Competition brews with craft beer from Coca-Cola Amatil

What has become of Casella’s much touted Arvo beer brand which was launched a few years ago? Was it too mainstream to be considered craft? Or why would the erstwhile wine company Casella, now with the help of joint venture partner Coca-Cola Amatil (CCA), launch a range of beers under the Yenda brand?

As Australian media write, CCA hopes the town of Yenda – which is home to Casella (Yellowtail brand) – will soon become synonymous with beer.

Yenda Pale Ale, which has already won a silver medal at the Sydney beer show, an India Pale Ale, an unfiltered lager and a mid-strength ale will start rolling out of Casella's brewery in December. These domestic beers are said to complement CCA's imported craft beer, Blue Moon, which is made in the U.S. by Coors.

CCA’s Chief Executive Alison Watkins said she remains committed to beer even though sales and earnings have fallen short since CCA returned to the beer market in December 2013.

Australian beer consumption is declining on a per capita basis but craft beer is going against the trend. Sales have been growing between 10 percent and 15 percent a year for the past five years and the category now accounts for about 4 percent of the total beer market.

The growth of the craft beer segment has attracted new players and the number of craft brewers is estimated to be about 200. However, despite the little guys, the category is dominated by the country’s two major brewers: Lion and SABMiller/Foster's. According to IBISWorld, Lion, which makes James Squire, Little Creatures and White Rabbit, controls more than 31 percent of the craft beer market, while Foster’s, which owns Matilda Bay and Fat Yak, has more than 15 percent.

In the draught craft beer market – which will be the initial focus for the Yenda brand – Lion and Foster’s are estimated to account for 80 percent of sales, it was reported.

CCA hopes to eventually become the third or fourth-largest player in the beer market.