Woolworths has signed a three-year supply deal with WA-based craft beer company Gage Roads. The partnership forms part of the brewer’s $12.4 million expansion plan to increase its capacity and establish itself as Australia’s leading craft contract brewer following the closure of Lion’s Swan Brewery.
Under the deal, Woolworths will increase its minimum supply from Gage Roads to one million cartons a year at a time when sales of traditional beers are slowing and premium beer brands are also showing signs of maturing. Gage Roads will double its brewing capacity to three million cartons per annum by 2014, as well as cutting operating costs by 50 per cent.
Gage Roads Brewing Company makes its own craft beer brands Wahoo Premium Ale, Gage, Sleeping Giant and Atomic Pale Ale which will be sold at Woolworths, alongside Woolworths’ own brands Dry Dock, Clipper Light, Castaway and Sail & Anchor.
Woolworths holds a 25 per cent stake in Gage Roads Brewing.
At the Gage Roads Brewing annual general meeting earlier this month, managing director John Hoedemaker said that Gage Roads was in a “good position to benefit” from the closure of the Swan Brewery coupled with the strong trend towards craft beer sales.
“With our increased capacity and lower cost structure, Gage Roads is planning to increase its draught beer presence in WA. With the demise of Swan Brewery, the banner of ‘largest WA brewery’ passes to Gage Roads,” Hoedemaker said.
