Increase in alcohol consumption for the first time in nearly a decade

New IBISWorld research has shown that the amount of alcohol consumed per person in Australia each year has increased for the first time in nine years, bucking a trend that has seen a steady decrease since 2006-07.

“The amount of pure alcohol consumed by each Australian over 15 years of age has increased from 9.52 litres in 2014-15 to 9.70 litres in 2015-16,’ said Mr James Thomson, IBISWorld Senior Industry Analyst. ‘IBISWorld research shows per capita alcohol consumption is expected to reach 9.72 litres in 2017-18. It’s an interesting result as we are seeing lower consumption rates among young adults, those aged 15-24.”

Burgeoning beer

IBISWorld research found beer consumption was the driving force behind the recent rise in per capita alcohol consumption.

“Beer consumption is expected to rise from 3.76 litres per capita in 2014-15 to 3.86 litres in 2017-18. IBISWorld attributes this growth to the rising popularity of craft beer,” commented Mr Thomson.

The Australian craft beer production industry is expected to grow at an annualised 9.7% over the five years through 2017-18, outperforming the beer manufacturing industry, which is expected to grow at an annualised 2.1% over the same period.

“Craft beer’s popularity has been driven by consumers seeking variety and quality. An increasing number of small-scale craft breweries are opening to take advantage of changing consumer tastes, contributing to the expanding range of beers available in liquor retailers. Consumption of low-strength beer remained unchanged in 2015-16, while mid- and full-strength beer consumption grew,” said Mr Thomson.

Cider’s success

Cider’s popularity has increased strongly, with per capita consumption expected to grow at an annualised 13.3% over the five years through 2017-18. However, this segment still accounts for a small portion of total alcohol consumption.

“Cider has grown in popularity due to its image as a refreshing alternative to beer, aided by savvy marketing and promotion. Conversely, per capita spirits and RTD consumption has declined over the past five years,” said Mr Thomson.

Per capita wine consumption is expected to decline marginally over the five years through 2017-18. According to IBISWorld research, the declining popularity of fortified wines, particularly among younger consumers, has contributed to this decline. Wine consumption as a share of total per capita alcohol consumption has increased over the past decade, and is expected to represent 37.7% of total per capita consumption in 2017-18.

“Despite a decline in per capita wine consumption in Australia over the past five years, IBISWorld research highlights the growing popularity of Australian wines abroad. Strong export growth, particularly to Asia, is expected to drive the wine production industry’s performance over the next five years,” said Mr Thomson.

Alcohol’s future fortunes

IBISWorld’s research found rising health consciousness, increased taxation of alcohol and anti-alcohol advocacy have contributed to a long-term decline in per capita alcohol consumption over the past decade – and that these factors will continue in the future.

Despite a long-term decline in alcohol consumption, a rising consumer preference for quality over quantity has contributed to consumers spending more on alcohol. Many participants in the sector have enjoyed revenue growth, tapping into the trend towards the ‘premiumisation’ of alcoholic beverages.

“Consumers are increasingly seeking artisanal and high-quality beverages, while also looking for authentic experiences, such as visiting small breweries, distilleries and cellar doors. This trend has contributed to strong revenue growth for many small-scale alcohol producers, such as craft breweries and boutique wineries,” said Mr Thomson.

“IBISWorld expects per capita alcohol consumption to continue its long-term trend and decline over the next five years. Increasing health consciousness and lower consumption rates among younger consumers are expected to contribute to this decline,” concluded Mr Thomson.

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