Beer manufacturing is in the midst of a major shake-up with consumption on the downturn in general. Also, imported, premium and craft beers have stolen market share off the big mainstream brands.
More recently, we've seen a move to flavoured beer and fusion products, as companies seek new ways to stand out from the crowd. Examples of these trends are Malt Fiction, a brewing company established by three Adelaide entrepreneurs, Jared Birbeck, Peter Lynn and Antony Tropeano, and Strawberry Blond, a cider beer fusion product from Zeven Lemon Beerworks in Sydney.
According to industry analyst Canadean, while the cider market has also undergone a revolution over the last two decades, consumers still see cider as a beverage they only turn to occasionally, so manufacturers need to do more to enhance the appeal of cider, and craft production and sensory fusion is the way to success.
The craft beer movement, meanwhile, has resulted in a rise in the number of smaller breweries in Australia. According to IBISWorld, there are now around 150 of them, although the industry analyst notes that while entry to the beer market on a small scale and localised level is possible, entry at a national level is hindered by significant barriers to entry.
"This is evidenced by the large number of boutique or microbreweries, the small number of companies that dominate the national market – and very few companies in between," it says.
According to IBISWorld, the barriers to entry include high ongoing capital requirements, existing brand loyalty, and control over distribution channels. The incumbent brewers in Australia have also diversified into other areas like importing and producing other beverages, which has enhanced their overall distribution capabilities and market intelligence, it says.
Meanwhile, Australia's two largest brewers, Lion and Carlton & United Breweries (CUB), are now both in the hands of foreign companies, and according to IBISWorld, the battle for market share between the two has constrained growth in industry revenue and profitability.
Consumer advocacy group Choice says these two companies are now locking local craft brewers out of pubs with exclusive contracts. According to Choice, Lion and CUB can offer more money, rebates and other incentives for exclusive access to 80 per cent or even 100 per cent of pub taps, making it hard for independent brewers to get a fair go.
KEY OPPORTUNITIES
Craft beer isn't a fad, but generally reflects what consumers are looking for, according to Peta Fielding of Burleigh Brewing and chair of the Craft Beer Industry Association.
"People want a beer that tastes a bit different, with an authentic story," she says.
"All of that speaks to a great opportunity overall and people are doing different things to participate in the market. What a craft brewery looks like can be a hundred different things."
According to industry analyst Canadean, cider manufacturers could also do more to enhance the appeal of cider, and craft production and sensory fusion is the way to success.
