Research has confirmed what you may have already suspected as a hospitality business owner: cider and craft beers have become our national favourites.
As more and more Australians find a favourite in craft beer and ciders, we are also seeing an upward trend in alcohol consumption. Thanks to a combination of factors - such as the alcopop tax and growing number of local producers - cider and craft beers are truly changing the Aussie alcohol landscape.
In this blog, we take a look at the latest research, and explore why and how you can make the craft beer and cider trend work for you.
Alcohol consumption is on the rise for the first time in ten years
Australians aged between 22 to 52 years ago (i.e. Gen X and Gen Y) are pushing up our average national alcohol consumption as they shift their drink preferences to boutique options.
“The amount of pure alcohol consumed by each Australian over 15 years of age has increased from 9.52 litres in 2014-15 to 9.70 litres in 2015-16,’ said Mr James Thomson, IBISWorld Senior Industry Analyst.
This number is only expected to grow, with Thomson adding that research shows per capita alcohol consumption is expected to reach 9.72 litres in the 2017 - 2018 period.
For craft beers and cider, it was great case of timing
Gus McAllister has worked in hospitality for over a decade, and knows better than most about the perfect storm that gave rise to our craft beer and cider mania. As the owner of East Melbourne bar and eatery Tippler + Co. he has watched with a keen eye as the craft beer and cider trend begun to emerge.
“I was working in a bottle shop in (inner city Melbourne) Lygon Street at the time,” says Gus. “We went from stocking one cider to stocking 30 within twelve months.”
It was around this time - 2008 - that the Australian Government also introduced the infamous ‘alcopop tax’, driving prices for high alcohol, sugary beverages such as Vodka Cruisers up by 70%. A whole market of drinkers who wanted something pre-packaged, sweet, or trendy were now left looking for a replacement.
At the same time, the Australian economy was ripe for international imports.
“Our dollar was high, so ciders like Rekorderlig were super cheap, as were international beers,” says Gus. “Then all of the sudden our local market took off.”
Australians are seeking a vastly different drinking experience.
After a long standing affinity for stalwarts like Carlton Draught or Coopers, ‘standard’ beer drinking in Australia is actually at a record 65 year low. Alongside its decline, the Australian craft beer market is flourishing.
“Changing consumer tastes, and the shift from quantity to quality have seen the craft beer movement flourish,” reported Deloitteearlier this year.
Once an anomaly in the standard pub, brands such as Stone & Wood, Pirate Life, 4 Pines, and Little Creatures are now regular players in the craft beer game. Australia currently boasts over 150 microbreweries, which is expected to grow by 5% over the next five years.
In fact, this affinity with boutique beer runs deeper than just making an interesting choice at the pub: more and more average Australians are getting their hands dirty as they experiment with backyard breweries and low-run ranges themselves.
“The Australian craft beer market is being driven by passionate craft beer makers and home brewers, together with more sophisticated beer drinkers and consumers who are demanding a more boutique, unique, and premium product,” says Deloitte.
With a market value currently worth $160 million, the craft beer industry is worth your attention as a venue owner.
Alongside craft beer has been the rise of sweet ciders
Perhaps more surprising than the rise of crowd favourite craft beers has been that of its sweeter cousin: cider.
As reported by Smart Company, cider has “bucked the trend to become one of Australia’s top export industries,” recording 11.4% growth across the sector to be turning over $309.7 million in revenue this year.
While cider has been on the market for decades, it was never a serious contender for Australia’s top drop - until now. Our warm climate and increasing desire to find an alternative to heavy alcohol in the summer has seen cider rise in popularity over the past five years.
IBISWorld predicts revenue will grow at 5.5% over the next five years to $404.4 million by 2021. If there was ever a trend to embrace with summer about to begin - this is it. The Gen Y and Gen X market are seeking out memorable experiences to accompany their drinking.
Creating new experiences will attract new customers
This means moving beyond the traditional pub format and into innovative experiences such as beer tastings, brewing lessons, production tours, and chef/brewer one-on-ones where consumers can learn about the process from the creators themselves.
Gus McAllister says that whilst it is hugely tempting for smaller bars, restaurants, pubs or clubs to align with the bigger alcohol brands and the extensive benefits they offer in return for your taps; it’s also critical to take note of what your customers are actually looking for.
With an extensive selection of local craft beers and ciders, he says that the average customer is looking to try something new, and something different with their beers or cider.
“I think that there is a certain market who just want new things,” says Gus. “Most venues you go in and there’s something new - and a large portion of your clientele will have that, every time.”
Gus also notes that the experience of ‘drinking to get drunk’ is not the case for most people, making beer and cider - much lighter than spirits or wine - a great option to invest in.
“It’s all about creating a sustainable community. The easiest way to lose a customer is if they drink too much and are too embarrassed to come back.”
With summer on the horizon you should start exploring your options when it comes to increasing your craft beer and cider offering. With research proving just how strong this trend really is, this is one sure bet that is bound to bring you great returns.