porter. Beers are packaged for sale to pubs, bars, hotels and wholesale and retail alcoholic beverage distributors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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