Premium drinks are driving growth in Australia’s liquor industryPosted on March 28th, 2018 in Blog, News
Australians may be drinking less alcohol every year, but the drinks industry is still going from strength to strength, growing by an average of 3 percent annually over the last five years. This is largely thanks to a shift in consumer preferences from quantity to quality.
Good value used to be the most important criteria when it came to drinks, but many of today’s bar patrons and liquor store customers are happy to pay more for beer, wine and spirits that are more refined. ‘Premiumisation’ is a major factor helping the liquor industry and retailers enjoy continuing revenue growth.
Why are premium drinks popular?
Australians have become increasingly responsible drinkers over the last few years, particularly young adults who drink less each month on average, though are still more likely to visit bars than their parents.
While the majority of young adults still enjoy alcohol, buying fewer rounds means their money can go further, leading to more customers choosing higher quality products. Higher discretionary household income also means there’s more money to go around compared to a few years ago.
There are other factors at play besides economics. Young adult drinkers are more concerned with their health and more likely to choose healthier options such as low-calorie and gluten-free beers, which tend to cost more. They’re also eager to try something new, liking to try new releases and locally brewed or international drinks just for the experience, not caring too much about the price.
Which drinks are the most popular?
The premiumisation trend is driving growth across the board, from beer and wine to spirits and recently even premixed drinks.
Growing at 8.4 percent per year, the thriving craft beer market is partly responsible for creating ever more demanding consumers, who expect more from their beer as a result.
No longer just the domain of serious beer fanatics, craft beer is now mainstream. Many local breweries have won prestigious awards, while major brands have launched their own premium lines with a craft-like emphasis on the production process, ingredients and taste.
Wine drinkers are upscaling their preferences too. Many customers who used to be satisfied with a $10 bottle now tend to choose a $15 or $20 wine at the bottleshop instead.
Established producers in esteemed wine regions such as the Barossa Valley, Margaret River and Yarra Valley are benefiting the most from this trend. Premium imports such as Champagne are also on the rise.
With young adults drinking more spirits than previous generations, the demand for hand-crafted uniqueness has spurred on Australia’s small but significant craft spirits industry. Several regions have produced acclaimed gins, rums, vodkas and whiskies.
The thirst for creative drinks has naturally impacted on cocktails too, with many licensed establishments having to expand beyond the familiar staples to satisfy customer requests. Readymade premium cocktails are one of the latest trends, saving time for bar staff and for customers enjoying instant premixed drinks at home.
Learn the latest industry trends
Find out what’s happening in the industry in 2018 and beyond by attending The Drinks Industry Show. This year’s unmissable event is taking place at Darling Harbour, Sydney on 18-19 June 2018.