Everything you wanted to know about the Australian beer industry
Australia’s beer sector has seen a drop in consumption while maintaining revenue growth, according to new research. The findings, collated by research company IBISWorld, have shown how the Australian beer industry has seen steady growth in recent years, despite a decline in per capita beer consumption.
The rise of craft beer has driven much of this growth, with consumers opting for higher-priced, premium beers over traditional options, the research stated.
Local reports outlined how, as a result, craft beer sales have outpaced those of regular beer, and independent breweries have gained market share. In response, beer giants including Asahi and Lion have expanded their craft beer portfolios.
IBISWorld’s market research had already projected the Australian beer industry’s revenue would reach AU$8.7 billion by 2025, growing at an annual rate of 0.9% between 2020 and 2025.
Now, the revenue growth has been supported by consumers shifting away from full-strength beers like Victoria Bitter and XXXX Gold and opting for more expensive craft beers as an alternative.
The research has also identified how, despite a drop in overall beer consumption, higher prices and greater spending per beer have helped maintain revenue levels.
Largely, the beer industry in Australia remains concentrated in New South Wales and Victoria, where population density and market demand are highest, the analysts noted. However, new breweries face challenges, including securing land, obtaining licenses, and competing for tap and shelf space.
The research reiterated how the Australian beer industry is expected to continue growing until 2030, although it also warned that increasing excise taxes may impact profit margins.
Australia has the third-highest beer tax in the world, behind only Norway and Finland, which, according to the analysts, could affect the cost structures of breweries and their pricing strategies.
The report noted that traditional full-strength beers, such as Victoria Bitter, Carlton Draught, and XXXX Gold still remained the largest revenue drivers, despite their declining market share. However, other categories, including mid-strength, light, and low-carb beers, were also growing. Despite this they had not yet surpassed full-strength beers in terms of revenue.
Overall, the analysts highlighted that the industry is projected to be worth AU$8.7 billion, with competition rising as the number of breweries increases by 8% annually, bringing the total to 878 businesses.
IBISWorld pointed out that, if you look back, while beer consumption per capita decreased—from 190 litres per person in 1974-75 to 82 litres per person in 2019-2020—revenue growth at that time was still driven by the increasing demand for craft beer.
Despite the rise of interest in the myriad styles of beer available from craft brewers, the one area of interest was full-strength mainstream beer which has maintained its popularity. Especially across brands like Victoria Bitter, XXXX Gold, and Carlton Draught still holding a large part of the market share.
The research has also identified geographical regions where beer plays a big role. For instance, most breweries in Australia are based in New South Wales and Victoria, where the consumer base is largest. Plus, the leading brewers by revenue in Australia are still Asahi Holdings (AU$3.1 billion), Lion (AU$1.8 billion), and Coopers Brewery (AU$187 million).
It was also noted that, in response to this growth in craft beer production and consumption, some state governments have thrown support behind the beer sector.
One example can be seen from the Western Australia Government which has announced a new strategy to grow the state’s craft beer sector, create jobs and promote the industry’s “paddock to pint” tourism experience. Added to this, Australia’s drinks industry associations recently welcomed plans to crackdown on unfair trading affecting small businesses in a bid to help the inpendent craft beer sector to grow.
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Plus, the research added that all eyes should be on Western Australia since it is considered the birthplace of Australia’s craft beer sector, with the establishment of a handful of now breweries in Perth in the 1980s and 1990s.
Added to this, it flagged that the inaugural Western Australian Craft Beer Strategy brings together all parts of the craft beer supply chain to drive forward a unified and sustainable industry.
The industry-led strategy has big aims to boost production, with the goal of tripling either the volume or value of locally produced beer over 10 years, according to the researchers. Plus, it also purportedly makes efforts to improve supply chain integration, in a bid to include those that produce homegrown barley, hops and malt, and loop in the local businesses that provide packaging, distribution, and retail services.
Overall, the Australian beer sector was reappraised by the new research. Its findings illustrated how there were now more than 120 breweries across the metropolitan area and regional WA, representing 20% of the national industry.
Speaking about its importance, Agriculture and Food Minister Jackie Jarvis said: “Our craft beer industry uses premium ingredients grown in the state’s agricultural sector and it’s that unique WA ‘paddock to pint’ experience that an increasing number of customers are drawn to. It’s also a major draw card for tourists with more than 120 breweries across the state, half of which are in our regions.”
Jarvis explained: “The inaugural Western Australian Craft Beer Strategy will lay the groundwork for industry, government and other stakeholders to collaborate and shape the future of the craft beer industry.”
Looking back at the figures from a few years ago, the researchers observed how beer contributed an estimated AU$648 million to the WA economy in 2020-21, directly supporting around 967 full-time jobs and indirectly supporting more than 4,000 jobs across Western Australia.
To amplify these strides forwards, an industry-led strategy was then facilitated by the Department of Primary Industries and Regional Development as a partnering initiative with the Independent Brewers Association, Western Australian Brewers Association and Southwest Brewers Alliance to assist the sector.
A key takeaway from the research was the fact that new strategic priorities have been identified to assist in beer’s success. These are: industry leadership, brand awareness, market access and export opportunities, supply chain management, and regulation.
Meanwhile, the Australian beer market is still considered one of the most restricted globally, with two foreign-owned corporations, Lion (Kirin) and Carlton & United Breweries (Asahi), largely dominating beer supply. Additionally, two large companies dominate the retail beer sector, the researchers stated.
Analysts also hinted that, along the way, mergers, acquisitions, and regulatory factors have also played a part in shaping the market structure of the Australian beer sector that we see today.
Drilling down deeper into this, it was suggested by the analysts that, as of 2024, publicly available data indicates that Lion holds a 33% market share, CUB commands 50%, major retailers Coles Group and Endeavour Group control 5%, Coopers (a family-owned independent) also holds 5% and Good Drinks Australia, an ASX-listed independent, has 1.25%.
The remaining 5.75% of the market is shared by various independent breweries, according to the data, however, this independent sector figure is expected to continue to grow.
Interestingly, back in 2019, AB InBev (then owner of Carlton and United) described the Australian beer market as one of the most profitable worldwide, with a high value per hectolitre consumed.
However, at that time, AB InBev and Lion Nathan together held over 80% of the market, both in volume and value.
At the time, the Australian beer market was highly consolidated, with strong retailer relationships and modern trade structures giving both companies a competitive advantage. But, irrespective of this, the Australian beer sector remains “high profitable but also highly competitive” even though analysts are confident that 2025 will be “another positive year”.
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