Sales, profits dip at ’cautiously optimistic’ Coopers Brewery

SA’s favourite brewer will look to get its products in front of more new customers in a bid to fight a softening market – sales are down 3.5 per cent in the past financial year.

Dr Tim Cooper at the company’s Regency Park brewery in South Australia.

Product innovation and geographic expansion will be key to Coopers Brewery’s growth after sales volumes and profits took a hit last financial year, the company said on Monday.

But Coopers managing director Tim Cooper said there was always a “healthy tension’’ at the South Australian brewer between tradition and a push for the company to stretch its wings.

“I think the big retailers might like us to be more innovative, but we’ve improved our performance in the last three years or so with products like Session Ale which became Pacific Pale Ale and XPA, and those two products are still doing quite well for us,’’ Dr Cooper said.

“Mid-strength continues to grow, that product has been out for about 15 years but it has kept on growing ... and now of course we’ve got the 3.5 Dry.’’

Coopers has had success in recent years with annual “seasonal” releases, such as the Hazy IPA and the currently-available Regency Park Red Ale, while the XPA, first released in 2019, has become a permanent fixture.

Dr Cooper said the company was committed to “innovating as much as we can’’, but there was a risk that growing niche, new products simply eroded sales in core lines – something which naturally was to be avoided.

But for Coopers, which commands about 20 per cent of beer sales in its home market of SA, there was still plenty of room to develop its core business on the national stage, Dr Cooper said, adding they were “cautiously optimistic’’ after a “commendable’’ result last year.

Sales last financial year fell 7.4 per cent in Victoria and Tasmania, 4.9 per cent in NSW and 4.6 per cent in SA. Sales in Western Australia grew 2 per cent and Dr Cooper said volumes were up 19 per cent over the past three years.

“While the overall market remains tight, we are seeing some positive signs emerging,’’ Dr Cooper said. “Encouragingly, keg sales have recovered somewhat since June 30 and currently tracking ahead of last year’s results. Production levels at the brewery are also ramping up as we increase our contract manufacturing of more international brands.”

Coopers is now brewing Miller genuine Draft, Miller Chill and Coors brands under a partnership with Molson Coors Beverage Company.

Dr Cooper said “getting existing products in front of people, especially people in the other states’’ was a key element of the growth strategy this year.

Last financial year Coopers’ beer sales fell 3.5 per cent on the previous period to 82.3 million litres, in line with the domestic beer industry experience over the same period.

Pre-tax profit was $27.3m, down from $36.5m, with a 13.5 per cent decline in keg sales, a 9.3 per cent drop in malt sales and higher logistics costs behind the fall.

Coopers has initiated a share buyback for its more than 180 shareholders at $405 per share, and increased its fully franked dividend to $14 per share, up from $13.50.

Dr Cooper said the $15m expansion of the company’s warehouse at its Regency Park headquarters was progressing well, while the company expected to break ground on its $50m visitor centre and microbrewery on site around the end of November.

That project, which will also include a whisky distillery, is expected to take 18 months to complete.