Drinking Less, But Spending More

Drinking Less, But Spending More

Australians are drinking less alcohol but taking on a 'quality not quantity' philosophy, with spending in pubs and bars on the rise.

Aussies drinking less but spending more in pubs and bars: forecasts

IBISWorld general manager (Australia), Karen Dobie, said Australia's alcohol spending is expected to increase by 20.5 per cent over the next five years to reach $39.9 billion by 2017-18, despite a reduction in the volume of alcohol we're consuming.

"While Australian alcohol consumption is expected to fall to a decade low of 9.8 litres per capita this year, down 2.4 per cent from 2011, IBISWorld anticipates the move towards more premium products will see alcohol revenue continue to rise," she said.

"In 2012-13, Australians are expected to spend $33.1 billion on alcohol – with $15.9 billion being spent in pubs and bars and $17.2 billion in liquor retailers. Looking towards 2017-18, significant growth is expected across both sectors as the retail environment and consumer sentiment strengthen."

NSW is cashing in the most pennies for alcohol consumption, accounting for 33.9 per cent of total alcohol spending, with Queensland sitting at 22.4 per cent and overtaking Victoria which sits at 19.3 per cent. Western Australia accounts for 13 per cent.

Spending in pubs and bars is set to increase with IBISWorld anticipating an increase in 2012-13 of 2.6 per cent on last year, which will mean 47.6 per cent of Australians' total alcohol spending is on-premises.

Beer and cider
While our consumption of beer in general is dropping, Australians are increasingly moving away from traditional full-strength lagers we've preferred in the past, instead going for the premium options.

Dobie said, "Once a nation of beer drinkers, beer consumption has declined by 15 per cent over the past decade to now account for 37.1 per cent of total alcohol consumption, while wine and spirits have grown in popularity to account for 25.3 per cent and 17.9 per cent of alcohol consumption respectively.

"Australia’s beer drinking palate is becoming more sophisticated, with a number of European style beers now being produced on our shores. Traditional full-strength lagers such as VB, Carlton Draught and Tooheys are losing market share in favour of cider and premium beer."

Cider is also enjoying impressive growth outperforming beer, wine, RTDs and spirits with an expected increase of 13 per cent to account for 12.9 per cent of total consumption, up from its current position at seven per cent. Boutique beers are also a growing segment, now accounting for five per cent of total production.

IBISWorld is forecasting that beers will fall to 32.5 per cent of total alcohol consumption and wine will rise to 29.6 per cent.

"Australians are happier than ever to pay a premium for their favourite blend. While Chardonnay remains the most popular drop, accounting for almost half of total wine production, we have seen growth in exotic European wine styles such as Sangiovese, Tempranillo and Pino Grigio," Dobie said

In 2012-13, IBIWorld forecast that white wine accounts for over 68 per cent of total wine consumption, driven mostly by women. Red, however, is becoming more popular, accounting for 31 per cent of consumption, up from 24 per cent in 1997-98.

Ready-to-drink beverages account for nearly 64 per cent of spirit revenue.

There is growing interest in top-end products, which has led to increased competition from European and US imports, and IBISWorld is therefore predicting that more Australian manufacturers will launch premium spirits in the coming years.

If you would like to view the original article by Danielle Bowling (Hospitality Magazine) please click here.