Aussies still keen on premium booze

Posted by Daniel Palmer on 10th June 2009

Despite many being confronted with greater financial pressures, Australians refuse to sacrifice their taste buds when it comes to their choice of alcohol. Strong volume sales of imported and domestic premium beer, premium brand spirits and bottled wine over $10, contradict the belief that Australians could turn to cheaper booze in times of struggle.

Imported premium beer and domestic premium beer enjoyed significant volume growth of 15.3 and 18.6 per cent respectively for the quarter to March 2009, while premium spirits increased by 21.3 per cent, according to the latest Nielsen report. Volume sales still increased for the cheaper, more traditional beer and spirit segments (mid-strength and full-strength beer; value and standard spirits), however growth was modest when compared to their premium counterparts. The only category within beer and spirits to realise a decline in volume was low-strength beer (down 9.2%).

When it came to wine, the overall category continued to experience volume losses driven by long term declines in the value-end of the market (cask wine down by -5.1%, and bottled wine under $10 down by -5.6%). The cask wine decline can be linked to strategic exits by some major players – including Foster’s.

Consumer demand for more expensive wine increased (bottled wine priced $10-$20 up by 5.6%, and bottled wine priced over $20 up by 4.1%), bucking the category’s downward sales trend.

Peter McLoughlin, CEO of Pacific Beverages, noted that, despite the worsening economic climate, consumers were still prepared to pay for beer brands which offered superior quality. Pacific Beverages has reported that brands like Peroni Nastro Azzurro, Grolsch, Miller Genuine Draft and Bluetongue were growing well ahead of the category as a result and appeared relatively unaffected by the downturn.

Diageo, the world’s largest alcoholic beverage company, is also keen to capitalise on growth in the sector, with the launch of new products such as premium rum – Bundaberg Reserve.

“The trend towards more premium products in the alcohol category is very welcome news for Diageo. We intend to leverage our … portfolio of premium spirits brands to meet the continued consumer demand for something more special,” Sally Smallman, Head of Consumer Planning and Communications, advised.

Michael Walton, Executive Director of Nielsen Australia’s Liquor Services Group added that, contrary to public opinion, financial pressures Australian households have been burdened with this past year, have not necessarily had a flow-on effect on their alcohol consumption, and the trend is prevalent across liquor categories.

“Instead of trading down when it comes to buying liquor, Australian consumers are becoming more sophisticated and are choosing high quality spirits, premium wines and a wide and growing variety of premium or artisan-style beers,” he said.