New Zealand’s beer sales made return to growth in 2002 after many years of stagnation and decline, according to research from analysts Canadean.
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Canadean described a rise of almost 3% in volume as a key “psychological threshold” for the country’s two main producers who will be seeking to exploit the opportunity by investing in their key premium brands.
The country’s beer market is mature by world standards with a high per capita consumption of 84 litres and a brewing industry that is relatively concentrated. Lion Breweries’ top three brands account for a quarter of all consumption and Dominion Breweries top three account for a fifth. “Despite this, last year saw developments that herald the beginning of an extended period of change for the industry as a whole in which premium and super premium products will play a major role,” says Canadean.
Lion Breweries’ premium Steinlager brand regained lost ground with more than 15% volume growth in domestic consumption and made a major contribution to the 5.3% increase in exports. Lion’s other major brands all experienced growth with the exception of the mainstream market leader, Lion Red. The company addressed this threat by opening a small brewery in Wellington with the aim of supplying tap beer on premise to local customers, although Canadean said it believes that further attempts to restore tap beer volumes will face difficulties.
Dominion Breweries’ volumes were also up but market share was down and the company has now announced a commitment to building a stronger, long-term competitive position through improved operational efficiencies and the promotion of value through its brands. The importance of the super-premium image was emphasised by the fact that Heineken (produced under licence by DB) enjoyed almost 12% volume growth, due in part at least to a strong programme of media advertising centred on reinforcing the brand’s position as the leading premium global beer.
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By GlobalDataGlass bottling, used principally for premium beer, is now the main packaging growth area while the rise in both imports and exports is seen as reflecting an increasing two way traffic in premium products.
Looking to the future, Canadean predicts that beer consumption will rise by about 9% between the end of this year and 2008. Budget brands, which lost almost 10% volume last year will benefit least from this anticipated growth but expansion of the premium and superpremium segments will maintain momentum leaving brewers with the challenge of how best to fuel sustainable growth in the large mainstream segment.
