Coopers beer sales defy odds

Privately-owned brewery sees record production despite flat beer market

a woman

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Coopers, Australia's largest privately held and Australian owned brewery has posted record beer sales, topping 69 million litres in the 2013 financial year.

The company posted a 8.3% rise in beer sales, and has enjoyed one of its longest periods of continued growth, averaging 9.8% over the past 20 years. In 1993, Cooper's total sales fell to 10.8 million litres, as a recession gripped the country.

Cooper's managing director Tim Cooper has told Fairfax Media that Coopers now accounted for around 4.5% of the total Australian beer market, and expects the company's market share to rise over the coming years.

Coopers recent success can be attributed to a string of distribution deals with international labels such as Carlsberg and Sapporo, as well as greater expansion outside of its home state of South Australia. Now NSW is on the cusp of becoming the company's biggest domestic market. Coopers has also defied the beer market, which is facing close to zero growth, as consumers tastes change and drinkers switch to other beverages such as cider and alcoholic ginger beer. Mainstream beer is also being given the flick, with craft beer the new flavour of the town.

The company's success will see it add a second production line to its Regency Park brewery, dedicated to its traditional products which make up around 80% of production.

The Cooper family has owned the brewer for more than 150 years and successfully defended itself from a $420 million takeover offer by giant Lion Nathan in 2005. Australia's former biggest listed brewer, Foster's, was taken over by UK drinks giant SABMiller in 2011, leaving Little World Beverages and Gage Roads Brewing (ASX:GRB) as the only listed brewers in Australia. In July last year, Little World Beverages was snapped up by Japanese-owned Lion.

Foolish takeaway

Woolworths Limited (ASX:WOW) and Wesfarmers Limited (ASX:WES) have been expanding their alcohol retailing operations through brands such as Dan Murphy's, First Choice Liquor and Liquorland, while Woolworths also owns a share of Gage Roads. It may only be a matter of time before one of them comes calling at Cooper's.

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Motley Fool writer/analyst Mike King owns shares in Woolworths and Gage Roads.

 

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