Beer sales down almost 3 percent in 2014
That sinking feeling. According to estimates, beer sales in Australia declined over 2.6 percent in 2014. How come? Has beer become too expensive? Or have consumers switched to other drinks? The only one not worrying is Coopers Brewery from Adelaide. The family-owned brewer saw sales increase 7.4 percent in its past financial year (end of June 2014). In the calendar year 2014 it brewed slightly under 800,000 hl beer, which means that Coopers now holds about 5 percent of the total Australian beer market, the company’s strongest position in its 153-year history.
The 2014 result was driven by rising interstate sales and the contribution of Coopers’ international beer portfolio (Carlsberg, Sapporo), which now represents 10.6 percent of total volume, it was reported.
What seems to put some people at Coopers into a pensive mood is the fact that during the second half of 2014 Coopers’ volume growth slowed to 5.1 percent. Mind you, that‘s still impressive in view of general market trends, but observers have begun to wonder: can Coopers continue increasing its sales in spite of the big brewers’ heavy price promotions or will growth for Coopers eventually flatten out? And what will Coopers do then?
Coopers’ 150 odd family shareholders must have become so accustomed to sales going up, up, up, that they will find it hard to envision years of stagnation. Coopers’ management has done its best to diversify, for example into cider locally but has failed to set up a really significant export business (currently an estimated 2 percent of sales), which might bring in nice profits once Australia’s beer market anaemia hits Coopers too.
Meanwhile people wonder how Lion, owned by Kirin, and CUB, owned by SABMiller, have fared this past year. Many thought it revealing that Lion’s CEO Stuart Irvine, who joined Lion from Nestlé Russia two years ago, decided to cut Lion’s wage bill by 15 percent late last year, leading to the departure of many Lion veterans. The general sentiment seems to be that Lion’s dairy division is doing to Lion’s beer group what Foster’s wine division did to Foster’s beer: hanging like a millstone around the breweries. In the end, Foster’s ill-fated wine investments led to the breakup of the group and the sale of Foster’s to SABMiller. Let’s hope impressions are deceptive and history does not repeat itself in Australia’s beer market.
Despite beer sales going south, the number of craft breweries continues to rise. There are now over 200 craft brewers in Australia and many more are about to come on stream. Observers think there are far too many people jumping on the craft wagon to make a success of it, but again, only time will tell.
