Big beer moves as markets change
While big brand mass market beer consumption in the US and Australia has been static or in decline, craft beers and boutique breweries are gaining additional strength.
The Western Australian-based Swan brewery has announced plans to shut down by March 2013 its operation at Canning Vale.
Lion, owned by Japanese brewery Kirin, said the Swan Brewery had been operating at half of its 300 million litre production capacity.
Lion has reported that Swan and Emu beer sales have fallen from 30 per cent to less than 10 per cent over the past ten years.
On closure of the Swan Brewery in 2013, kegged beers will be brewed at the West End Brewery in South Australia and bottled beers will be brewed at the Boag’s brewery in Tasmania – both owned by Lion.
The move comes at a time when consumer preferences in beer in Australia and the US have favoured the growth of craft beers and boutique breweries. Premium South Australian Brewery Coopers recently announced a 17 per cent gain in annual profit, well above earnings of larger companies such as Lion and Fosters. Coopers announced an annual profit of $26.3 million for the 12 months to June 30 2012, up from $22.4 million in the previous financial year.
There are also now around 200 microbreweries in Australia, and more emerging each day as market trends sway towards premium, craft beer. The emerging popularity of boutique beers provides hope for the Australian beer industry, which experienced a 50 year low-point last year.
Craft beer sales in the United States
The Australian trend towards boutique breweries is similar the story in America, which according to the US Brewers Association, reported a 12 per cent increase in craft beer sales in the first half of 2012. The craft beer increase was significant in the United States as overall beer sales continued to drop this year.
Director of the US Brewers Association, Paul Gatza, said that the amount of craft breweries in the United States was continuing to grow.
“Beer-passionate Americans are opening breweries at a rate faster than at any time since the day Prohibition ended for the beverage of moderation. There is nearly a new brewery opening for every day of the year, benefiting beer lovers and communities in every area across the country,” Mr Gatza said.
In other Kirin issues
The announcement by Lion comes shortly after the release in Japan of the Kirin 2012 annual report which mentioned the impact of decreased sales of Lion in Australia. Kirin reported that Lion had experienced a 4.1 per cent sales decrease from 215.9 in June 2011, to 207.1 in June 2012.
Nonetheless, the Kirin report stated that “while subdued consumer sentiment and deep retailer discounting on white milk continues to impact the business, Lion beverages continues to perform well.”