Gage Roads Brewing Co has executed a three-year extension, with a further two-year option, of its supply and distribution agreement with Pinnacle Liquor Group, a subsidiary of the recently re-named Endeavour Drinks Group (formerly Woolworths Liquor Group).
The agreement provides for a stepped reduction in minimum volume commitments from Pinnacle over the financial years of 2017 through to 2019, allowing Gage Roads to prioritise the supply and increase distribution of its higher-margin proprietary craft beers, while maintaining overall production volumes.
With a shift in the market away from mainstream beer consumption, Gage Roads is focused on the continued development of its proprietary craft beer portfolio, which is currently experiencing strong growth and is expected to be sustained well into the future.
Gage Roads Managing Director, John Hoedemaker, said the directors of Gage Roads worked collaboratively with Pinnacle to seek an arrangement that optimised the strategic objectives of both businesses.
“Under this agreement we maintain certainty over volumes through the continued support of Pinnacle, while also providing us with the scope to pursue our strategy of growing Gage Roads’ higher-margin proprietary brands nationally,” Hoedemaker said.
“Pinnacle’s continued support and ranging of Gage Roads’ products, while accommodating a reduction in contract brewing volumes, provides us with the capacity to focus on higher-margin craft products and the flexibility to open up other channels to market.”
Pinnacle has an option to extend the agreement for a further two years beyond 2019.