Aussie fans of American beers will soon have a lot more access to leading brands Miller and Coors thanks to an exclusive distribution deal signed by Good Drinks Australia (ASX: GDA) to bring the refreshing taste of those top brands throughout the Australian market.
The appointment by Molson Coors (NYSE: TAP) is described as a “transformative” for Good Drinks Australia which is expected to deliver an additional $35-$40 million in revenue and $3-$4m EBITDA as the exclusive distributor of Coors, Miller Genuine Draft, Miller Chill and Molson Canada brands in Australia.
At present, those aforementioned brands are primarily distributed via Dan Murphys as non-mainstream beers but that is likely to change with GDA having a significantly larger distribution network, that includes Dan Murphys, as well as independent retail stores and their own hospitality venues.
“The Molson Coors partnership is a game-changer for our business and delivers a step change increase in revenue and earnings whilst also expanding avenues to market for Good Drinks proprietary brands,” said Good Drinks Australia Managing Director, John Hoedemaker.
“Molson Coors has a strong and vibrant brand portfolio with a significant following in Australia, a deep history in the USA and is a truly global business. The decision by Molson Coors to partner with Good Drinks Australia is a further vote in confidence in our national sales and marketing team and our capabilities to grow brands in the Australian beer market.”
The brands to be distributed by GDA represents approximately 14 million litres per annum that will contribute to their earnings and is part of their strategy that has positioned Good Drinks Australia as the #1 independent beer supplier to the national beer market.
It further complements the existing range of international beer companies engaging Good Drinks Australia for distribution having signed similar deals with Magners and San Miguel.
Molson Coors APAC Regional Director Shaun Morton said: “I am really pleased that we have secured a long-term distribution agreement with Good Drinks. We have managed to find a trusted business partner in GDA that will help us deliver on our growth ambitions on the Australian Market.”
“Australia is a priority market for Molson Coors and as such, GDA’s local market expertise and nationwide distribution coverage provide an excellent platform from which to develop our portfolio.”
While Good Drinks was hit hard during the pandemic which resulted in closures and delayed opening to their hospitality clients and owned venues, the Company has rebounded alongside the surge in hospitality since Australia removed lockdown restrictions across all States.
This enabled the Company to launch their flagship venue in January 2022 located on the bustling Fremantle Harbour as an all-encompassing entertainment venue. In its first three months of operation, the venue served more than 250,000 pints and 150,000 meals to eager Australians.
For the half year ended 31 December 2021, Good Drinks Australia reported $32.7m in revenue which represented a 15% increase on the previous year, which delivered $6.0m EBITDA from 10.6 million litres of drinks sold. Of that 6.9m litres was of Good Drinks owned brands, a figure they are targeting to increase to 20m by 2025.
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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