Tim Cooper: Positives in an economic downturn

Tim Cooper

Positives in an economic downturn

Background

Impact on beer sales & home brew

Australian beer market snapshot

Importance of advertising

Environmental sustainability

Philanthropy

Early Times

• Thomas Cooper (shoemaker/stonemason) emigrated in 1852 from Skipton, Yorkshire

• Commenced brewing Norwood 1862; Kensington 1870; Leabrook 1881

• 12th of 15 Breweries in 1894

• Partnership of brothers until incorporation in 1923

Home Brew

• Coopers entered market in 1977 after change in legislation

• Originally 20 L bag of wort in a box with yeast sachet

• Low temperature evaporation plant in 1984 reduced volume of wort to 1.25 L

• Innovative packaging facilitated export

Today Coopers is the world’s largest manufacturer

and exporter of home brew kits

Domestic distribution through all major supermarket

and discount variety stores

Home Brew

Malt Extract

• Evaporation plant allowed Coopers to make malt extract

• Natural flavouring and colouring food product in the baking, confectionery and cereal industries

• Coopers now largest supplier in Australia and NZ

• Exported to major food and beverage companies in Asia

• Home brew and malt extract “backbone” before 1995 • Interstate beer focus: from 5% in 1970’s to 45% by 1990

• Draught beer (kegs) introduced 1983 • Beer growth from 1995

Post-recession premium beer market

LNA purchase of SAB

Sale of 120 hotels

KWP! advertising

Incremental gains in quality

Survival after 1970’s

The “Coopers” Advantage

• Independence and family ownership

• 147 yr heritage - “Hand-made by the Cooper Family”

• Brewing Products Division – extract evaporation

• Product Difference – cloudy, natural ales

• Interstate Distribution – Premium Beverages

• Passionate about our product & its quality


Background





Philanthropy

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

10000000

20000000

30000000

40000000

50000000

60000000Coopers Annual Beer Volume

Financial Year to end June

Lit

res

1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-090

50000

100000

150000

200000

250000

300000

350000

400000

Total Pale Alehl

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

0

2000

4000

6000

8000

10000

12000

14000

Outside SA/NT

SA/NT

Total Customers

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

1000000

2000000

3000000

4000000

5000000

6000000

Financial Year to end June

Kil

og

ram

s

Annual Home Brew & Retail MaltSales Volume


Background





Philanthropy

Australian Beer Market 1987-2009F

International Premium Beer Category

Lion Nathan Beer Volumes

Company share of domestic beer promotional advertising

Source: Citi ‘Thirsty Thoughts’ Market Data

LNA Beer Pricing vs CPI

LNA EBITA1987 -2009f


Background





Philanthropy

Promotional focus on mature brands

has fallen significantly


Low carb brands are attracting

biggest gains in promotional focus

Link between promotional activity and short term volume performance


Synovate survey (500 beer drinkers)

Advertising awareness: 1st mentioned awareness:

• Becks - 54% - 18%

• Stella - 49% - 37%

• Carlsberg - 21% - 21%

• VB - 35% - 3%

• Pure Blonde - 5% + 65%

• James Boag -10% + 23%

Why choose Coopers?


Being relevant to consumer

Engaging and aspirational

Creating a point of difference

Opportunity to belong

Advertising Campaigns

Year to Date Export Sales – June 2009

Total Sales $7,271,945

$1,100,000

BeerHome BrewMaltMisc

Why choose Coopers?






• Overtures to stop Court action, 2003-04

• JV offer, June 2005; Bid, 1st Sept 2005

• Shareholders subjected to LNA pressure

• Seven court actions brought by LNA

• Two EGMs December 2005

• 93.4% to 6.6% to remove LNA from Constitution

• Coopers shareholders focus on loyalty and tradition – “It’s not about the money!”

Lion Nathan Takeover Bid


Background





Philanthropy

Environmental Improvements

• Modern brewhouse – recycling of heat & water

• Vapour condensation

• Energy savings (~15%)

• Reduction in solid – NPC

• Cogeneration Plant (2003)

• Focus on carbon lifecycle footprint

Cogeneration Plant

• Annual power generation of 24,000 MWh

• 16,500 MWh exported to grid

• Long term certainty of pricing and security of supply

• Full redundancy for power and steam generation

• With co-generation, energy represents some 7% of the total emissions footprint - industry standard of ~ 20%

AIR INLET

FILTER

DIVERTERDAMPER

GENERATOR

STEAMHRSG

DUCTBURNER

GAS TURBINE

Cogeneration Plant

Aquifer usage with reverse osmosis

• 350 ML of River Murray water saved each year

• Water extracted from T2 Aquifer 200m below site

• Ground water too saline for direct use

• Reverse osmosis desalination plant

• Retentate pipeline to Barker Inlet wetlands


Background





Philanthropy

Introduction

Established in 2006, the Coopers Brewery

Foundation is the philanthropic arm of Coopers

Brewery, reinforcing the Cooper family traditions

of community involvement and social

responsibility. It represents a commitment by

Coopers Brewery to the welfare of Australians –

‘brewing support for the community’

Thomas CooperFounder

Cardiovascular Research Centre

Funds Received

32%

27%

18%

9%

14%

$597K since inception

Donations (incl Coopers & Staff)

Brewery Recycling (Coopers)

Brewery Tours (Coopers)

Speaking Engagements (Coopers)

Misc Fundraising, Bank In-terest, etc

Funds Distributed

28%

16%

15%

12%

14%

9%

6%

$543K since inception

Health

Medical Research

Community Groups

Education

Welfare

Children

Disabled

Why choose Coopers?






Thank you