In a nation where the beer has long been a cultural staple, a seismic shift is occurring. According to new data from the Australian government, beer consumption in Australia has plummeted to its lowest point in nearly 80 years. The figures are staggering: Australians consumed just 82 liters of beer per capita in 2019-20, a sharp decline from the 190 liters per capita recorded between 1974-75. So, what’s filling the void? Spirits, and not just any spirits—high-alcohol spirits like vodka, gin, and tequila are seeing a significant uptick.
The Rise of Spirits
The data reveals that spirits recorded a 10% increase between 2019-20, with Australians consuming 19% more high-alcohol spirits per capita over the year than in 2016-17. According to the government report, “This is the highest level seen since the peak of spirits consumption in 2007–08 of 2.3 liters per capita.”
But it’s not just the quantity; it’s also the quality and type of spirits that are changing. In 2007-08, spirits mixed with soft drinks made up 48% of spirits consumption. Fast forward to 2019-20, and that number has dropped to 28%. This suggests that Australians are becoming more discerning drinkers, opting for purer forms of spirits over pre-mixed beverages.
The Tax Factor
Researchers attribute this shift, in part, to changes in tax on ready-to-drink beverages implemented in 2008. This tax change led to a spike in the consumption of certain spirits. Unmixed spirits like vodka, whiskey, and liqueurs are now at their highest level, with people drinking an average of 1.5 liters of alcohol from these drinks in 2019-20.
This aligns with global trends where premiumization in the spirits sector is evident. According to a report by Grand View Research, the global spirits market size was valued at USD 378.0 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 3.5% from 2021 to 2028.
Wine Still Reigns, But Not By Much
Despite the decline in beer and the rise in spirits, wine remains the most popular alcoholic beverage in Australia, accounting for 42% of all apparent alcohol consumption. While wine recorded its lowest rate of consumption since 2015-16, it remains at one of its highest levels over the past 60 years.
The Bigger Picture
Interestingly, the report found that the total amount of “pure alcohol” available in Australia fell by less than 1% in 2019-20 but was still significantly higher than five years earlier. This change did not reflect “per capita consumption” and instead came about as Australia’s population continues to grow.
What Does This Mean for the Beverage Industry?
For the beverage industry, these trends signal a need for adaptation. Brands that have traditionally focused on beer might need to diversify their portfolios. The craft spirits movement, already a significant trend in countries like the United States as reported by Forbes, could find fertile ground in Australia.
Conclusion
The Australian drinking landscape is undergoing a transformation. While beer has been dethroned from its longstanding reign, spirits, particularly high-alcohol ones, are ascending the throne. Factors like tax changes and a more discerning consumer base are contributing to this shift. As Australia’s population continues to grow, it will be interesting to see how these trends evolve and what new preferences emerge. One thing is for sure: the Australian liquor cabinet is getting a makeover, and it’s looking more sophisticated than ever.
