The growing popularity of higher margin premium and craft beers is likely to boost the industry.
Melbourne, Australia (PRWEB) August 19, 2014
Beer Manufacturing in Australia has undergone a shake-up over the past five years. 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 such as cider and wine. Robust demand for craft beer has resulted in the number of craft breweries increasing to around 150 in 2014-15. At the other end of the market, foreign interests have acquired Australia's two largest brewers, Carlton & United Breweries (CUB) and Lion. According to IBISWorld industry analyst Jem Anning, “the battle for market share between the two has constrained growth in industry revenue and profitability.” Industry revenue is expected to grow by 0.8% over 2014-15, due to weak consumer sentiment, falling beer consumption due to changing consumer trends and intensifying competition. In the five years through 2014-15, industry revenue is expected to increase at an annualised rate of 0.2%, to total $4.8 billion.
Industry revenue growth is expected to pick up over the next five years. The growing popularity of higher margin premium and craft beers is likely to boost the industry, especially as CUB and Lion bring in domestic production of premium foreign beers. The Australian beer market will become more fragmented as drinkers continue to opt for quality over quantity. However, intense competition between the two major brewers is expected to continue to put pressure on profitability. “Traditional brands are forecast to lose market share to premium beers,” says Anning. Sales of craft beer are expected to flourish, but enterprises in the segment are likely to consolidate as the two big brewers make acquisitions and small brewers exit the industry.
The Beer Manufacturing industry is highly concentrated. There are two major brewers, Carlton & United Breweries and Lion. However, concentration has fallen during the past five years, with drinkers switching from traditional brands such as VB and XXXX to premium imports and craft beers. The third-largest player in the industry, Coopers, has enjoyed robust growth over the five-year period, increasing its market share to 4.0% in 2014-15. Additionally, the re-entry of Coca-Cola Amatil into the Beer Manufacturing industry is a sign of increasing competition from other players beyond the big two breweries. IBISWorld expects this trend to continue in line with the diversification of consumer tastes and increasing premiumisation trends.
For more information, visit IBISWorld’s Beer Manufacturing industry in Australia report page.
Firms in the Beer Manufacturing industry manufacture, keg, bottled and canned 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.
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