Brewers turn to luxury beer market

Posted by Daniel Palmer on 2nd June 2008

In response to rising production costs some brewers are shifting their business focus to target the potentially lucrative ‘luxury’ market, while many others look to the premium market to drive growth.

Foster’s has recently created Crown Ambassador Reserve lager to kick-start their push into the “luxury” category, according to AAP. The lager, which will be released as a limited edition of 5000, will retail at a price of $60.

The issue with creating such a beer, though, is how to market it considering that it is markedly more expensive than the other options available.

Foster’s solution in this case is to provide the drink in a champagne bottle – rather appropriate given the cost of the beer is more equivalent to that of a bottle of Moet & Chandon.

Luxury beer, which is priced above premium beer, provides a potential new market to brewers, which has not yet been effectively tested. The success in recent years of the premium beer market is likely to have led to the decision by Foster’s with a number of brewers recently indicating that the premium market was providing the greatest impetus to their growth.

Lion Nathan reported last month that much of their recent growth in Australia could be attributed to their attempts to shift consumer preferences toward higher equity premium and national brands. “We have continued to make a very significant investment in our power brand portfolio and we are seeing very strong revenue growth as a consequence,” Lion Nathan CEO, Rob Murray, said. ” This is a very robust Australian result despite poor weather and continued cost pressures from commodity and raw material inputs.”

Asia Pacific Breweries Limited (APBL) has also announced their intentions to capitalise on growth in the premium market via the launch of Tiger beer in India. Tiger has previously only been sold at exclusive outlets in India but, with premium beer sales less than one per cent of the lucrative Indian market, APBL consider that a focus on premium beer sales in the country could prove very profitable.