Despite an overall constriction in the manufacturing sector, sales for independent Australian beverage makers have remained strong, maintaining revenue growth through the first quarter of 2024 and outperforming New Zealand’s hospitality manufacturing sector.

According to figures released in the Unleashed Manufacturing Health Index, Australian beverage makers generated revenue growth of 24 per cent in Q1 2024, while the broader Australian manufacturing sector experienced a 12 per cent decline in average sales.

Unleashed Head of Product Jarrod Adam said: “In spite of high excise tax, pressure from international conglomerates, and the shrinking disposable income of customers, Australian beverage manufacturers have focused on quality products and profitable distribution channels to ensure they continued to maintain and grow their businesses.

“Hiding behind the bigger numbers though, we know many beverage makers are doing it tough, particularly when you look at some of the worst hit subsectors like craft beer who are battling rising costs and shrinking demand. Average revenue doesn’t capture the difficulty of operating in an environment like this, but Australian manufacturers have proven to be resilient throughout.”

In addition to strong performance in Q1 2024, the report noted that Australian beverage manufacturers have boosted average sales revenue by 43 per cent year-on-year, but this trend was not replicated in Australia’s wider hospitality manufacturing sector.

Despite the impressive revenue growth experienced by beverage makers, food manufacturers have seen a 13 per cent dip in sales revenue in the last quarter, and 16 per cent year-on-year.

When compared with their New Zealand counterparts, where average sales have dropped in both beverage and food manufacturing industries in the first quarter, Australian beverage manufacturers again came out on top.

In a similar fashion to the Australian market, the New Zealand food manufacturing sector has been worse hit, seeing a 23 per cent decline in sales revenue last quarter, and a year-on-year dip of 10 per cent. Beverage firms have experienced a 12 per cent dip in sales from the previous quarter, but they have been able to maintain a marginal one per cent revenue increase year-on-year.

David McGrath, CEO of New Zealand RTD beverage manufacturer Clean Collective, says that economic downturn has greatly impacted industry players.

“What is clear of the New Zealand beverage industry is that volumes are down across the board. Over the past couple of years inflation has masked a lot of it, but talk to sellers or manufacturers and they’ll tell you this is an industry-wide issue,” he said.

“For Clean Collective we’re in the lucky position of continuing to grow, but like other manufacturers we are seeing a tough 12 months ahead. For consumers to open up their wallets again, they key factor is going to be interest rates coming down to encourage spending.”

Data from Unleashed also revealed a reduction in lead times across the Australian manufacturing industry, with the beverage sector identified as the fastest lead times of the 12 subsectors reviewed.

For beverage manufacturers, current performance of 10 days to receive goods has dropped 36 per cent since the previous quarter, which Unleashed attributes to the global normalisation of supply chains and an increased focus on logistics in Australia.

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