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3. VICTORIA BITTERS
Situational Analysis
Name: Austin Eaves
Student Number: s5056097
Tutorial Time: Ms.Celeste Alcaraz,
Thursdays 8:00 – 8:50pm

4. Contents
Executive Summary.............................................................................................................................3
Introduction......................................................................................................................................4
Company Background......................................................................................................................5
Situational Analysis .............................................................................................................................7
Market Analysis ...............................................................................................................................7
Alcohol consumption comparison graph – 53 years....................................................................8
Consumer Wants..........................................................................................................................8
......................................................................................................................................................9
Environmental Analysis.....................................................................................................................10
Competitor Analysis: Most Threatening Labels ................................................................................11
Company Analysis .............................................................................................................................12
References..........................................................................................................................................13

5. Executive Summary
Australia’s beer industry has been under constant strain throughout recent years due to a lower customer
demand within the industry, this document will analyse how Victoria Bitters can compete within an industry
that is declining. Whilst, simultaneously competing with superior labels that outrank VB in sales and design.
Victoria Bitters has been a leading Australian brand in past years, however, due to its non-progressiveness
and diminishing market, along with limited range and variety. It is proposed that VB undertake a brand
repositioning in order to appeal to a larger target audience, maintain leverage on competitors, and meet 2016
societal standards.

6. Introduction
Australia’s beer industry has been under constant strain throughout recent years due to a lower customer
demand within the industry, with “Beer consumption down more than 15% over the last decade”
(Couriermail.com, 2015). Additionally, mainstream brands are facing constant competition due to the
uprising of Craft Beer,with an annual revenue growth of an estimated 10.1% (Couriermail.com, 2015),and
cider with an 11% volume growth in 2014 (Trend Report, 2015).
Thomas Aitken, founder and head brewer of VB, produced the Australian classic back in 1854
(Victoriabitter.com, 2015). Since then, the beer hasn’t undertaken any major modifications to the taste or
design. The only exception being an incident in 2012, where modifications were made to the taste,resulting
in a huge outrage amongst brand loyalist (Victoriabitter.com, 2015). VB has also had failed attempts in
introducing new product extensions, such as VB Raw which was removed from the market due to poor sales,
“Raw wasn’t bad, just a bit forgettable, and it disappeared off the shelves without fanfare within a few
months” (Philistinebrisbane, 2011).
Furthermore, Australian consumers are becoming more health oriented within recent years,this has sparked
health initiated campaigns amongst mainstream markets. Lion, for example, has recently undertaken a
movement against preservatives in beer with their new “Beer the Beautiful Truth” campaign
(beerthebeautifultruth.com, 2016). Victoria Bitters has been a leading Australian brand in past years,
however, due to its non-progressiveness and diminishing market, along with limited range and variety. It is
proposed that VB undertake a brand repositioning in order to appeal to a larger target audience, maintain
leverage on competitors, and meet 2016 societal standards.
0
VB’s current catalogue (excluding Raw)
A range ofpreservative free beers
Undertaken by “Lion”.

7. Company Background
Victoria Bitters is under the jurisdiction SAB-Miller, of whom is currently dominating in the Australian beer
market, consisting of 37.8% of all sales (in 2014) (euromonitor, 2016). Sab Miller is a highly affluent
company, earning a net revenue of over $2.6 U.S billions in 2014 (SABMiller.com, 2015). Supporting 69,000
employees in over 80 different countries (SABMiller.com, 2015),SABMiller has undertaken a variety of
environmentally friendly services in their beer production and remains “the world’s second-biggest brewer”
to date (Greenblat.E, 2014)
In 2011 SABMiller bought Fosters for $12.3 Billion, since then the company has witnessed a “1% sales
decline for its flagship brand VB while its wider Australian beer portfolio overshot volume falls posted by a
weakened local market” (2014) (Greenblat.E, 2014).This fact,in collaboration with the decreasing beer
consumption and demand in Australia, could result in a significant loss of money and a lower annual revenue
for the company.
(See company shares next page)

8. Company Shares (Global - Historical Owner) | Historic | Total Volume | % breakdown
(euromonitor.com,2016)

9. Situational Analysis
Market Analysis
The alcohol industry, from an overall perspective is seeing a decrease, Abs.gov.au (2015) statistics reveal
that “Australians are drinking less alcohol overthan any time in the previous 50 years”. This can be seen
evident in nearly every alcoholic category, except Cider, which within recent years has been growing at a
rapid pace.
(Graph sourced from, abs.gov.au 2015)
Based off of the above graph, Australia’s alcohol consumption can be seen declining. However,Cider being
a relatively new beverage within the alcoholic world, has been receiving a positive result within the market.
With sales nearly doubling from 2009 – 2014 (abs.gov.au, 2015). This could be due to a limited supply of
range in industry, whilst there are many different products available, it is possible that the Australian
population seek new and exciting flavours.
This could be the case in the beer market, an ‘IBIS World industry report, (2016)’, states that the “Per capita
beer consumption has declined sharply as drinkers have given up traditional brands such asVictoria Bitter,
in favourof premiumand craft beers and other beverageslike cider and wine”.
The overall beer industry has been seeing a constant decline in demand throughout recent years,with
“consumption down more than 15% over the past decade” (abs.gov.au,2012). Courier Mail (2015),states
that “traditional brands forecast to lose market share to premium beers (including flavoured, dry, foreign-
label and craft brands)”.
Even despite the fact that craft beer and cider consist of a fairly small proportion of the market (an estimated
“8.4% in 2015-2016” for craft beer (IbisWorldIndustryReport, 2015),and an estimated “11.4% in 2015-
2016” for cider (IbisWorldIndustryReport,2016)). The industry is growing at a fast rate,and is increasing in
sales, rather than decreasing. This makes the cider, and especially the craft beer industry a valid competitor
to Victoria Bitters sales.

10. Alcohol consumption comparison graph – 53 years
Graph sourced from (abs.gov.au, 2015)
This graph clearly illustrates the gradual decline in the alcohol industry, it also gives insight as to why
relatively new products such as cider and craft beer,are succeeding. IBIS world (2015) states that “Drinkers
have become increasingly discerning and more willing to try different brands and styles. As a result smaller
brewers have emerged to fill this niche”. IBIS also stated that this is partly due to the increasingly
“homogenous nature of traditional brews, and consumer demand for variety and quality”.
Consumer Wants
All of the Following statistics found in the table below, were sourced via SurveyMonkey.com, Survey
conducted by Brandon Barker. (Survey consists of 300 beer drinkers) –
 63% of people prefer beers produced by small independent breweries over large, mainstream ones
 85% of people said taste was the most important factor when choosing a beer
 61% of people stated they care about the price of the beer in decision making
 54% of people said that the style of the beer was important in their decision making
 55% of people typically buy a 6-pack, rather than more
 77% of people stated they prefer bottle to cans
 47% drink more beer in the summer time

11. Understanding the wants of the public, consumer wise and environmentally, is important for any business if
they want to appeal to a broader audience. It is recommended that Victoria Bitters appeals to these demands,
in order to successfully reposition the product, and escape the decline phase of the product life cycle.
(Graph sourced fromfree-power-point-templates.com, 2016)

12. Environmental Analysis
The macro environment provides great opportunity for Victoria Bitter’s product repositioning, through
customer demands, to societal standards and environmental care. Perhaps the only limiting factors found
would be the controversy regarding advertising that VB could potentially be guilty of; and lock out laws.
POLITICAL
(huffingtonpost.
com, 2016)
(ro.uow.edu,
2005)
 Lockout laws In Sydney and Proposed lockouts in QLD –
Less consumption
 Sugar Tax – Beer companies already pushing for preservative
and sugar free beers (e.g. lion)
 Advertising regulations – entails to whom the advertisement is
aimed at, packaging, where. Also political correctness, nudity,
exploitation of women etc.
ECONOMIC
(IbisWorldIndustr
yReport,2015) &
(2016)
 The decrease in alcohol/beer demand
 The rise of Craft beer (8.4%), and cider sales (11.4%) [2015-
2016]
 Increase in foreign labels
 Expected increase in coarse grains in the years (2015-2016) –
this combined with low beer demand could be detrimental to
sales
SOCIOCULTURAL
(SABMiller.com,
reading report, 2015)
(news.com.au, 2015)
 Public demand to know what companies do with resources
 Public demand for equal rights, (SABMiller lists that 29.6%
of their managers and executives are female)
 People don’t want sugar or preservatives in their beer, (8/10
Australians state they agree with sugar tax) ~ Australia
becoming more health conscious
 Environmental care – push for water saving and recyclable
waste – SABMiller has enforced this agenda
TECHNOLOGICAL
(ausfoodnews.com.au,
2014)
(craftbrewingbusiness
.com, J. Dunphy,
2014)
 Constant technological advances are being produced in the
line of production. Coke AMITIL for example, is moving into
the beer industry, due to their equipment advances, and
optimization.
 Mass discussion on changing the lid on beer cans to make
more appealing. Lids are similar to cans found in
supermarkets; proposed that this design effects the taste and
“aroma” – Great marketing scheme

13. Competitor Analysis: Most Threatening Labels
All prices and product ranges were sourced from (danmurphys.com.au, 2016) prices and range
selection vary upon distributor.
nt XXXX GOLD
Target Market: Similar to Victoria Bitter, male, working class. However,
recent products such as ‘Summer Bright Lager’, and campaign such as
XXXX Island, are appealing to a larger audience. (James Atkinson, the
shout.com.au, 2012).
Range: Lager, Pale Ale, Summer Bright Lager, Bitter, Summer Bright
Lager with Natural Lime, Origins Crip Lager
Price: Based off of Lager (VB’s predominant beer)
24 pack 6 pack Individual
$36.95 $14.49 $3.09
(Lager stubbies)
Marketing
Television
Facebook
Instagram
Twitter
Advantages: Great marketing techniques, online presence, more product range than VB, and appeals
to a larger audience. Hence why XXXX Gold is Victoria Bitter’s highest mainstream competitor.
Disadvantages: Unfortunately XXXX Gold has absolute advantage over VB in marketing and price,
disadvantages are inapplicable in comparison to the two brands.
5 SEEDS, CIDER
Target Market: 5 seeds particularly aim towards a younger audience,
especially in their advertisements, predominately using humour as seen in
their “delivery girl ads” (mUmBRELLA, 2013). This is consolidated
through its increasing demand in pubs, bars, and nightclubs
(ibisworldindustryreport, 2016).
Range: Crisp Apple Cider, Cloudy Apple Cider, Premium Cut Dry Apple
Cider, Bright Apple Cider, Night Orchard Apple Cider with Vodka &
Berries, Pear Cider.
Price: Based off of Crisp Apple Cider
Case of 24 Pack of 6 Individual
$51.99 $16.49 $3.49
(Bottles)
Marketing
Television
Facebook
Twitter
Instagram
Advantages: Huge range of product selection despite the limitations cider have. Leading brand in
cider industry (ibisworldindustryreport, 2016). Large target market with a growing industry, similarly
to Craft beer, except 5 seeds poses a genuine threat due to its predominant stance in the market.
Disadvantages: Product variation will eventually run out

14. Company Analysis
SWOT
STRENGTHS
 Loyal customer market
 Renowned Australian beer
(patriotic?)
 Very old – could be classified
as a classic, or vintage beer
 Lots of potential product
extensions due to low range
WEAKNESSES
 Becoming a forgotten beer
 Un-creative logo, design hasn’t
changed
 Advertisements limited to
sport
 Only two beer types
OPPURTUNITIES
 Brand repositioning has great
potential
 Victoria Bitters has the
potential to gain mass attention
by re-inventing itself as a
modern beer that conforms to
societal wants and demands
 Essentially: change everything
THREATS
 Competitors and relatively
new industries taking over the
market, e.g. Craft beer and
cider

15. References
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https://www.victoriabitter.com.au/the-brew [Accessed22 Mar. 2016].
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story/f10364bc35b3068243861e3ca76bbc2d?=WEEK [Accessed22 Mar. 2016].
Portal.euromonitor.com.libraryproxy.griffith.edu.au.(2016). Statistics.[online] Available at:
http://www.portal.euromonitor.com.libraryproxy.griffith.edu.au/portal/statistics/tab[Accessed22Mar.
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Greenblat,E.(2014). VBsales down,SABMillerreports.[online]The SydneyMorningHerald.Available at:
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Sabmiller.com.(2016). SustainableDevelopmentSummary Report.[online] Availableat:
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