Coopers maintains growth momentum as Australians’ alcohol preferences change

Posted by AFN Staff Writers on 28th January 2014
Coopers has continued to grow, despite general Australian beer downturn

Australian beer company Coopers Brewery enjoyed record beer sales for the 2013 calendar year, moving beyond the 70 million litre mark for the first time in the Company’s history, as market research organisation IBISWorld findings showed Australians’ alcohol preferences are moving towards more ‘boutique’ alcohol products.

Coopers beer sales continue to grow

The Company said total beer sales in 2013 reached 72 million litres, an increase of 4.7 per cent on the 68.8 million litres sold in the calendar year 2012.

“December 2013 was our highest selling month on record, with 8.55 million litres of beer sold,” said Dr Tim Cooper, Coopers Brewery Managing Director. “This was 13 per cent more than the previous record month in December 2012,” he said.

Coopers Brewery said during December 2013 it also enjoyed record sales of Coopers Original Pale Ale (almost 400,000 cases) and Coopers Sparkling Ale (100,000 cases).

“A significant portion of our growth for 2013 can be attributed to our international beer portfolio, as well as good growth from the mid-strength Coopers Mild Ale,” Dr Cooper said. “Strong sales in Pale Ale and Sparkling Ale also drove the volume increase,” he said.

Coopers Brewery brews Carlsberg and Sapporo under contract and also distributes Mythos and Kronenbourg 1664 through its distribution company Coopers Premium Beverages.

Coopers grows as beer consumption in Australia falls

Dr Cooper said the ongoing growth for the Company at a time when total beer consumption in Australia was falling was pleasing.

“Coopers has enjoyed average growth of more than 9.8 per cent per year for the past 20 years and now represents more than 4.5 per cent of the total Australian beer market,” Dr Cooper said.

Australian Food News reported in November 2013 that Australian beer brands were on the decline, while imported beers appeared to be increasingly popular, and in September 2013, Australian Food News reported that beer consumption generally in Australia was at a 66 year low.

Australians favouring ‘boutique’ beverages

Coopers Brewery seems to have avoided these trends, perhaps because its brews are closer in style to so-called ‘boutique’ beverages, which are gaining favour with Australians, according to market research organisation IBISWorld.

While Australians’ expenditure on alcohol continued to increase at a steady pace — growing by an annualised 2.8 per cent per year — IBISWorld found that overall consumption had actually fallen, decreasing by an annualised 0.7 per cent over the five years through to 2013-14.

In 2013-14, IBISWorld said it expected overall alcohol spending to again rise by 2.8 per cent to $28.1 billion, or $1,193.70 per capita, while consumption is forecast to stay flat at 10.03 litres per adult. Looking to 2018-19, IBISWorld said it expected total spending to grow to $32.3 billion, while alcohol consumption was anticipated to fall to 9.98 litres per adult.

“The key reasons behind this trend of flat consumption and increasing spend are changing tastes and preference, as well as rising costs,” said Karen Dobie, IBISWorld General Manager (Australia). “Australia is a nation of beer drinkers, but our palates are changing. There is a growing preference for premium, expensive and boutique beer and wine, as well as a boom in cider consumption,” she said.

Australians consuming more alcohol at home than on-premises

Australians are consuming more alcohol at home than at licensed establishments, with liquor retailers receiving a larger share of total alcohol spending than pubs, bars and clubs, according to IBISWorld. Australians are forecast to spend $17.7 billion at liquor retailers in 2013-14, compared with $10.4 billion at pubs, bars and clubs. This trend is expected to continue over the next five years, with alcohol spending on-premises and at liquor retailers forecast to grow by an annualised 2.3 per cent and 3.1 per cent respectively.

Alcohol spending in Australia by product

When it came to product performance, IBISWorld found traditional beer continued to account for the highest share of alcohol expenditure, but a change is underway. Wine (including sparkling) is anticipated to overtake traditional beers as the number one product category by 2018-19, while cider is expected to continue outstripping other categories in terms of annual growth.

The bottom line on beer

While traditional beer continued to face challenges from declining overall consumption due to growing health awareness and changing consumer preferences, IBISWorld said it expected that the growing popularity of higher margin premium and craft beers would boost the industry. Major players are expected to benefit more than others as the industry consolidates over the next five years.

“Traditional beer brands are losing market share,” Ms Dobie said. “Australia’s two big brewers — Fosters and Lion — are combating this by bringing in domestic products of premium and foreign beers and acquiring local boutique brewers,” she said.

Australian Food News reported earlier in January 2014 that food and beverage company Coca-Cola Amatil had played a similar card, returning to the beer and cider category with the launch of a range of premium beers and cider.

Cider consumption climbing

Particularly popular with younger drinkers, cider is expected to grow from generating just $0.9 billion in revenue in 2013-14, to $2.2 billion in 2018-19, according to IBISWorld.

“Hot Australian summers, the stigma of high-carb beers and the crisp, refreshing taste of cider will all contribute to the forecast growth of 19.5 per cent per annum in cider,” Ms Dobie said.

Wine revenue sparkles

Lighter white and sparkling wines continued to grow in popularity among female drinkers, while more-exotic varieties such as sangiovese and tempranillo also gained traction, according to IBISWorld.

“The Australian wine industry is slowly recovering from oversupply and this — coupled with a growing consumer preference for wine — is expected to result in healthy revenue growth over the next five years,” Ms Dobie said.

Spirits remain stable

With the high-alcohol content of spirits deterring some, IBISWorld said it expected that spirits’ share of alcohol consumption in Australia will remain relatively flat over the next five years.

“Revenue growth for the spirits segment will predominantly be driven by sales of premium and prestige products, as Australians continue to cut their overall alcohol consumption,” Ms Dobie said.

RTDs on the rise

Following a period of falling consumption with the introduction of the alcopops tax in 2008-09, innovation and product development in the ready-to-drink spirits category is on the rise, according to IBISWorld.

“The introduction of new flavours and low-carb versions of RTD cocktails has assisted this segment in regaining popularity – particularly among younger drinkers”, Ms Dobie said.

How does Australia compare?

Despite falling consumption levels, Australia ranks 44th in the world for per capita alcohol consumption,  according to the World Health Organisation’s latest ‘Global Status Report on Alcohol and Health’. Australia ranks above the United States and New Zealand, but is some way behind world leaders such as Moldova, Russia and South Korea.

On the global stage, traditional beer and wine continue to be favoured in most countries, with Australia leading the pack in the move towards craft beer and cider.