Last shout: changing tastes leave beer sales flat

WITH beer consumption at its lowest in over half a century, Australians aren’t the beer drinkers we once were and the stereotypical Aussie BBQ is facing a significant change, JACQUI GARRITY reports.

What is the current brewing climate in Australia?

The recent sale of Foster’s Brewing to South African British Company SABMiller, has drawn the Australian beer market into focus. Following the Foster’s sale almost 90 per cent of the Australian beer market is now owned by overseas interests. This makes Cooper’s Brewery Australia’s largest Australian-owned brewer, with less than a four per cent market share. A June 2011 Industry Report on beer and malt manufacturing in Australia has shown an industry revenue of $5.02bn and a profit of $948.9m in 2011, with 2.3 per cent expected growth over five years from now until 2016. A double-digit increase in cider and low-carbohydrate beer has driven industry revenue over the 2006-11 reporting period, but beer consumption overall is in decline. While the sale of premium beer is growing, with a market share tipped to increase from two to six per cent over the coming years, the decrease in sales of flagship beers is the cause of overall decline as consumers tastes and drinking habits change.

Why is beer consumption in decline?

It might surprise Australian drinkers to know that we are only moderate consumers of alcohol by global standards, falling behind Canada, the United Kingdom, New Zealand and the United States. According to the Australian Bureau of Statistics (ABS), this year beer consumption in Australia fell to a 62 year low, from 4.62 litres per capita to 4.56. The decline of beer consumption in Australia can be traced back to the 1970s when drink-driving laws changed. According to a Department of Health and Ageing report, per capita consumption of alcohol peaked at over 6.4 litres in the mid-1970s and has declined gradually ever since. During the past decade alone, beer consumption in Australia has fallen by close to 13 per cent. Greater health awareness, as well as public education campaigns, random breath testing and increasing competition from other beverages have all played a part.

While there are a range of reasons behind the decline of beer consumption, changing tastes is thought to be an integral factor where the decline of beer is almost mirrored by an increase in wine consumption. According to editor of Australian Brews News, Matt Kirkegaard, the heaviest consumers of alcohol per capita, those within the 18 to 25 year age bracket, are increasingly moving away from beer and switching to products like wine, cider and ready-to-drink spirits (RTDs). “After growing up drinking soft drinks and fruit juices, these sweeter beverages are more appealing to those with younger taste buds, who do not like the bitterness traditionally in beer”, Kirkegaard says. “Most recently, beer consumption has fallen as consumers place a greater value on quality over quantity, with many drinkers moving towards gourmet products where beer is not perceived to fit within that niche.” As a result, consumers are drinking progressively less mainstream beer as tastes and preferences become more educated. An estimated 90 per cent of overall beer consumed is considered to be commercial, with only nine per cent of the market classified as imported and craft beer. While premium or craft beers continue to gain popularity, consumers are unable to drink as much of these products because of their high alcohol content and strong flavour. Because of this, while consumers are drinking more of these products as a substitute for commercial beers they are unable to drink as much, so the beer market overall continues to decline.

How significant is advertising and marketing to overall beer consumption?

According to publisher and advertising director at Beer and Brewer magazine, David Lipman, advertising and marketing plays a key role in commercial beer sales. Where mainstream beer advertising still presents to a very stereotypical market, the question is then raised about whether or not these advertisements still represent the typical drinker in 2011 and whether there are enough of these consumers to continue to drive sales. According to Kirkegaard, even if the images of mateship presented in mainstream beer advertising are less relevant than they might have once been, there is an element of the market that still wants to see beer as the man’s drink that you have with your mates. “All marketing plays to stereotypes and beer advertising is no different,” says Kirkegaard. “There is a belief that there is nothing more Australian than having a drink with your mates at the local pub. So even though drinking is in decline and the traditional market is changing, consumers probably do still want to be seen very much in that mould which is why beer advertisements continue to be successful.”

Are brewers doing enough to market beer products in a crowded market?

The largest brewers in Australia have been criticised for ‘chasing the market’, imitating best-selling international brands such as Corona, with beers like XXXX’s Summer Bright and Foster’s Great Northern. By producing beers with similar packaging and flavour profiles, the big brewers are crowding the market and are not attracting new drinkers. Kirkegaard suggests that while wine and spirits have an increasingly sophisticated perception, beer appears to still be very much stuck in the 1970s. This is an issue which is difficult for brewers to change, because tinkering with people’s perception of a product can drive existing customers away. According to Kirkegaard, brewers are increasingly enthusiastic to promote beer to women to combat this problem, as statistics show that only 25 per cent of females select beer as their drink of choice. Yet there is a risk in taking a pre-existing beer and trying to make it more female friendly after spending tens of millions of dollars and decades portraying beer as a manly drink. Kirkegaard likens the dilemma to a Holden Barina. “A bloke wouldn’t be caught dead driving it because it’s a chick’s car”, he says. “Brewers would end up killing their male market and not attracting female drinkers”.

As culture changes, can marketing be held accountable for a decline in consumption?

Effective marketing should portray to consumers how they want to be seen, so even if the traditional beer drinker has changed, marketing should not be held accountable for a decline in consumption. “If you go back 30 years”, says Kirkegaard, “Coffee was instant, cheese was cheddar, beer was lager and wine was in a cask. All of those have changed except for beer which is still very much seen the way it was 30 years ago and that really counts with the rise of the gourmet.” Beer has been very slow to respond to change in food and dining culture and is still a lightly flavoured, bland product that is not embraced by diners because it does not elevate a dining experience. “Perceptions are so broad that beer is that blokey thing you drink when watching the football or standing around poking sausages at the barbeque, it’s not something that you have in more upmarket, upscale and elegant occasions,” says Kirkegaard. “As a result, marketing decisions are not necessarily killing sales or driving people away from beer, but are making it hard for beer to reposition itself in a way that makes new drinkers come to it.”