E-Malt. E-Malt.com News article: Australia: Mid-strength beer expected to grow to about one third of total beer market

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E-Malt.com News article: Australia: Mid-strength beer expected to grow to about one third of total beer market
Brewery news

The managing director of Heineken's beer business in Australia says mid-strength beer will likely grow to about one third of the total A$14 billion-plus beer market over the next decade, driven by an increasing focus on health and fitness, The Australian Financial Review reported on January 17.

Mid-strength beer commands about 20 per cent of the total beer market in Australia. However, yoga-loving, gym fanatics who still enjoy a beer are shifting their tastes to low-carbohydrate and lower alcohol beers. Heineken Lion managing director Andrew Campbell is convinced that a sharp jump in sales of a new mid-strength Heineken 3 version since late August is hard evidence of that trend.

Mr Campbell said there had been no cannibalisation of the traditional Heineken brand. Total volumes across the two main brands in Australia in the three months ended December 31, 2016 were up more than 30 per cent.

"We're not seeing any cannibalisation," he said.

Mr Campbell has been at the helm of Heineken Lion since late 2014. It is a joint venture vehicle set up in 2004 between the Dutch brewer and Lion, which makes XXXX Gold, Tooheys and West End, and is owned by Japan's Kirin Corporation.

He estimated that more than 250,000 people had thus far trialled the Heineken 3 brand since late August in Australia, with the company about to accelerate its push further with an old-school marketing campaign. Customers who buy a six-pack or a 12-pack and don't like the beer receive their money back through an online redemption system.

"The redemption mechanic is all digital. It's very new age," he said.

Heineken this year relinquished beer pourage rights at the Australian Open tennis tournament in Melbourne after 20 years. Those beer rights are now held by Coopers Brewery, with Heineken preferring to focus on a global sponsorship deal with the Formula One racing car series held at various tracks around the world.

Mr Campbell predicted there would be "no impact whatsoever" in Australia from the end of the association with the Australian Open.

Mr Campbell expects Heineken 3 will displace Peroni Leggera as the No.1 player in the international premium mid-strength beer segment in Australia and signalled that move would likely happen later in 2017.

Heineken 3 had already grown in the first four months to be just over half as big as Peroni Leggera.

He said the increasing focus on fitness and a healthier lifestyle would continue to drive the increasing total share of mid-strength beer, which would likely claw away another 10 percentage points of the market over time.

"Consumers are looking to be a little bit more health-conscious," he said.

Supermarket giants Woolworths and Coles make up the lion's share of the 65 per cent of Heineken which is sold through liquor retailing chains. Mr Campbell said independent and smaller retailers had experienced strong demand from 12-packs of Heineken 3, which had been selling for between A$27 to A$30.

16 January, 2017

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