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Changing habits for Kiwi beer consumers

Tags: Canterbury Christchurch Commercial Hospitality

Consumer habits towards quantities and variety of alcohol consumed in New Zealand has significantly changed in recent years with a rippling effect across the beer production and hospitality industries.

Kiwi Beer Consumption Image

Craft beer sales are now the country’s fastest growing category with sales set to triple over the next ten years. Lower alcohol beer sales follow second.

Appetite for Craft Beers

While overall beer consumption is decreasing, analysis by ANZ reveals that the craft beer segment of the total New Zealand market has grown from nine percent in 2013 to 13 percent of total beer sales. This indicates that consumers are leaning towards quality over quantity and a desire to try a new variety of products on the market.

Lion - Beer, Spirits and Wine (NZ), New Zealand's largest brewer, posted a 21 per cent decline in full-year earnings as the industry adjusts to a market that's seen a rise in craft beers and where people are choosing to drink less.

Sales of light beers have almost doubled since tougher drink driving laws were introduced in December 2014. The laws reduced the legal blood alcohol limit from 80mg to 50mg per millilitre of blood.

DB Breweries managing director Andy Routley said lower alcohol or light beer made up around 24 per cent of total beer sales in Australian supermarkets compared with around 5 per cent in New Zealand, however this had risen from just 1 per cent two years ago.

With a growing range of light beers available, Routley said the category would continue to grow. According to Routley, DB was a leader in the segment with around 70 per cent of the light beer segment.

Effects on the Industry

In February, Lion said sales volumes had fallen 4.4 per cent in New Zealand as the alcohol market declined to its lowest level in 18 years.  Statistics New Zealand said the total volume of pure alcohol sold in the country fell 4.1 per cent in 2015.

The impact of lower sales has had a direct effect on the profitability of most licensed premises and consequently the value of the business at time of sale.

A recent survey by Hospitality New Zealand showed around 80 per cent of hospitality venues reported a drop in sales following the law change - particularly in rural areas.

"Changes to the drink driving legislation, depopulation of rural communities and a lack of capital and capability to deliver to the increasingly demanding requirements of customers are challenges facing many in the industry,” said Peter Harris, Business and Tourism sales specialist with Bayleys Canterbury.

In these times of change for the industry, food and gaming machine revenues have become an important component for hospitality businesses as they cope with new challenges from of these changes in consumer habits.

Contact Bayleys Canterbury Tourism and Hospitality brokers, Peter Harris or Kate Mullins on 03 375 4700 for more information.

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