Consumer Staples

Can Good Drinks make Coors beer take off in Australia?

Tue 24 May 22, 11:01am (AEST)
File photo of crisp beer in a mug
Source: File photo of crisp beer in a mug

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Key Points

  • Good Drinks Australia wins distribution agreement to market USA’s 2nd largest beer brand in Oz
  • Good Drinks expects EBITDA growth of $3m-$4m
  • Company also picks up Miller Chill, Miller Genuine Draught and Molson Canadian

Good Drinks Australia (ASX:GDA) will market and distribute well-known US alcohol brand Coors inside Australia along with three other products; Miller Chill, Miller Genuine Draught and Molson Canadian. 

The move comes as Good Drinks executes a distribution agreement with Molson-Coors, the North America headquartered company that owns the four products outright. 

Whether or not the American brands will take off in Australia beyond the tastes of those who find novelty in foreign imports remains to be seen, but Good Drinks is optimistic on the status of Coors in America; noting the Molson Coors brands collectively represent some 15 million litres each year. 

"Based on current volumes sold over the last twelve months...[the] partnership is expected to deliver an additional $35m-$40m in revenue and $4m-$4m EBITDA for Good Drinks," the company said. 

Molson Coors is listed on both the NYSE and TSX and boasts a heritage profile of some 200 years' operational history, in some form or other. 

An infographic outlining Good Drinks Australia's commercial strategy objectives
An infographic outlining Good Drinks Australia's commercial strategy objectives

Good Drinks targeting eastern coast

Good Drinks perceives the distribution rights attached to the four products to reflect products allowing strong margin growth. 

The company perceives the east coast market of Australia in particular as "underweight," implying the company believes the American products will take off with Australian drinkers. 

A stepping stone towards GDA’s larger goals 

By 2025, Good Drinks is targeting 25 million litres of production of alcohol brands that it owns; should the Molson Coors products take off, the cash that comes from that will surely help the company reach that target. 

"The Molson Coors brands complement the current Good Drinks product range...and delivering further access to the significant Premium International beer category of the alcohol market, without competing directly with our existing brand portfolio," the company notes. 

As part of its Australian onboarding, the Molson Coors brands will be manufactured by Coopers Premium Beverages; and some will be imported. 

Good Drinks notes this will not impact its own production capacity. 

Good Drinks' three month charts versus the consumer staples index
Good Drinks' three month charts versus the consumer staples index

 

Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at [email protected].

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