IBISWorld Press Release
FOR IMMEDIATE RELEASE |
07-Nov-2012 |
Australians are drinking less but spending more
As the Christmas season approaches, industry research analysts at IBISWorld forecast Australians will fork out $33 billion on alcoholic beverages in 2012-13, with premium drinks increasingly selected over traditional beers.
IBISWorld General Manager (Australia), Ms Karen Dobie, said Australia's alcohol spending is expected to increase by 20.5% over the next five years to reach $39.9 billion by 2017-18 – with the trend towards premium beverages and rising alcohol prices driving growth.
"While Australian alcohol consumption is expected to fall to a decade low of 9.80 litres per capita this year, down 2.4% from 2011, IBISWorld anticipates the move towards more premium products will see alcohol revenue continue to rise", Ms Dobie 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."
New South Wales accounts for 33.9% of total alcohol spending ($11.2 billion), followed by Queensland (22.4%), which has overtaken Victoria (19.3%) and Western Australia (13%).
Alcohol spending in Australia
| Category | 2011-12
($ billion) | 2012-13
($ billion) | 2017-18
($ billion) | Total growth 2012-13 to 2017-18
(%) | Annualised growth
2012-13 to 2017-18 (%) |
| On-premises: pubs & bars | 15.5 | 15.9 | 18.0 | 13.2 | 2.8 |
| Liquor retailers | 16.8 | 17.2 | 19.9 | 15.7 | 3.0 |
| Total | 32.3 | 33.1 | 39.9 | 20.5 | 3.9 |
On-premises versus at home
In 2012-13, IBISWorld anticipates on-premises alcohol consumption will increase by 2.6% compared to last year, to account for almost half of total alcohol spending (47.6%).
"On-premises consumption – in pubs and bars – has experienced a resurgence over the past year, as consumer sentiment and disposable income has increased and more Aussies opt for a night out on the town," Ms Dobie said.
Changing tastes
"Once a nation of beer drinkers, beer consumption has declined by 15% over the past decade to now account for 37.1% of total alcohol consumption, while wine and spirits have grown in popularity to account for 25.3% and 17.9% of alcohol consumption respectively", Ms Dobie said.
"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 in particular has grown in popularity and is now the outstanding performer in this segment, accounting for 7% of total alcohol consumption, while craft and boutique beers have grown to account for 5% of total production.
Looking towards 2017-18, IBISWorld forecasts this trend will continue – tipping beer to fall to 32.5% of total alcohol consumption, wine to rise to 29.6%, and cider to increase by a further 13% per annum to account for 12.9% of total consumption.
Australian alcohol consumption forecasts
| Alcohol | % share by value | CAGR*(%) |
| 2012-13 | 2017-18 |
| Beer | 37.1 | 32.5 | -2.6 |
| Wine | 25.3 | 29.6 | 3.2 |
| Spirits | 17.9 | 15.2 | -3.2 |
| Cider | 7.0 | 12.9 | 13.0 |
| RTD | 12.7 | 9.8 | -5.1 |
*CAGR: Compound annualised growth rate
Fine wine
"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", Ms Dobie said.
"Australian wineries have responded to this trend by rebranding themselves as premium to keep up with the resurgence of Old World wines", she added.
White wine continues to dominate, forecast by IBISWorld to account for over 68% of total wine consumption in 2012-13, with female drinkers driving consumption. However, red wine has continued to grow in popularity to account for 31% (up from 24% in 1997-98).
RTD trends
"Ready-to-drink beverages account for nearly 64% of spirits revenue, with producers developing new products to capitalise on changing tastes and preferences – such as the recent trend of RTD cocktails targeted at female drinkers", said Ms Dobie.
Across the categories, demand for top-end products has led to heavy competition from European and US imports – particularly when it comes to pure spirits. "To combat this trend, IBISWorld expects more Australian manufactures to launch premium spirit products in the coming years", Ms Dobie said.
A global comparison
Australia's alcohol consumption per capita is expected to drop to 9.8 litres after a steady incline for almost a decade, peaking at 10.6 litres in 2006-07.
| Country | Consumption in 2012
(litres) |
| Australia | 9.80 |
| UK | 11.75 |
| US | 8.61 |
| China | 5.20 |
| Thailand | 5.59 |
"Australia's alcohol consumption has slowed down in recent years as Australians become increasingly aware of the dangers of binge drinking", Ms Dobie said. "The rising popularity of high value products such as cider, RTDs and premium beverages indicate that the industry will not be heavily affected by more sensible drinking patterns."
For more information on these, or any of Australia's 500 industries, log onto www.ibisworld.com.au, or to keep up to date with IBISWorld activities follow on Twitter.
IBISWorld reports used to develop this release:
H5720-Pubs, Bars and Taverns in Australia
G5123-Liquor Retailing in Australia
C2182-Beer and Malt Manufacturing in Australia
C2183-Wine Manufacturing in Australia
C2184-Spirit Manufacturing in Australia