11 August 2017
NZTE’s Sydney team / Australia
Australia is often the first export market New Zealand craft beer brewers look to enter. Here are four things to think about if you’re thinking about taking your product across the ditch.
1. Australia is not just a bigger New Zealand
A common misconception about Australia is that it’s just a ‘bigger New Zealand’. Because Australia is our ‘cousin’, speaks our language and is so geographically close, it’s easy to underestimate the differences between our two countries.
If you’re looking to sell your craft beer in Australia, what sells your product here may not work over there. So you’ll need a well-researched and planned approach to entering the Australian market, to ensure you’re not caught out.
Unlike New Zealand, Australia’s six federal states and ten territories mean there are essentially 16 different markets to think about! Each state is unique, with its own demographic profile, diverse cultures, and varying tastes. Craft beer varieties that may sell well in one state might have absolutely no chance in another.
Here’s one example of state differences when it comes to beer. In New South Wales, leagues clubs (a little like rugby clubs in New Zealand) are hugely popular with beer buyers. New South Wales has 80 leagues clubs, totalling millions of members. However, many of these clubs have exclusive tap contracts with big mainstream beer brands, which means craft brands are all seeking a slice of a smaller pie - so New South Wales is a tough market to crack. By contrast, leagues clubs are much less popular in Victoria, and beer buyers greatly prefer small bars, clubs, cafes and restaurants, which are often better suited to craft beer brands. It’s important to figure out which state you should sell in and the right approach to succeed there.
2. ‘Brand New Zealand’ doesn’t really resonate in Australia
Research has shown that while Australians feel positively about New Zealand, ‘Brand New Zealand’ doesn’t carry as much weight in Australia as it does elsewhere in the world. It’s critical to put in early work and make sure you’re offering something that will really resonate with Australian customers.
3. Craft beer is flourishing in Australia
Australia’s national craft beer market is worth $388 million, and is growing fast even though Australians are drinking less beer in general – per capita beer consumption has fallen consistently since 1978, by an average of 2% a year. The trend is for consumers to drink ‘less but better quality.’
Boosted by double-digit value growth of 19.2% in 2015, craft beer now accounts for 7% of the beer market – up from 4.8% in 2013. Viewed in comparison, Australia’s craft beer value growth is nearly on par with the often-celebrated United States craft beer market, so the opportunity is huge – if you get your approach right.
4. Craft beer sales channels in Australia are evolving
Australian sales channels for craft beer are changing, with bricks and mortar retail accompanied by new online channels as well as direct and indirect distribution models.
Most Australians buy beer from retail stores, which account for 60% of total consumption, and a few big players dominate off-premise sales in Australia. National Accounts holds 65% of this channel, with the rest controlled by Coles and Woolworths. Woolworths also has a strong presence in online sales via Dan Murphy’s, which holds a 50% market share.
While retail channels are consolidating, the on-premise market (hotels, bars and clubs) is very fragmented, with lots of small, boutique establishments popping up in different Australian states. These outlets are 90% independent, and the largest group in the sector only has 5% market share.
When drinking on-premise, Australians mainly buy their beer on tap, with a 90% draught share versus 10% for bottles and cans. Many establishments have tap and fridge contracts in place with big mainstream players, so it’s often a good idea to think about non-traditional outlets for your craft beer, such as restaurants and cafes.
NZTE Sydney is part of NZTE’s Australia-Pacific team, and can help New Zealand companies enter or grow their business in the region.
If you’d like to find out more about taking your craft beer across the ditch, get in touch with us at nzte.govt.nz/contact or on 0800 555 888.
You can find out more about the craft beer industry in New Zealand by reading the ANZ Craft Beer Industry report.