Gage Roads Brewing Co. said its strategy during the pandemic has ‘paid off’ although it hasn’t emerged totally unscathed from COVID-19 restrictions.
In its latest update to the ASX, it hailed the 54 per cent quarterly volume growth across the business, and the opening of the Atomic Beer Project in Redfern last month as “exceeding revenue expectations”.
“We are happy with our decision to open the venue almost 4 weeks ago and look forward to hospitality restrictions easing further in NSW over the next few months,” the update said.
It also reaffirmed its commitment to establishing more brewpub venues in “key markets” across the country. Its recently-announced project redeveloping A Shed on the Victoria Quay at Fremantle Harbour is on track with construction due to start in 2021, dependent on approvals.
In the trading update for the first quarter, it said that total Good Drinks volumes across the multiple brands including Gage Roads Brewing Co., Atomic Beer Project and Matso’s, are up 118 per cent on the same quarter last year.
This was driven by a 250 per cent increase in national sales – selling 700,000 litres to national chains – and a 140 per cent increase in sales to independent retail channels, through which the company sold 1.2 million litres.
However what it calls ‘brand-in-hand’ volumes, like the deal at Perth’s Optus Stadium, were down 50 per cent to 200,000 litres from the comparable period last year, which Gage blamed on fewer events being held due to restrictions.
Surprisingly draught sales were up 25 per cent to 500,000 litres for the quarter, despite venue closures, potentially due to the early reopening of WA venues.
Additionally, whilst it has previously signalled a move away from contract-brewed brands to focus on its own portfolio, contract-brewed brands increased to 1.1 million litres, a rise of 22 per cent.
Overall 3.1 million litres of Good Drinks brands were sold in the quarter, an increase of 54 per cent.
Despite the COVID-19 pandemic, it has reported “excellent momentum” to continue growth in the upcoming summer months.
It said that this performance provides the company with confidence it will be able to meet half-year volume, margin and earnings expectations.
“The first quarter of the financial year has historically been a slow sales period for us, so to see this much momentum and growth early on gives us great confidence that we will deliver on our FY21 expectations,” according to managing director John Hoedemaker.
“We’ve got a big summer ahead of us and we expect to continue to see strong growth in the remainder of the financial year,” he said.