Coopers posts profit growth but sales decline
Coopers Brewery, the country’s largest privately-owned brewer, has posted a 4 percent increase in profits for the 2017/2018 financial year, ending June 2018. However, after 24 consecutive years of sales hikes, Coopers saw beer sales drop 9 percent to less than 800,000 hl. This meant Coopers’ revenues declined to AUD 237 million (USD 173 million) from AUD 252 million in the previous year.
Coopers’ beer market share is almost 5 percent, which makes it still a distant third to Carlton & United Breweries (CUB), owned by AB-InBev, at 46 percent, and Lion, owned by Japan’s Kirin, at 42 percent.
Coopers’ Managing Director Dr Tim Cooper said on 26 November 2018 that profit before tax had reached AUD 34.3 million (USD 25 million), compared with AUD 33.4 million for the previous year, thanks to a profit contribution from Coopers AUD 65 million new malting plant.
Commenting on the sales drop, Dr Cooper pointed to the growing number of craft breweries (soon to reach 600) as well as more aggressive retail space management and discounting by both CUB and Lion.
The craft beer industry in Australia is worth an estimated AUD 740 million (USD 540 million) annually and is growing at 15 percent to 20 percent per year at the expense of mainstream beer brands, which are going backwards, presenting big headaches for CUB, Lion, and now Coopers.
Sales volumes in Coopers’ home market of South Australia grew by 0.5 percent, but fell in Western Australia (17.7 percent), Victoria (15.9 percent), Queensland (11.6 percent), and New South Wales (11.1 percent), where the impact of the new Container Deposit Scheme increased the costs of bottles and cans.
Volumes of non-alcoholic beer increased 10.4 percent in the financial year, while malt extract sales were steady and home-brew extracts fell 5.6 percent.
To combat the decline in sales, Coopers will increase its marketing and advertising budget by 20 percent, with an extra AUD 3 million devoted to a brand revival.
Looking at the current year, Dr Cooper said that sales in the first few months of the new financial year had been positive, with strong growth in its new brand Session Ale, and a good initial response to the release of Coopers Dry and Coopers Original Pale Ale in cans. Sales of malt to other brewers and distillers are expected to further boost profits in the coming years.
