Gage Road Brewing (GRB) took a big leap forward in achieving its plan to become profitable by 2010, reporting a net loss of $1,162,000 for the six month period ended December 31 compared to $2 million for the corresponding period in 2007.
The Western Australian craft brewer also released a number of new products in the period, including low-carb KUTT, Blue Angel cider and Wahoo, which has grown to become its best-selling product since the beer was launched last April, accounting for 48 per cent of sales.
GRB also commenced a joint venture with New Zealand’s Ballydooly Cider Company to manufacture and market cider products in Australia during the period in line with a new product development strategy targeting mainstream drinkers.
However, market penetration and sales continued to be dogged by inefficient distribution – a problem the brewer has sought to remedy with the sacking of its former distributor, Constellation Wines Australia, and the appointment of VOK.
But the number of retail outlets selling GRB products saw no growth in the period and the release of new products was slower than expected as a result of delays in bottle supply and distribution.
“The lack of growth in these results and their moving annual costs highlights that there have been a number of challenges along the way,” said GRB chief executive, Nick Hayler.
“The company’s foremost challenge is to increase the number of outlets that our products are ranged in and the value-per-outlet pull through. We have continued to explore ways to improve this position as it ultimately determines the success of our brands.”
GRB shares were trading at 2 cents at midday today (Mar 30) compared to 1.5 cents 10 days ago. No dividends were declared for the period.