There are signs cost-of-living pressures will boost beer sales in Australia as consumers move away from higher-end spirits and RTDs towards more budget-friendly drinks.
Lion CEO Sam Fischer told the Australian Financial Review some switching to beer is likely to happen, with consumers looking more closely at value options.
“They can jump categories to go into beer,” he said. “There is the potential for some down-trading.”
Endeavour Group CEO Steve Donohue confirmed this week that while RTDs were still the fastest growing category at Dan Murphy’s and BWS in Q3 2023, the huge growth rates in pre-mixed spirits were slowing.
“They had really been motoring along,” he told the AFR.
Fischer told The Australian that even beer was at risk of being unaffordable to the average Australian if the Federal Government didn’t review beer tax rises.
“That affordability challenge is something that we have had to lean into for a long period of time and we have made a strong case to show that parts are doing it tough, particularly in regional and rural areas,” he said.
“The government should consider at least the partial freeze on CPI so that communities can get together and enjoy moments together down at pubs.
“That is something that we as an industry and the Australian Hotels Association have lent into, and that’s the core elements of the case that we’ve made. We are continuing to try to make sure we make it (beer) as accessible as we possibly can.”
Classic beers make a comeback
Lion is also reinvigorating classic beer brands such as Tooheys, which recently received a design overhaul and a revival of its famous 1970s jingle, “I Feel Like a Tooheys”.
As the first major update to Tooheys core packaging since 2015, Lion said the contemporary new appearance showcased Tooheys’ core brand assets, while still nodding to the brand’s rich 154 year history.
The enthusiasm for classic beer gathered pace during the first lockdowns of 2020, with retailers reporting a swing away from craft beer towards mainstream brands.
Lion Brand Director Chris Allan told Australian Associated Press last year that the brewer’s “legacy brands” had also experienced strong growth relative to beers such as XXXX and Hahn.
Swan Draught experienced 31% growth in two years, during a time when the rest of the category had been in single digits.
“I think consumers are looking for stuff that just gives them what they need and does what it says on the tin, so to speak,” he said.
“Good value, great quality and actually reflects a really honest representation of what are Australian values.”
Shifting customer behaviour at Dan Murphy’s & BWS