An Australian beer rapidly rising in popularity as a low-carb alternative is set to be launched in New Zealand with alcoholic drinks brewer Mighty Craft (ASX: MCL) entering into an agreement with DB Breweries to distribute Better Beer in New Zealand.
The binding agreement will see the zero-carb, zero-sugar and low-calorie beer initially imported into New Zealand from Australia before DB Breweries commences local manufacturing of the brand themselves.
With its health-conscious properties, Better Beer sales in Australia have surged over the past 12 months since launching in July 2021 to the point where there was a temporary shortage in the lead up to Christmas due to its unexpected popularity when more than 3 million litres were sold in its first three months.
“New Zealand offers us an incredible opportunity to grow the Better Beer brand on an international scale,” said Mighty Craft Managing Director, Mark Haysman.
“DB Breweries has extensive sales, distribution, and brand building capability and owns some of the most iconic beer brands in the country, including Heineken.
“We are thrilled to be working with such a talented team that share our excitement about the potential of Better Beer. We also think this deal reinforces the massive achievement of the Better Beer team in launching its ground-breaking brands into Australia.”
Highlighting the potential for Better Beer in New Zealand, Haysman is confident that there is plenty of room to enter the market where Kiwis purchase approximately 298 million litres of beer annually.
In addition to entry into the market, Mighty Craft should have no concerns around maintaining the quality of the product given DB Breweries is a wholly owned subsidiary of brewing giant Heineken which manufactures a range of international beers locally in New Zealand.
Matt Wilson, Managing Director of DB Breweries said: “We are very excited about the potential of Better Beer in New Zealand. The brand taps into numerous key consumer trends in New Zealand and we are impressed with what the brand has achieved in Australia in such a short space of time.”
For the quarter ended 31 March 2022, Mighty Craft reported $19.4 million in revenue which represented a 105% increase on the previous corresponding quarter. That figure was largely driven by the $7.8 million in sales of Better Beer which was not on the market at the same time last year.
Given the huge success of Better Beer since its launch, Mighty Craft is increasing its investment in the brand with upscaling of their manufacturing facilities that will be supported by a recent $6.5m increase in their debt facility from $13.5m to $20m.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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