Gage Roads Brewing reports strong beer sales as part of ‘brand-in-hand’ strategy

Gage Roads Brewing ASX GRB craft beers sales up brand in hand Optus Stadium Fringe World Rugby 7s
Gage Roads Brewing Co recorded a "remarkable" June quarter including a growing taste for its craft beers.

Australia’s only remaining independent listed brewer Gage Roads Brewing Co (ASX: GRB) has published stellar company metrics indicating increased earnings and yet another quarter of strong growth.

The brewer is currently executing a “brand-in-hand” strategy that seeks to raise awareness of Gage’s brands with several metrics indicating a growing taste for the company’s unique range of craft beers.

The business has recorded a “remarkable” June quarter with sales around 4% higher compared to the same time last year.

Gage Roads said that the uplift in sales was driven by a 173% increase in sales to the independent retail channel and a 145% increase in draught keg sales, which includes sales to Optus Stadium – a 60,000 seat multi-purpose stadium that regularly hosts a variety of sports and entertainment events.

Furthermore, Gage Roads said that sales to the independent retail channel (a key driver of growth) were up 181% over the past financial year and now form a meaningful portion of all own-brand retail sales.

Single Fin Summer Ale and the Alby range of beers have “continued to outperform in this market and are key contributors to the improved result,” the company said.

Brand in hand

Gage Roads continued to deliver on key leading indicators during the second year of its five-year proprietary brand strategy.

The strategy intends to increase the awareness of its proprietary brands and expand them into broader markets, driving incremental sales from the previously untapped independent retail and on-premise channels to market.

In a bid to achieve its brand expansion, Gage Roads secured a potentially lucrative deal with Cricket Victoria in May, to become its official beer and cider partner.

As part of its brand offensive, Gage Roads says sales to Optus Stadium, Fringe World, Rugby 7s and other events are “on track to deliver earnings that fully offset the costs of the strategy.” The brand-in-hand marketing strategy is designed to promote trial and consumer awareness by utilising latent capacity to generate additional sales volumes at stadiums and events.

“The 2018 financial year was a fantastic year for the business and I’m pleased to see that all the key targets we have set as part of the five-year proprietary brand strategy are being delivered. Awareness for our brands has grown significantly and we look to build on that even further,” said John Hoedemaker, managing director of Gage Roads.

“The Optus Stadium deal and the other parts of our brand-in-hand strategy are delivering great results and I am really excited about the prospects for our brands. We’re also looking forward to adding Matso’s to our portfolio and broadening our offering of high quality brands to our customers,” said Mr Hoedemaker.

Mr Hoedemaker also confirmed that the successful year reported by Gage Roads is indicative of the momentum of the business and that “greater consumer awareness combined with expanded access to these channels is expected to continue to increase annual volumes of our brands, delivering further improved margins and sustained earnings growth through the shift in sales mix towards higher-margin Gage Roads products.”

Gage Roads’ share price surged on today’s news, finishing the day at A$0.13 – up 18.18%.

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