Continued volume decline, stagnant value growth
The total volume decline for alcoholic drinks in 2013 exceeded that observed during the review period. Several factors can be attributed as causative factors, including premiumisation of consumer preferences resulting in smaller purchase quantities at higher prices, continued migration of consumer preferences away from beer toward other alcoholic drinks and negative media attention toward RTDs
In addition, total value sales growth in 2013 of alcoholic drinks continued to lag behind the review period growth. This can be attributed to a number of factors, including strong pre-global financial crisis growth rates and the following reduction in higher-priced on-trade consumption, discretionary spending pressures affecting alcoholic drinks consumption habits and increased off-trade discounting during the economic downturn.
New alcohol laws come into effect
The most significant event in alcoholic drinks in 2013 was the implementation of alcohol law reforms passed by the government in 2012. The reform legislation is considered to be the most comprehensive reform in more than 20 years and is aimed at improving New Zealand’s drinking culture and reducing the harm caused by excessive drinking.
The reform consists of three pieces of legislation, with the most poignant being the Sale and Supply of Liquor Act 2012. The Act sets nationally mandated maximum opening hours for both on and off-trade outlets, while reinforcing host responsibilities and banning all advertising and marketing material which promotes excessive drinking.
Craft trend continues
Craft producers continued to stimulate considerable changes within the dynamics of New Zealand alcoholic drinks in 2013, particularly within beer. As witnessed in a number of other categories, consumer preferences shifted toward premiumisation, with shares of mainstream beer brands suffering as craft beer brands continued to gain traction. Craft trends are also emerging in spirits and cider/perry also, with many local craft manufacturers pooling their resources to combat the superior logistical and distribution capabilities of the major players. Additionally, overall volume sales decreased, whilst unit prices rose as craft products generally carry higher prices and individuals consequently consume less.
Traditional duopoly challenged
Alcoholic drinks in New Zealand is traditionally dominated by two major players; Lion Pty Ltd and DB Breweries Ltd. While these two companies continued to lead in 2013, their overall share declined in the face of the emergence of Independent Liquor (NZ) Ltd as a serious threat to the traditional duopoly, as well as the competition for local craft manufacturers who lead the development of innovation and premiumisation.
Growth forecast in line with economic recovery
There will be a marginal improvement in alcoholic drinks sales over the forecast period, with total retail sales seeing a marginal increase of a 0.4% CAGR, largely due to the expected economic improvement in New Zealand, with the New Zealand Government expected to return to surplus by 2015. However, several other factors may adversely impact alcoholic drinks such as the legislative reform, as well as grape harvests for wine. Additionally, there is a national general election in 2014 and the results of this may have an impact on treasury forecasts concerning economic growth.
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The Alcoholic Drinks in New Zealand market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Production, imports by origin, exports by destination
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Alcoholic Drinks in New Zealand?
- What are the major brands in New Zealand?
- Have there been any alcoholic drinks legislative changes over the past 12 months?
- How is the alcoholic drinks industry affected by the recession?
- What is consumed more; beer, wine or spirits?
- What have been the key trends seen in new product developments?
- Do alcoholic drinks consumers want value for money or added value?
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This industry report originates from Passport, our Alcoholic Drinks market research database.