Despite a general decline in the manufacturing sector, independent Australian beverage makers have shown resilience, maintaining robust revenue growth through the first quarter of 2024 and outperforming New Zealand’s hospitality manufacturing sector.
The Unleashed Manufacturing Health Index reveals that Australian beverage makers achieved a revenue growth of 24% in Q1 2024, contrasting sharply with a 12% decline in average sales across the broader Australian manufacturing sector.
“In spite of high excise taxes, 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,” said Unleashed Head of Product Jarrod Adam.
Adam noted, however, that the impressive overall numbers mask challenges faced by specific subsectors like craft beer, which are grappling with 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,” he added.
The report also highlighted a significant year-on-year increase in average sales revenue for Australian beverage manufacturers, which surged by 43%. This trend, however, was not mirrored in Australia’s broader hospitality manufacturing sector, where food manufacturers experienced a 13% decline in sales revenue in the last quarter and a 16% drop year-on-year.
Comparatively, New Zealand’s manufacturing sector has fared worse. Both beverage and food manufacturing industries in New Zealand saw a decline in average sales in the first quarter. The New Zealand food manufacturing sector experienced a 23% decline in sales revenue last quarter and a 10% year-on-year drop. Beverage firms saw a 12% decline in sales from the previous quarter but managed a marginal 1% revenue increase year-on-year.
David McGrath, CEO of New Zealand RTD beverage manufacturer Clean Collective, acknowledged the economic challenges. “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, the key factor is going to be interest rates coming down to encourage spending.”
Unleashed data also showed a reduction in lead times across the Australian manufacturing industry, with the beverage sector posting the fastest lead times among the 12 subsectors reviewed. Beverage manufacturers reported a performance of 10 days to receive goods, a 36% decrease from the previous quarter, attributed to the global normalization of supply chains and an increased focus on logistics in Australia.
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