Interesting speculation in The Age that Fosters could lose the Corona and Stella licences.
To me the most important part of this article is this, tucked away right at the very end:
When Foster’s releases its interim results next month it will show that the margins and profits of its beer business have held up, while volume has fallen. The question for the company is, how long can it keep letting market share go before it has to start buying volume?
In beer economics, less production volume means less recovery of production fixed costs. It’s all to do with losing or winning scale economies.
It pretty much sums up the big brewing industry – it’s a unit cost game. I just hope that the quest for volume doesn’t see the business pressuring Matilda Bay to tinker with beers like Dogbolter or Alpha Pale Ale as they have in the past with Redback. Big Helga, which I enjoyed when it was launched, was obviously a style selected to appeal to a wide audience but was still a pretty good, if undemanding, beer. Their competition in the ‘big craft’ market, Lion Nathan’s James Squire, has seemingly toned down the flavour of its major brews – the Amber and Golden Ales – in the search for market share and the beers have suffered greatly – though their popularity has grown…the commodity paradox.
The other interesting element to this speculation is what will happen to XXXX’s intended ‘Corona killer’ Summer Bright Lager if Lion does get the Corona licence in Australia? While the brewery officially denied that SBL was going after Corona when it launched, it looks, quacks and waddles like a duck. Many Lion Nathan affiliated pubs in Brisbane have SBL on the same hig value shelf, right next to Corona in their bar fridge facings and that wouldn’t happen without the brewery’s blessing. They are going head to head. With two beers looking exactly the same and tasting almost identical but one selling as low as $4 a bottle compared to Corona’s $7+, there is only so far exotic goes before the beer “from where you’d rather be” changes to “I’ll holiday at home and save my money.” Or in the case of these beers, drink the local and get more value for my money – which, means drink more for the same amount.
I’ve seen nothing official yet but the reports I’m hearing from pubs is that the Summer Bright Lager is kicking goals, and doing a straw poll myself at pubs that had both – the market share was close to 50-50, although the XXXX was still being heavily promoted. I wonder whether Grupo Modelo would give Lion Nathan the Corona licence while they were competing directly against it, or would Lion kill off what seems to be a successful launch in order to get the “jewel in the crown in the foreign premium beer category.”
No matter what, interesting times ahead in the world of uninteresting beer.
“Their competition in the ‘big craft’ market, Lion Nathan’s James Squire”
Aren’t you forgetting Little Creatures?
LN share has crept past 43% now……
Hadn’t overlooked them John, though they’re still not in the same boat as JS. If Little Creatures beers ever come to be brewed out of LN’s Sydney, Brisbane or South Australian breweries you’d have to worry, but they’re holding the line flavourwise (IMHO!)
‘No matter what, interesting times ahead in the world of uninteresting beer.’
ROFLMAO great comment – my sentiments exactly!Nice work Matt
Interesting ‘kids these days’ drink beers like Corona. When I was young I was told that beer was an acquired taste but a taste work acquiring (like, say, the taste of red wine or an olive). Say what you like about XXXX Bitter but it does taste like beer. When I’m asked about Corona in my own tastings I say it’s a great beer to have if you don’t like the taste of beer. I wonder if Australians will move away from beer as it has been known for a long time in the next couple of generations. I had thought things were on the up from the 70s, but you’d have to see the craft vs absolute piss comparative stats. It may be that we end up looking back at the 70s as the golden age of beer appreciation….
“beer was an acquired taste but a taste worth acquiring”. Exactly David, great call. Though palates have been skewed a bit further towards sweet since then and no one is waiting for the taste to be acquired. In the name of marketing Brewers, wine makers and RTD makers are chasing them are locked in an arms race to get to the palates first and their weapon of choice is sweet, low-flavoured drinks of around 5% alcohol.
Australians have moved from “beer as it has been known”. Even XXXX has skewed considerably over the years:
Of course the “challenging beer” disappeared in under a year!
Low carb (which has the same flavour profile but the added ‘health benefits’ is well on the way to becoming the norm for beer, but the market is segmenting massively so, I think beer’s glory days are still ahead.
Sorry, a taste worth acquiring, not work.
“there is only so far exotic goes before the beer “from where you’d rather be” changes to “I’ll holiday at home and save my money.””
Love it, spot on. I see this beer more and more replacing Corona in the ice tubs on top of bars, and in eskies at parties or barbeques. It’s not just a beer, but also a symbol, and an attitude. Marketing wise, I don’t think XXXX could have done anything better than put “Summer” in the name of one of it’s beers.
Given that the tanking economy has done nothing to quell the boom in craft beer consumption worldwide (quite the opposite) I think the future is… ahem… ‘bright’ for full-flavoured beers. I am sure that Australia’s capacity for craft brewing still has a long way to go before it reaches the glut of the wine industry. It’s a bit paradoxical that ‘uninteresting’ beers still command such slavish devotion from a majority of punters but I guess that is a trend reflected across many industries. I for one will continue to offer friendly advice to those poor souls that order Corona while standing next to me at the bar.