ASX-listed brewery Gage Roads has announced that it is raising up to $8 million to significantly upgrade its canning and bottling capacity.
The raising, which will see a share placement at approximately $0.095 per share, comes following the success of a trial release of its flagship Single Fin in cans.
The funds will be used to upgrade its canning equipment, its bottle filler and installing a flash pasteuriser to enable the brewery to move away from tunnel pasteurisation.
Gage Roads’ Chief Strategy Officer Aaron Heary said the move was further progress of the company’s Returning to Craft strategy announced in 2016.
“When we sat down and wrote our five-year strategy, really key to that was about not cutting corners on the quality,” he said.
“We recognised that there was probably some room for improvement, particularly with the way our bottles were being filled. It was always in the plan to go and do this at some point.
“We see that now is the right time, especially since our business is just growing so fast. We really want to get the best beer into people’s hands.”
Heary said that while tunnel pasteurisation is ‘probably the most micro stable’ he felt that it can have some ageing effects on the beer.
Like other established breweries, Heary said the company had been weighing up a move to cans for some time.
“We’ve been toying with the idea of putting a can line in for probably five years,” he said.
“Before you saw the explosion in craft beer in cans in this country, you could sort of see it happening overseas, and this is something we want to do and the timing was never quite right for our business.
“Then about 12 months ago we decided, ‘look, this is something we have to do’.”
He said that by then the calls for cans had become overwhelming.
“The number one consumer request coming through for our brand was ‘we love your beer, but can you please put it in cans’,” Heary said.
“They said, ‘I want to take it out on a boat’, or ‘I want to take it fishing’, or places where bottles generally don’t perform.”
“And also our ‘Brand in Hand’ strategy was also demanding cans as well, where a lot of venues, a lot of events and places where we really get a lot of traction, didn’t want bottles and they didn’t necessarily have to set up bars.”
A year ago the brewery installed a small Cask system as a trial.
“We put Single Fin into cans, which is one of the first brands we did,” Heary explained.
“And it went really really well. We had a lot of acceptance from the consumer, they loved it, they wanted more of it, we sort of were reaching a point where we were unable to keep up with the demand and we couldn’t unlock the major chains because the small system wouldn’t allow us to do that.”
Heary said a contract is yet to be signed for the new canning line, but it would be “one of the world’s most reputable machinery manufacturers,” and able to handle 400 cans a minute.
“I think the consumer and the trade are really becoming much much more well educated and understand what good beer is and we really need to keep pace with that.”
Heary said the current line will be shifted to the new Sydney brewery.
Gage Road shares are currently in a trading halt. They were trading at $0.098 prior to the halt.