Coopers hikes sales but suffers hit in profits
Australia | Price competition in a crowded beer market, combined with higher costs, have eaten into the profit of Coopers, Australia’s major independent brewer. Total beer sales rose 2 percent to nearly 770,000 hl, but pre-tax profit dropped 33 percent to AUD 23.1 million.
Also, container deposit schemes (cash for empty cans and bottles) have cost Coopers about AUD 3 (USD 2.10) per carton of beer. In theory, beverage producers should have passed the costs of the container deposit schemes on to their customers, by increasing prices between AUD 3 to AUD 5 for a 24-drink carton.
However, stiff competition in the Australian beer and beverage market, as well as worries over declining sales in the off-premise, have forced producers to absorb these costs themselves. This has had a detrimental effect on their profits.
All Australian states and territories, except Victoria, now either have or are planning container deposit schemes to combat the country’s waste crisis. New Zealand is also planning a national scheme.
Coopers is number three in beer market
Coopers has about 5 percent of the Australian beer market. More than 90 percent of the company’s shares are owned by direct descendants of its founder, Thomas Cooper, The Sydney Morning Herald newspaper reported.
Still, Dr Tim Cooper, a fifth generation Cooper to head the 157 year old firm, called the past financial year (end of June 2019) “one of stability for Coopers”. He also said that the company had had “a glory run up until 2017, where we had growth for 24 years”.
The brewer saw strong growth from its brands Session Ale and Coopers Dry, and positive reaction to the release of Coopers Original Pale Ale in cans. In August 2019, another brand, Sparkling Ale, was re-introduced in cans for the first time in 40 years.
Cans grow in popularity
Cans were Coopers’ success story. Can preference, said Dr Cooper, is no longer driven by occasion only, as cans have become the preferred container for many beer drinkers, particularly within the craft beer segment. Cans have tripled their percentage of Coopers’ packaged volume, to now make up over 20 percent of packaged volume.
Coopers’ maltings proved another boon to the company. According to Dr Cooper, malt sales have increased substantially, and the maltings is now running at close to full capacity, providing significant improvements in malt quality and cost savings to the brewery. By the end of December 2019, Coopers will have exported over 1,000 shipping containers of malt during the year.
Until September 2019, Dr Cooper was honoured to serve as President of the Institute of Brewing and Distilling (IBD), the world’s leading members’ organisation for brewers, distillers, maltsters and cider makers. He felt privileged that he could be involved with the IBD during the time that CEO Jerry Avis and his team have been making extraordinary advances, with upgrades to the IBD’s systems and educational content.
It filled Dr Cooper with pride that over 20 of his colleagues at Coopers have undertaken various IBD training courses in 2019, with seven completing their Diploma of Brewing.
Award of excellence for Coopers
In October 2019, Coopers was recognised as the Family Business of Excellence at the Ernst and Young National Entrepreneur of the Year Awards.
“We continue to be humbled by these forms of recognition,” Dr Cooper said. He added that “it is a challenge to successfully furnish an expanding range of products to the markets we serve, and I owe a debt of gratitude to my colleagues in our Regency Park brewery, and to our sales and marketing colleagues throughout Australia and New Zealand, in meeting the challenge of growing and supporting increasing sales volumes.”
