XXXX Gold remains the biggest beer in Australia and the mid-strength leader, but figures seen by Brews News confirm the brand’s rapid decline.
In volume terms, the brand’s share of mid-strength has reportedly slipped from close to 50 per cent two years ago to 43 per cent last quarter.
This share includes its XXXX Gold Australian Pale Ale offshoot, which was introduced in July 2015 and has failed to fire.
CUB’s starlet Great Northern Super Crisp has increased its share of mid-strength over the same period from 14 per cent to 30 per cent.
While XXXX Gold remains the largest volume brand in the country, its total beer market share has decreased from from 11.4 per cent to 10.7 per cent.
This may not sound like a lot, but in a beer market with estimated annual volume of around 1.74 billion litres, it amounts to more than 12 million litres of beer volume shed by Lion.
Meanwhile, Great Northern Super Crisp has increased its share of total beer from 3.2 per cent to 5.7 per cent.
XXXX holding its own: Lion
Lion this week moved to address the slide with a new mid-strength offering in Iron Jack, which will be brewed at Castlemaine Perkins in Brisbane and Tooheys in Sydney.
But brand director Jack Mesley told Brews News that XXXX Gold is actually holding its own when compared with its peers.
“Like a lot of classic beer brands, it is facing some uphill battles. But actually within that group of classic beer brands, XXXX Gold’s actually doing pretty well,” he said.
“It’s still really important and still the number one focus for Lion… [but] what we are finding is that people want more options to fulfil their moderation needs.
“Obviously XXXX Gold set up the mid-strength segment and it continues to play a vital role in that.”
He said the Legendary Brewing trade mark will be singly focused on Iron Jack during 2017, but there could ultimately be more products launched under its umbrella.
Craft starring for Lion
Lion CEO Stuart Irvine acknowledged that sections of the Australian beer market remain challenging, in the brewer’s recent first half trading update.
“However, our craft offerings continue to post strong growth, helping to offset softness in mainstream beer,” he said.
James Squire 150 Lashes Pale Ale grew by 14 per cent, while Furphy more than quadrupled its volume during the half.
The Kirin brand starred within the core portfolio, more than tripling its volume growth, while XXXX Summer Bright Lager grew volumes more than ten per cent.
The half year ended March 31 was the second consecutive result in which Lion has broken from its previous convention of putting a percentage figure on its total beer volume growth or decline.
“Overall volumes were affected by the termination of the Australian distribution agreement with AB InBev and the loss of system volume placed upward pressure on the cost of sales,” the company said.
“Against this backdrop, Lion continued its strong cost management focus.”