CUB beer market

New direction for CUB as Aussies drink less beer

September 19, 2019
By Alana House

Carlton & United Breweries is preparing for a new owner, but that hasn’t slowed its drive to innovate in Australia’s evolving beer market.

Australian Bureau of Statistics data shows a change in Australians’ drinking habits, with the balance shifting significantly over time between beer and wine.

“In 2017–18 beer represented 39% of all pure alcohol available for consumption and wine 38.6%,” ABS acting Director of Health Statistics, Robert Long said.

“This is in stark contrast to 40 years ago when beer represented 67.6% and wine 18.6% of pure alcohol available per person aged 15 years and over, reflecting the change in consumption preferences over time.”

Spirits and RTD consumption is also surging – it rose 7% in 2017-18, while beer increased 2.5%.

CUB makes brands including Victoria Bitter, Carlton Draught, Great Northern, Crown Lager and Pure Blonde and holds a 48.8% share of Australia’s $14billion beer market.

But traditional sales are slowing, so the focus has turned to non-alcoholic, low and mid-strength beers such as Carlton Zero, which now account for around a quarter of all its sales – up from just 10% five years ago.

The brewer is also building its credibility in the area of corporate social responsibility, through initiatives such as providing canned water to drought-stricken Australia and expanding its use of solar power at its breweries.  

Earlier this week the company also announced it was moving into the booming canned wine market, with the purchase of Riot Wine Co.

Riding the lower ABV wave

Earlier this year, CUB chief executive Peter Filipovic admitted the company needed to diversify to maintain its beer market dominance.

“VB and Carlton Draught are still the cornerstones of our portfolio and very iconic brands within the Victorian and Australian landscapes,” he told  The Sydney Morning Herald .

“But tastes are changing. Consumers are wanting more. Moderation is a big trend … and we have got to adapt.”

Carlton Zero beer market

Carlton Zero, CUB’s first non-alcoholic beer in CUB’s 180-year history, went on sale in September last year. It’s since sold more than 3.2 million litres in Australia and is one of the company’s most successful launches into the beer market.

The brand is also dominating non-alcoholic beer sales in bottle shops, driving up sales in the category by 14 times.

CUB’s Chris Maxwell said: “We launched Carlton Zero because beer lovers told us they wanted more opportunities to enjoy beer responsibly.

“Research shows the most common reason people drink non-alcoholic beer is because they’re the designated driver, and we’re seeing this predominately in people aged 18-34. We think this deserves a pat on the back, and really shows the moderation message is getting through.”

The CUB-commissioned national online survey of 1000 people this month also found no-alcohol beer is most popular with people aged 18-34, with almost half (49%) saying they would consider drinking a no-alcohol beer at a social occasion.

Here’s the new social ad for Carlton Zero:

CUB dips its toe into canned wine

The canned wine category has gone from zero to hero in Australia – it’s predicted to hit $30million in sales in the next three years.

And CUB has decided to get a piece of the action, acquiring Adelaide-based Riot Wine Co earlier this week.

It’s the first time CUB has expanded into the wine sector since it split off from Foster’s Group in 2011.

Riot Wine Co is leading the keg and canned wine revolution in Australia and is the only company to sell wine exclusively in kegs and cans, with hundreds of venues and retail stores nationwide adopting its innovative model since it launched in 2016.

Riot co-founder and general manager Joe Cook said: “We launched Riot Wine Co to start a wine revolution in Australia by getting venues and consumers to switch from bottles to steel kegs and aluminium cans. Wine consumed this way is fresher and easier plus it’s more sustainable because one keg saves roughly 23,000 bottles from entering the environment. Our kegs prevent wine oxidising and our wine has a fun and fresh taste profile, with less sulphur making it cleaner than traditional wine.”

Cook told the Australian Financial Review that one of the main target markets for the company was 25 to 35-year-old women. The company’s wine-in-a-can products are currently stocked in about 21 Dan Murphy’s outlets.

CUB Sales VP – Australia and NZ, Rose Scott said: “We are committed to being the best beverage company in Australia and expanding our portfolio to meet the evolving needs of Australian drinkers. Riot Wine Co will help us do that.

“Riot Wine Co is a truly innovative company and CUB shares its commitment to quality and sustainability. Its rapid expansion in just three years shows venues and retailers agree that it can deliver great things for consumers.

“We plan to accelerate the expansion of this growing business through our large on-tap network and more than 100 years of draught experience.”

Increasing the feel-good factor

Last week, CUB revealed that by 2020, VB will be brewed with 100% offset solar electricity.

The iconic beer’s shift to solar electricity will be powered by solar generated from the Karadoc Solar Farm under a 12-year Power Purchase Agreement.

Solar panels are also being installed on top of its breweries at the iconic Abbotsford Brewery in Melbourne and Queensland’s Yatala Brewery.

Maxwell said: “Australia’s most iconic beer will soon be one of the most sustainable too. For over 165 years we’ve been satisfying the hard earned thirsts of hard-working Australians who have had the sun beating down on their backs. Now we’re going to get the sun working for us. As a brand that is manufactured in Australia, we need to do our bit for the environment to ensure we can continue brewing for centuries to come.

“In the last year we have removed all plastic from our can packaging and we are proud that the iconic stubby uses less glass than any other similar sized beer due to its efficient design. This means less energy required to produce and distribute to all corners of the country.”

CUB also recently donated 13,000 cans of drinking water to the parched Southern Downs region.

The free drinking water program for disaster relief was launched by CUB in partnership with the Queensland Government and not-for-profit GIVIT last year. More than 100,000 water cans have been distributed in the past 12 months.

Southern Downs Mayor Tracy Dobie said the households were being asked to limited water consumption to 100 litres a person a day.

“It is heart-warming to see the level of support our region is receiving during these dry conditions, and this is not the first time Carlton and United Breweries and GIVIT have partnered to respond to a community in crisis,” Cr Dobie said.

CUB’s Julian Sheezel said a drinking water program was a logical focus as a disaster relief effort.

“Water is a vital part of our brewing process and we’ve got canning capabilities and transport networks to make a program like this happen,” Sheezel said.

“This is a long-term initiative, which will help regional communities for many years.”

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