Australia / Analyst Insights
Craft beer and cider boost per capita alcohol consumption

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by James Thomson
Oct 24 2017

According to recently released data from the ABS, per capita alcohol consumption increased in 2015-16 for the first time in nearly a decade, bucking a trend of continuous decline since 2006-07. The average amount of pure alcohol consumed by each Australian over 15 years of age increased from 9.52 litres in 2014-15 to 9.70 litres in 2015-16. This trend is expected to have continued in 2016-17, with per capita alcohol consumption reaching an estimated 9.73 litres. Beer and cider consumption helped drive this increase, and both the cider production and craft beer production industries have displayed strong growth over the past five years. This growth has contributed to a series of acquisitions as traditional brewers attempt to cash in on the booming popularity of craft beer and cider.

Beer consumption increased over the two years through 2016-17 and is expected to remain high in the current year. A large part of this growth has been attributed to the surging popularity of craft beer. Revenue from craft beer producers is expected to increase at an annualised 9.7% over the five years through 2017-18, outperforming the wider beer manufacturing industry, which is expected to increase at an annualised 2.1% over the same period. The growing popularity of craft beer has been driven by consumers seeking variety and quality, and has been supported by rising discretionary incomes. Numerous small-scale craft breweries are opening to take advantage of changing consumer tastes, while liquor retailers are expanding their craft beer ranges.

Although cider only accounts for a small portion of total alcohol consumption, the segment has increased strongly over the past five years. Per capita consumption of cider is expected to almost double over the five years through 2017-18, supporting strong growth in the cider production industry. Cider’s popularity has increased steadily since 2008-09, with strong sales growth at liquor retailers and venues such as pubs, bars and nightclubs. Cider has grown in popularity due to its image as a refreshing alternative to beer, which has been aided by savvy marketing and promotions.

The increasing popularity of craft beer and cider has led to a series of acquisitions, with traditional brewers looking to exploit this emerging market. Beer manufacturer Lion significantly expanded its position in the craft beer market in 2012 with the acquisition of Little World Beverages, followed by the acquisition of Byron Bay Brewing Company in 2016. Similarly, AB InBev, the parent company of Carlton & United Breweries, acquired the craft beer company 4 Pines in September 2017.

Although per capita alcohol consumption increased in 2015-16, the long-term downward trend is anticipated to resume in the current year. Despite the recent increase, alcohol consumption is set to remain at near 50-year lows. Rising health consciousness, increased taxation of alcohol and anti-alcohol advocacy have contributed to an overall decline in per capita alcohol consumption over the past decade. This decline is forecast to continue over the next five years, driven by increasing health consciousness and lower alcohol consumption rates among younger consumers. As a result, growth in the beer manufacturing industry is forecast to slow to an annualised 0.6% over the five years through 2022-23. While growth in the craft beer production and cider production industries is also forecast to slow, these industries are forecast to maintain growth of 6.0% and 4.6%, respectively.


Related Industries:

OD5071 Craft Beer Manufacturing

OD4021 Cider Production