Coopers is caught in beer no man’s land as the battle to snare rapidly-changing tastes takes a heavy toll on Australia’s largest family-owned operation.
The 156-year-old company’s latest results, which revealed a 9.1 per cent fall in sales over the past financial year, again highlighted the business’s modern-day predicament.
Coopers isn’t large enough to be a true member of the internationally-backed Big Beer Club, which counts brands such as Carlton Draught, Tooheys and XXXX Gold as members. Coopers’ core range isn’t considered crafty enough for the new generation of drinkers who are flocking to hop bombs, flavoured sours and barrel-aged stouts.
Even managing director Dr Tim Cooper knows the brewery’s traditional standing has led to its beers being labelled an ‘old man’s drink’.
“We’re sort of caught in the crossfire,” Dr Cooper told Fairfax shortly after the announcement of the latest figures.
“You’ve got those at the bigger end being pretty aggressive and then at the other end you’ve got the plethora of craft brewers.”
And that means consumers are turning away from Coopers, which before this week’s announcement claimed 5 per cent of the Australian beer market.
While Coopers’ sales remained steady at home in South Australia, buyers across State borders have fallen away dramatically – and very quickly considering the brewery had enjoyed 24 consecutive years of sales growth. There was a 17.7 per cent fall in WA sales, a slip of 15.9 per cent in Victoria, while Queensland and New South Wales were each down by more than 11 per cent.
The company is moving swiftly to try to arrest the slump with Dr Cooper forecasting a 20 per cent jump in advertising and branding spend and an extra $3 million likely to be invested in new products in 2018-19.
Although Session Ale has gained traction in the market since its release 12 months ago and Coopers’ claims the flagship Pale Ale still holds a third of national sales in that style, punters have backed away from the Sparkling Ale, which drove the company for more than a century and a half. Coopers Dark Ale and Extra Stout have also shed volume.
Space for Coopers beers on shop shelves has shrunk and Brooklyn Lager’s transfer to Lion, which Coopers had brewed under licence for three years, also hasn’t helped the brewery’s plight.
It is too early to gauge the success of the Coopers Dry, which joined the stable two months ago but the low-carb, fine-filtered Lager isn’t the type of brew to appeal to craft beer aficionados who are now in the fastest growing segment of the industry, rising at almost 20 per cent a year.
Dan Murphy’s alone recorded a 15 per cent rise in craft beer sales in 2017.
In contrast, Euromonitor International data indicated mainstream beer sales fell 9 per cent between 2011 and 2016. And they continue to slide to the point whereby companies such as AB InBev (CUB), Asahi and Kirin (Lion) have either created their own craft beer brands or bought them, with Pirate Life, 4 Pines, Byron Bay and Mountain Goat in that mix.
Coopers has not flagged any job cuts as a result of the sales fall but it is significant that another SA-based brewery, West End, excised 36 jobs last month. Another of the Lion stable, XXXX in Brisbane, shed 25 jobs – a quarter of its workforce – at the same time. The level of craft beer sales was among the reasons for the axings.
In an attempt to be more appealing to the modern drinking audience powering the craft beer surge, predominately 18-39-year-olds, Coopers released a new commercial depicting young adults enjoying the brewery’s core range.
However, the constant turnover of beers from smaller, independent breweries, with new releases coming onto the market weekly is a key part of the rise in craft sales. Producing more seasonal beers is a game Coopers will now have to consider playing.
Brews News understands a new Coopers beer could be announced in the coming weeks.
The lack of variety from Coopers was a hot social media topic this week, epitomised by one Facebook post on the Perth Beer Snobs forum.
One contributor summed up the situation.
“It’s just their beer isn’t particularly interesting. I like their stout… I’ll get a longneck every six months but that’s it. Now if they could dry hop the heck out of Sparkling they may be onto something.”
The move of Pale Ale and Session Ale into cans, which are more popular in the younger demographic, is also aimed at increasing appeal.
There was some writing on the wall that Coopers was hitting strong business headwinds last year when, despite a 2.9 per cent rise in sales to a record 84 million litres, Dr Cooper identified falling draught deals – attributed to the rise of independent breweries – as a major concern.
Coopers attempted a positive spin in the latest results by declaring a 4 per cent increase in profit for the 2017-18 year. But the figure was achieved through a new $65 million maltings plant, effectively a separate business recently bolted on to the company.
There have been plenty of challenges for the brand since Thomas Cooper produced his first batch of Ale in 1862.
It has lived through the rise of Lager in the early 20th century, droughts, a couple of World Wars and two recent troubles that left Dr Tim Cooper in doubt he would continue in the family tradition.
A rise in excise by the Whitlam Government, coupled with debt taken on to modernise the Adelaide plant, almost sent Coopers to the wall in the late 1970s and early 1980s. It took a decision to sell keg beer for the first time in 1983 to give the company tap points at home and, crucially, interstate to boost its bottom line.
Finally, Coopers’ expertise in producing homebrew kits and supplies has enabled the business to battle through the early 1990s recession “we had to have”. And 17 per cent interest rates. More drinkers making their own beer with Coopers supplies helped the brewery survive when others like Hahn folded.
The latest downturn will again require a change in Coopers’ business approach.
They need to stress their use of their own malts/malting to help their beers to stand out. Special releases will probably be needed to promote interest IMHO.
I love Coopers, but I haven’t been loving the contradictory advertising of late. The other day I saw an advert on my TV bagging craft beer lovers, then a day or so later I was going through my e-mails and an EDM advertising Coopers home brew craft beer kits appeared. You can’t slap down craft beer lovers with one hand then reach out for their micro-brewing money with the other.
I want to support Coopers, their beer is great and the brewery tour I took my Dad on a few months ago was amongst the best I’ve experienced.
I agree that exploring Seasonal Beers could do the trick, however they’d have to lay off the craft beer lovers in order to sell to them. Make a choice, stop flip flopping around.
Reminding Australian beer drinkers of the fact that they’re still 100% Australian owned and brewed is a key sales point that I think could be highlighted more.
How about blending the ‘local’ aspect with the Seasonal Range and pull focus on key Australian events and flavour traditions within the range i.e. a Chrissy beer that has some seasonal spice in it that complements a prawn on the bbq rather than a roast in the oven; or a limited edition range that focuses on local / indigenous flavours that we can find in our own wildlife / fauna (following the Roof Top Honey marketing model). There’s just so much scope there that they can work with, without having to overhaul their entire brewery.
C’mon Coopers, we want you to do well, you just need to provide a clear Call to Action that we can rally behind.
Fiona – cute and sensible.
On a serious note, I love Coopers. Their Pale Ale is a one of a kind beer – it hits the BJCP guidelines as the only uniquely Aussie beer. Maybe highlight its originality and that it existed as a craft beer before craft beer was a thing. And 100% Aussie owned.
Highlight the fact that they are producing their own malt. And get moving with supplying it to home brew shops, so that all grain brewers like me can get it outside of SA.
The other issue is that hipsters suck up, trash and dump – that’s what they do. By the time that Coopers react to making hop bombs and advertising it (or sours or something else) they’ll have moved on. So chasing the market won’t work. But maybe looking at heritage beers (Aussie or UK), which is what home brewers are playing with (HBers tend to pre-empt craft beer trends by a year or two). Ironically many of us have a stable IPA on tap at home, but the go-to beers for us tend to be outside of what is currently popular. Brut IPA is very much a divisive beer (as an example).
Just a few disjointed thoughts
Interesting article that makes no mention of their 4% profit increase. So sales are down but profits are up… you’d be forgiven for thinking that things are all bad at Coopers by the tone of this story.
https://www.beerandbrewer.com/23205-2/
Sponsoring the Bible society and the Liberal Party will have that effect.