The traditional Aussie beer drinker is on the wane. Long-necks and stubby-holders no longer define the Australian beer scene, and younger – and increasingly female – drinkers are looking for something else in beer, or looking elsewhere altogether. As with many Western markets, long-term per capita consumption is falling, forcing brand owners to innovate in terms of strength, occasions and image.
With a plethora of choice, in terms of both brands and flavours, the Aussie consumer is focusing on three key demands – ease of drinking and flavour, interest in locally-sourced products, and wellness, whether through lower-strength drinks or abstention.
Consumer palates are changing, with younger consumers turned off by strong, hoppy beers, preferring a cleaner and fresher taste profile. This shift to more contemporary flavours has led to brand owners adapting their offerings, a turning point being the launch in 2015 of Great Northern Super Crisp by Carlton & United Breweries. Its lower alcohol content at 3.5% allows a more contemporary flavour, whilst its tagline of “The Beer for Up Here” suggests cues of camping, the wild and the great Australian road trip, focusing on a younger target audience and drinking occasions beyond the pub or club. Other key players have followed suit, launching low-alcohol (or “mid-strength” in the Australian lexicon) beer brand extensions, such as XXXX Gold, Carlton Mid and, in 2022, Coopers Dry 3.5.
According to Euromonitor, low-alcohol beer (which includes all beers between 0.51% and 3.5% ABV) accounted for approximately 13% of the Australian beer market by total volume in 2022, whilst in Canada, the US and the UK it accounted for less than 1%.
The burgeoning demand for beers that match the Australian palate of fresh, light and approachable is expanding the consumer base of beer consumers beyond the traditional beer drinker. Brands such as Matilda Bay are capitalising on this trend, with the 2022 launch of Aussie Wheat Beer, a lighter, more sessionable version of traditional German wheat beer. Carlton & United Breweries launched Sungazer Fruity Beer also in 2022, targeting this new demographic of beer lovers with a sweeter drink that highlights fruity flavours.
There are an increasing number of consumers who are abstaining from alcohol completely, and more that are choosing to drink less frequently, creating demand for non-alcoholic beer. Whilst still in its infancy, Euromonitor expects dynamic demand over the forecast period, with total consumption set to double by 2026. Well-known brands Heineken 0.0 and Carlton Zero lead sales, but the category has attracted interest from smaller, local players such as Heaps Normal, which has garnered much popularity since its launch in 2020. The company not only makes lager but is tapping into the widespread interest in craft beer with brands such as Heaps Normal Half Day Hazy and Heaps Normal Quiet XPA.
The success of smaller, local craft brands reflects trends towards localism driven by the pandemic and local weather events such as flooding and bushfires, which had a disproportionate impact on smaller, locally-owned businesses without the scale to withstand such events. This engendered public support through supporting local businesses. The craft scene is awash with local brewers throughout Australia’s major centres that have tapped into this trend, and whose brewhouses are destinations for a night out. Many craft brewers enjoy a cult following, with limited edition releases and local production key to engaging with consumers. One example that Euromonitor believes hits all these cues is the Sobah Non-Alcoholic Beverages Company, which produces craft beers such as Sobah Badah Gali Pepperberry IPA and Davison Plum GF Ale. These are non-alcoholic and based on indigenous ingredients, with the family-owned and Aboriginal-owned company highlighting its commitment to social equity, wellness, sustainability and to promoting First Nation culture, arts, language, and history.
Euromonitor believes the diversification in the Australian beer scene will continue, with brand owners adept at hitting cues important to the newer beer consumer. Craft brewers originally focused on ales but are increasingly shifting to the cleaner flavours of lager, whether alcoholic or not. Beer will face continued competition from RTDs, but the imaginative flavours and stories prevalent in the beer scene will stand it in good stead.
Lessons from Australia
With beer consumption on the decline across many Western markets, and on-trade outlets under particular pressure, global players can learn from the diversification of flavours and use of local and indigenous ingredients in Australia to meet eclectic consumer needs. Furthermore, the popularity of mid-strength beer in Australia shows that the paradigm of full alcohol or no alcohol is not black and white. Brand owners can target consumers who want to drink more responsibly, whilst aligning with long-term trends towards drinking less.
For further insight on beer and other alcoholic drinks in Australia, see the full reports and statistics here.