The low carb and light (or low alcohol) beer market has been—at different times and for different reasons—a staggering success for the apex brewers in the packaged beer category. Indeed, low carb beer in itself has arguably outperformed other alcoholic beverage phenomena such as cider, New Zealand sauvignon blanc, and premium white spirits like vodka. Low carb and light beer features and benefits are therefore of interest to licensed operators looking to appeal to the needs or wants (no matter how delusional or pseudo-scientific) of their customers. Yet migrating packaged beer sales into on-premise sales has always been the $64,000 question. And even if this is possible—to a degree—what is the trend for such beers in the short term?
Market categorisation and sales
Low carb and, to a lesser extent, light beer has contributed significantly to brewers’ bottom lines over the past five years. Noteworthy as this has been a time of change and uncertainty in beer trends and sales. Per capita beer consumption has dropped by 12 per cent over the past five years as drinkers move away from the once standard parochial brands such as VB and Tooheys. Premium and craft or boutique beers have, like low carb, gained support, but beer drinkers in general have been opting for other beverages, such as cider and wine. Despite beer’s dropping consumption, however, we have a growing number of breweries (now at about 150), and this is down to the craft or boutique beer rage. Given that general brewing revenue is expected to grow by as little as 0.7 per cent in 2014, the contribution of light and low carb beers to total sales is not so much a brewery’s luxury, but a necessity.
And by what amount? In the first five years of low carb beer’s Australian life, 2004 to 2009, the category grew from zero to six per cent of the total beer market, turning over $300m in 2009 alone. The low carb sector was reported to be worth $460m in 2013, accounting for 8.8 per cent of total beer market share.
Trends, here and abroad
Low carb sales are predicted to continue growing in Australia, but not in the stratospheric nature of their first five years. The international consumer negative sentiment towards other food and beverage products that sought to leverage the ‘low carb’ marketing angle—such as bread, pasta and even a UK low-carb supermarket pizza base—may move to low carb beer. Even more importantly, in the USA, consumers are shifting away from low carb beer (called light beer in that country) because, as market research has shown, they are tired of the taste. (Perhaps they’ve been drinking too much of it?) Heineken in the USA has recently attempted to address this problem by using our very own Cascade hops in their low carb brew, hoping to add an extra dimension of flavour to the beer.
While light beer’s attraction has always been blood alcohol concentrations and drink driving concerns, low carb beer’s suite of smoke and mirrors is its perceived weight-loss benefits. That this attribute of low carb beers is something of a weight-watching myth has done absolutely nothing to trim the sales figures, if you’ll pardon that appalling pun. Total kilojoules—or energy—is the crux of the weight-loss or weight-gain conundrum. An average full strength beer contains about 550kJs. A mid-strength beer contains 400kJs. And an average low-carb beer contains about 450kJs. Comparative research suggests that if you drink two low-carb beers instead of two full-strength beers then your total average daily energy intake is only reduced by about two per cent—or the equivalent to four rice crackers.
Alcohol is the fattening factor, not so much carbohydrates. Despite research and pleas from organisations such as VicHealth, more than two-thirds of low carb drinkers think these beers are healthier than normal full-strength beer.
A third of low carb drinkers think their beers are healthier than low alcohol beers, and half think it’s less fattening.
What low carb beers have done, though (and very successfully), is to tap into beer drinkers’ concerns that normal beer adds to weight gain. The marketing makes low carb drinkers think they’ve made a healthy choice. Other data also suggests more women are drinking low carb beer.
To stock or not to stock?
With Australians now spending almost twice as much at liquor retailers than at licensed premises ($17.8 billion compared to $10.4 billion in 2013/14, according to IBIS World statistics), and with this trend set to grow, anything operators can do to encourage patronage and customer spend is vital. If that means offering low carb and light beers in abundance, why not?
And if health and wellbeing sentiments continue to push consumers’ behaviour then the low alcohol and low carb angle at the bar or on the wine list may be enough to assuage the health and wellbeing doubts of your customers.
The key is to link your offerings to the new and emerging trends. For instance, if your liquor rep offers you a deal on an exciting new craft-pressed, low-joule, low-alcohol, organic cider, go along…