International Beer. By James Atkinson

LOCAL vs International

Imported beer was the engine room of the Australian beer market for many years, but today it is locally brewed craft beers driving much of the growth. James Atkinson reports.

Sales of imported beers have softened 0.5 per cent or $7 million in value terms, according to IRI MarketEdge data (MAT to 04/11/18).

Meanwhile, the researcher says local craft beers have grown 30 per cent year on year, equating to an additional $51 million in sales.

“If you isolate the universe as ‘Imported Beer’ and ‘Domestic Exploration Craft’ then artisan beer is taking sales and therefore share from imported beer,” says IRI liquor channel manager Stephen Wilson.

“Imported beer has become a commodity with price often the driver of sales. Local artisan beer has moved into the space once occupied by imported beer.

“Drinkers feel connected with local artisan brands which offer taste cues, innovation, variety and they want to be seen to be supporting indie breweries.

“As a result, artisan brands are not only winning share of throat from imported beer brands but driving the majority of craft beer growth.”

Lion’s general manager of craft, Gordon Treanor, points to another obvious driver for the growth of local craft beer.

“I think across the board people are looking for a little bit more flavour. We’re seeing more people enter into the craft category when they’re looking for that change, and that is drawing drinkers from all sorts of segments,” he says.

Craft beer has played an increasingly important role for Lion in the wake of the 2016 transfer of AB InBev brands including Corona, Budweiser and Stella Artois across to its local subsidiary Carlton & United Breweries.

Lion has since invested considerably in craft beer with the acquisition of Byron Bay Brewing Company and establishment of entirely new breweries such as Eumundi on Queensland’s Sunshine Coast and Perth outfit Bevy.

“All our breweries around the country are a core part of the community. We open the brewery doors and let people in to go on a tour or experience our amazing hospitality.

“We get millions of visitors to Lion craft breweries around the country every year and that’s because of the connection to the brewers and our hospitality team.”

Of course, international beers and flavour are no longer mutually exclusive, given the rise of global craft brands.

Lion recently signed a new agreement to market, sell and distribute the respected Brooklyn Brewery beers in Australia, while it has also stepped up local distribution of beers under the Panhead Brewing Company brand, acquired by Lion New Zealand in 2016.

And IRI calls out AB InBev’s global craft powerhouse Goose Island IPA as one of few American imports generating in sales growth in excess of $1 million over the last year.

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contributors to the imported beer category, which IRI says still accounts for $1 in every $5 spent on beer in Australia despite its ongoing decline.

IRI says the European and Asian market segments have taken the biggest hit, with the Americas still generating growth.

“European beer sales decline has been the most telling factor in the overall decline of imported beer sales,” says Wilson.

He says Becks and Carlsberg Lager have collectively shed almost $36m in sales year on year – a significant reversal of fortunes for the latter Danish brand, for which local partner Coopers reported a 24.8 per cent sales increase in 2017.

“Not all brands, however, are experiencing softening sales with brands like Peroni Nastro Azzurro, Hollandia, Peroni Red and Peroni Leggera all generating solid growth numbers,” adds Wilson.

Also among the laggards were Stella Artois and Kronenberg 1664, each shedding more than $1 million in sales, according to IRI.

However, Stella is now getting renewed focus from CUB in Australia, where the Belgian brand was recently announced as the new naming rights sponsor of one of the country’s biggest racing events, the Caulfield Cup.

And parent company AB InBev appears poised to shake up marketing for Stella on a global scale, with the appointment of veteran CUB marketer,Tim Ovadia, to the position of global brand director, based in New York City.

“It is a privilege for me to able to nurture one of the world’s most well-known brands across 40 countries,” he says.

“I will be leading a team of three super talented beer marketers developing and executing a program that unlocks the potential of Stella Artois to become the world’s largest and most premium European lager.”

With fewer Asian Beer brands than there are European beer brands, the impact of declining sales of key products such as Asahi Super Dry has had a significant impact on total Asian Beer sales.

Asahi Premium Beverages has moved to arrest the slide, launching a new campaign leveraging Asahi’s Japanese heritage that is a dramatic departure from its marketing efforts.

The disruptive ‘Enter Asahi’ campaign launched in November 2018, featuring a dystopian world where technology and traditional collide in scenes featuring a giant squid, robot geishas, warriors and salarymen.

“We have seen big growth in craft beer and contemporary beer and brands like Asahi have to compete within that market, which is why we needed to create emotional resonance, particularly with the millennial audience who can be pretty fickle and have a large consideration,” Asahi GM of marketing Michael Edmonds recently told AdNews.

Long a key component of the imported beer category, Mexican beer continues to enjoy both value and volume growth.

Launched in March 2018, Corona’s mid-strength offshoot Corona Ligera is easily the brand generating the highest growth, according to IRI.

“However, there has been cannibalisation of Corona Extra sales as a result,” says Wilson.

He says sales of Corona Extra declined by more than $3 million over the year, while Sol Cerveza and Dos Equis XX Lager have each contributed more than $1 million to the sector’s growth.

American beer also enjoyed growth, second only to Mexican Beer, IRI’s Wilson revealed.

Coors and Miller Genuine Draft both generated growth in excess of $1 million in Australia, where local distribution partner CocaCola Amatil has been hard at work aligning the brands with live music and urban subculture.