Why Lion is banking on classic beer

As sales growth slows for craft beer due to cost-of-living pressures, Lion is upping its focus on classic beer brands.

Lion marketing director Chris Allan says Australians are increasingly shifting their attention to mainstream beer brands, with a rising number of consumers opting for classic beers in their search for “trustworthy brands that offer great taste at affordable prices”.

“This trend is evident in our own brands such as XXXX, and Tooheys, which have long been loved and ingrained in Aussie culture,” he said.

“On Tooheys alone, our data indicates an impressive over 50 million schooners have been sold at venues in the past year.”

The enthusiasm for classic beer has been gathering pace since the first pandemic lockdown of 2020, when retailers began reporting a swing away from craft beer towards mainstream brands.

According to CGA by NIQ’s James Phillips, domestic beer remains the most popular choice among Australia’s pub drinkers, with 35% buying it in the last three months—putting it well clear of soft drinks (26%) and still wine (20%).

“But while demand for big domestic brands remains high, numbers favouring craft and imported categories have dropped over the last year.”

Lion recently gave its Tooheys portfolio a packaging refresh and a new ad campaign to capitalise on the rising preference for classic beer.

The campaign is a spin on the classic “I feel like a Tooheys or two” jingle from the 1970s. In 1976 the original campaign pushed the brand to the number-one spot in the NSW beer market and held it there during a 12-year run.  

“As a business, we are actively adapting to changing classic beer drinking habits and listening to our consumers’ needs,” Allan (above) said.

“From a brand perspective, we are investing in growing our brands and ensuring they are relevant for today, an example of this is the successful reinvigoration of the famous jingle “I Feel Like a Tooheys”, which connected with Aussies who knew the jingle and introduced it to a new generation of Tooheys drinkers.

“Tooheys is a brand that has over a century and a half of stories under its belt. Bringing back this jingle has helped to reignite memory structures and get stuck in people’s heads quickly. The meaning of the jingle in the contemporary context, bridges old-school values with a modern touch and creates a powerful emotional connection that we hope will last for generations to

Is the craft boom over?

Allan said the rising cost of living had started to influence consumer buying decisions, with premium craft beers taking a backseat compared to well-established mainstream brands. However, the craft category still held an important role in the industry.

“While there is a noticeable slowdown in the craft beer sector, it doesn’t mean that the demand for locally produced craft beer has disappeared,” he said.

Allan also believes innovation in the craft sector helps to keep the beer industry fresh, encouraging brands to explore new taste profiles and push the boundaries through marketing exercises.

Lion’s Furphy brand, for example, recently won a Silver Lion at Cannes for its ‘What the Truck?!” promotion, which saw a beer truck wedged on its side in a CBD laneway to celebrate the launch of Furphy Crisp Lager.

“We have been overjoyed by the incredible response to the Furphy What The Truck?! campaign,” Allan said.

“Winning a prestigious Silver Lion at Cannes Lion awards marks a significant milestone in gaining global recognition for our work, thanks to our agency partners.

“Our main goal was to craft a compelling narrative that not only reflects the essence of Furphy as a brand but also generated attention to the launch of Furphy Crisp Lager. The reaction to our ‘Unbelievable’ stunt has been truly remarkable, and it has solidified Furphy’s position as a beer brand that will remain a topic of conversation for years to come.

Tackling challenges in beer industry

Last week was a tough one for the beer industry, both classic and craft. While it was International Beer Day on August 4, there wasn’t much to celebrate, with the Federal Government increasing the excise on beer in line with inflation.

The price of beer went up 2.2%, with previous hikes since the start of 2022 equalling a 10% jump in cost, making Australia the third-highest beer taxing country in the world, behind Finland and Norway.

Recent data from Roy Morgan’s Alcohol Consumption Report also shows that while consumption of beer did increase during the early stages of the pandemic this momentum quickly dissipated.

Now under a third of Australians, 6,537,000 (32.2%) consume beer, down significantly from the 7,413,000 (37.6%) who did so in the 12 months to March 2020 just before the pandemic struck and turned the world upside down during much of the past three years.

“Although beer did enjoy an increase in consumption during 2021, now only 32.2% of Australian adults drink beer in an average four weeks, down significantly by 5.4% points from pre-pandemic in March 2020 – the largest decline of any form of alcohol,” Roy Morgan CEO Michele Levine said.

“The decline in beer drinking since 2005 has been more sustained than any other type of alcohol and the early signs are that the short-term pandemic impact on beer drinking has not been enough to halt the long-term trend.”

The rise of no and low

While it is a challenging time for the beer category, Allan said Lion was successfully evolving its offering to meet changing tastes and was being rewarded with increased sales in developing markets.

For example, the moderation and “better for you” trends, particularly among younger drinkers, are boosting sales for low-alcohol and low-carb beers, while the mid-strength market is now the biggest category in the country.

“As a brand we’re proud to be offering great tasting beers in the low and no category,” Allan said.

“Our products such as XXXX Gold have quickly been established as the favourite mid-strength beer option among Aussies as they seek to moderate their alcohol consumption. It’s the resurgence of beers like XXXX Gold and the emergence of Hahn SuperDry 3.5 which signals interest in beers that can still deliver full flavour beer that satisfies the taste buds but that just so happens to have a little less alcohol in them.”

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