Australian beer sales decline

Research released by Nielsen and Citi has revealed that beer sales in Australia recorded volume declines for the eighth consecutive month in August 2010. With beer drinkers in the country increasingly opting for quality over quantity, not only are major brands at the mercy of microbreweries, but the category in general risks losing share to other alcoholic drinks.

The data, reported by The Sydney Morning Herald, indicates that in the month to August 2010 volume sales of Foster's Victoria Bitter fell by 15.4%. The company's premium low-calorie beer Pure Blonde volumes dropped by closer to 20%. Lion Nathan's Tooheys brand was down 16.2%, while its Boag's and XXXX lines fell by 8.1% and 4.2%.

The declines were attributed to the cooler weather, as well as consumers moving from traditional to boutique brands - typically offered in smaller bottles, contributing to lower volume sales.

The study believes the shift is due to consumers adopting a more quality-driven approach when selecting alcoholic beverages, and the growing appeal of craft beers that offer new flavours, styles and recipes.

Driving consumers towards more boutique offerings are their authentic brand story (perceived or actual), unique taste and their small price premium compared to mainstream brands.

A Datamonitor consumer survey conducted in July and August 2010 found that nearly one in six (16%) Australians had chosen alcoholic drinks in pubs, bars or restaurants on the basis of value more frequently in the prior six months, while almost one in four (24%) did the same with respect to alcohol for consumption at home.

Australians' beer preferences are being increasingly influenced by considerations of value and quality, with consumers expressing a distinct willingness to try new products, as opposed to giving in to habit and sticking with tried and tested brands.

Mainstream brands can overcome this swing by emphasising their own brand story and focusing on the heritage and authenticity that their classic brands offer. Indeed, given that the price gap between boutique and mainstream brands continues to contract, leading brands need to compete on the basis of more than just lower cost.

As other alcoholic beverage categories such as wine and spirits continue to make inroads into beer sales, the beer sector as a whole needs to innovate in order to win back consumers.