Craft Beer Segment In Australia Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Craft Beer Segment In Australia Case Study Help

Health Awareness:

As the data of past five years represented the increased health-concerns and consciousness, this led to the increased attraction of consumers towards bottled water and fruit juices reducing the sales of alcoholic beverages. (Cloutman, 2019)Therefore, the health consciousness in upcoming five years is known to increase demonstrating its contribution in the declined per capita consumption of alcohol. Despite increased health consciousness, the sale of craft beer segment is demonstrating consistent growth which is expected to result in increased industrial revenue growth by 1.2 percent over next five years. (Reeves, 2019)

Competition:

Considering the continuous growth craft beer segment in the Australian beer market, the leading players of the industry such as Lion and CUB have brought improvement in the offerings of craft beer through acquisition and increased investment in the brewing subsidiariesof craft beer such as Matilda Bay (CUB) and Little Creatures (Lion). An increase in both external and internal competition has been projected for the next five years. This is mainly supported by the increase in the number of enterprise units, private-label beer offerings of the supermarkets and the industry of cider production.

The consumers of craft beer are known to lack loyalty towards a particular brand. In contradiction, a significant increase in the craft brewers have resulted in the increased number of enterprise units and the rate of employment. Therefore, the growth of household discretionary income and an extensive homogenous traditional beer are serving as a key driver to encourage consumer to shift to high value segment of craft beer production.

Revenue Growth and consumer demand:

Due to rapid changes in the trends and dynamics of the beer industry in Australia, the consumer base is known to be increasingly discern and demonstrate increased interestand attractiveness of consumers to try new and different beer styles and brands. Due to this reason, the demand of consumers is known to represent a changing dynamics of the consumer perception being more focused on the product variety and its quality. This is primarily known to drive the growth of craft beer segment.

Due to the smooth transition from the tradition beer products to craft beer products such as Victoria Bitter i.e. a high-priced craft and premium beers. Therefore, the projected growth is known to bring significant increase in the sales premium and craft beer. This is expected to increase the industry revenue by approximately 1.2 percent per annum.

Import and Export:

The forecast of premium and beer segments is primarily for outperforming the other beer types. The fruit-induced beer and craft beer are known to demonstrate noticeable growth in the upcoming period. Due to the potential of craft beer to generate increased revenue, many of the foreign brands represented their intention to build inroads to the craft beer market.

With increased local production of international beer portfolio of Anheuser-Busch InBev and Coca-Cola Amatil are known to produce a wide-ranging new variety of foreign beers. As a consequence, the import growth is known to grow at slow pace over a period of next five years. Whereas, the export growth is known to increase by approximately 11.6 percent per annum for next five years i.e. from 2020-2024 through 2018-2019. This is mainly due to the increased demand of craft beer in the Asian market and overseas.

	2020	2021	2022	2023	2024
Imports	422	434	442	450	456
Exports	44.1	47.4	50.3	53.1	55.9

Price:

The growth of tax differential is known to contribute to wine making it less expensive in next five years. This is known to lead the large customer base to substitute away from beer. Similarly, the industry competition is not based on price reduction but is more focused on the trends of beer consumption and the popularity of the brands. Therefore, the non-specific consumer on price allows the leading craft brewers to make more investment in improving the product quality and expand the product portfolio. This is primarily based on the perception of consumers as they tend to be more willing to try out new and different styles and brands of craft beer. Similarly, they tend to spend a large proportion of their income on the purchase of beer.

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