New beer segment emerges in Australia

In the past decade, global craft beer sales have trebled, according to IWSR data – and it is generally the longstanding brands in the mainstream segment that have borne the brunt of this rise. In markets across the globe, these brands have been on the retreat as the craft revolution has gained momentum.

The big brewers’ response to the threat posed to their pillar brands by craft players has been three-fold: to buy them, to build their own, or to collaborate with them. It is a strategy that has been well executed, and the major global players are now discreetly pulling the strings of some of the most popular and well-known craft propositions around the world.

Australia, however, has shown that there is a fourth way to defend volumes. Here, the IWSR has been tracking the emergence of a new segment, known within the industry as ‘contemporary beer’. Contemporary beer brands are modern beers, launched by the major brewers, that are sculpted and massaged to incorporate the latest contemporary consumer trends. Importantly, they are priced competitively when compared to the mass-market beer brands, and well below the super-premium craft beers on offer. This gives them a widespread appeal – a fact borne out by their strong level of sales.

As in other countries, the craft segment in Australia is vibrant, but the price point and positioning of many craft beers to target ‘purists’ and ‘hipsters’ had given them less traction with a sizeable part of the Australian market. A vacuum had opened up for a product that would appeal to consumers tiring of the traditional beer brand offerings but who felt disenfranchised by the craft movement. As a result, the ‘contemporary beer brand’ has successfully been able to occupy this newly vacant middle ground.

In 2019, the flag-bearer of contemporary beers in Australia, Great Northern Brewing Co, overtook the leading mainstream beers Carlton and Castlemaine – having being introduced to the market only nine years earlier.

Rekindling the distinctive Marlin logo from the now extinct Cairns draught brand to add a hint of heritage, Australia’s Great Northern lager is relatively aligned in price with mainstream beers but costs considerably less than existing craft options. The beer has a more gender-neutral brand image than some of its rivals and, as well as a 4.2% ABV ‘original’, is available in a mid-strength 3.5% ABV format. The mid-strength segment is currently very much in vogue among younger LDA drinkers in the market.

Following in Great Northern’s footsteps are other brands within the contemporary beer movement. Lion’s 2017 launch, Iron Jack, saw sales jump last year and continues to gain momentum. Again, the product is a straightforward “modern Australian lager” aimed at “down-to-earth Aussie blokes”. The beer is preservative-free, and the mid-strength variant has 30 per cent fewer carbs than regular full-strength beers, making it a good pitch for today’s wellbeing-conscious drinker.

Also included in Lion’s ‘contemporary’ portfolio is Furphy, which first featured six years ago. The popularity of this self-styled Refreshing Ale has prompted a sister brand – Furphy Crisp Lager, to be introduced in 2020. The response of Carlton & United Breweries (CUB) to the rapid progress of Furphy? Another uncomplicated, easy-drinking beer: Frothy.

“The speed with which these new contemporary beers have established themselves has demonstrated that although many beer drinkers are looking for alternatives to the big-name brands that have historically dominated the marketplace, this demand is not always serviced by craft products,” notes Tommy Keeling, IWSR’s research director for Asia-Pacific. “The main players can respond to the rise of craft not only by joining them, but by possibly also launching new products that respond to the latest consumer needs and that can be scaled up quickly,” Keeling adds.

In a post-Covid world, the beer market will see much upheaval, and we are likely to see the rise of contemporary beers elsewhere too, particularly in what is likely to be a price-sensitive era.

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