2 Feb 2023

Low alcohol beer consumption jumps by 750 percent since 2019 - NZIER

5:28 pm on 2 February 2023
A person's hand can be seen holding a beer glass as the beer pours from a tap in a bar.

Beer sales volumes data from Stats NZ indicated New Zealanders consumed more than 296 million litres of beer for the year to September 2022. (file image) Photo: Unsplash / Bence Boros

The consumption of beer with low alcohol content has increased by 750 percent since 2019, according to research by an independent economic consultancy.

The New Zealand Institute of Economic Research (NZIER) survey, commissioned by the Brewing Industry Association, found beer sales were worth about $3.3 billion for the year ending September 2022.

The popularity of low-carb beer has grown 38 percent over the past year and accounted for 13 percent of overall supermarket and off-licence sales.

Brewers Association of New Zealand executive director Dylan Firth said the jump in demand for low-carb and low alcohol options (less than 1.15 percent) was seen across the Heineken and Steinlager brands, as well as different craft products.

"You're seeing more people jumping into that space and because more things are available to choose from, I think people are looking to those different options.

"I expect that will grow significantly in the next few years.

"I think there's generally a cap of where it can kind of sit, but you look at more established markets with these things such as Europe, and countries like Spain have 10 percent of the total beer market is 0 percent beer, so there's definitely room to grow."

On the opposite end of the spectrum, there was also an increase in popularity of the 5 percent abv (alcohol by volume) and above beer, which were primarily premium and craft brands.

"This, coupled with the overall lower per capita consumption of all beer, reflects the fact that New Zealanders are generally having slightly fewer drinking occasions but focusing on quality and premium brands," Firth said.

Beer sales volumes data from Stats NZ indicated New Zealanders consumed more than 296 million litres of beer for the year to September 2022, up 5 million litres from the same period in 2021.

Total consumption remained about 290 million litres annually since 2016; however, with population growth, the per capita consumption rate had declined.

The report showed the beer brewing industry contributed an estimated $896 million to government last year in GST and excise tax.

"Excise tax increased in line with inflation by 6.9 percent in 2022, the largest spike in 30 years," Firth said.

"In the year to November 2022, alcohol was responsible for $1.22bn of excise taxes and duties, beer alone contributing $401m."

Firth said while the brewing sector's sales were recovering to levels seen before the pandemic, significant supply chain issues and difficulties accessing key brewing inputs, such as carbon dioxide, were still causing brewers headaches.

Carbon dioxide is needed to push liquid through pipes and give a brew fizz, but the closure of the country's last two food grade CO2 plants has caused shortages amid increasing importing costs.

Firth said most breweries created more CO2 than they needed though the fermentation process, some of which could be captured and used to carbonate drinks.

"We are working along with the government to develop longer term solutions for the brewing sector, who are uniquely placed to recapture CO2 through the fermentation process," he said.

"This will take time and investment, but long term the aim is to utilise the excess CO2 and even be able to distribute to others who need it for their food and beverage processing."

He said the association was asking the government to fund investment into machinery that could help with redistribution.

"There are definitely some people that have already put some money into doing that, but it's a considerable piece of kit for many breweries that may not have looked into it before.

"If you're a small brewery, spending a couple hundred-thousand-dollars, it's probably more than you make in a few years.

"What we're doing is starting to have those conversations with government, asking if there is money available through some sort of fund to help decarbonise businesses or to move to a more sustainable operation.

"I think there's plenty of funds for other industries and spaces like this, it'd be something that we would want to look at that would help, not only brewing, but potentially other industries as well that have the ability to distribute more CO2."

Firth said while 2022 had been a tough year for brewers, they were an innovative and resilient bunch who were ready to face what 2023 would bring.

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