Coca Cola Amatil boss Terry Davis has a million dollars’ worth of beer to deliver to new customers this week.
The soft drink distributor is back in the beer market after an enforced two year hiatus brought about by the sale of its brewing operations when SAB Miller took over Foster’s in 2011.
Coca Cola Amatil (CCA) is entering the profitable but increasingly crowded premium beer market with several Australian brews, plus Coors and Blue Moon beers made by North American brewing giant Molson Coors.
The first orders are relatively modest in scale but Mr Davis is expecting much larger demand to follow.
“I’m not unhappy that we’ve got our first million dollars worth of sales for delivery this week,” he told AAP.
“We don’t have a revenue target for the first year – this is about getting the brands into the marketplace.”
“Our medium term target is to get to 20 per cent of the Australian premium beer and cider market and our goal is to be the third force in beer brewing and distribution in Australia – that’s our goal.”
Mr Davis says he won’t be competing with big volume beers such as Toohey’s New and Victoria Bitter.
Instead CCA will target the premium international brands owned by the big two of Australian brewing: Kirin-owned Lion and SAB Miller-owned Foster’s.
Mainstream beer consumption is at a 60-year low in Australia but craft and premium beers are a growing segment.
“We are very much a craft brewery with big distribution and sales muscle,” he said.
CCA has joined with Australian winemaker Casella to establish The Australian Beer Company, which makes beer at a brewery in Griffith, New South Wales.
It will initially make Alehouse full and mid-strength draught beers, Arvo premium lager and Pressmans Original Australian Cider.
Molson Coors chief commercial officer Brett Vye said the Australian beer market was one of the world’s most profitable and CCA had presented as an attractive partner.
Mr Davis said CCA won’t have to make the same margins as his major competitors to turn a comfortable profit.
“Our cost of doing business ratio is so much lower than the brewers because we have such a pervasive distribution structure,” he said.
“So somewhere around 15 per cent EBIT (earnings before interest and tax) margins are more than acceptable for us. That’s our near term target.”
