I really do like their new strategy of down ramping the contract brewing and up scaling their own product for higher margins. This will take some time to deliver and hence patience is required. It would have been beneficial to see their own product ramp up as quick as the decline in the contract side to keep the revenue and hence earnings up to at best earnings neutral but it is not to be. However, Winning this award shows they are great Brewers and will go a long way in helping them with this new strategy. A solid announcement on a good award win.
Two birds who they contract for is also doing well which is great to see. Let's be honoust, the Woolworths brand being sail and anchor is an average beer so it was a matter of time before this happened.
Brewing beer is one thing, and running a profitable business in a competitive market which is what is unfolding in the local beer and craft beer market is another. If they can execute this new strategy the earnings will follow along with the share price. Maybe even a takeover from one of the two big players as the main stream beer segment keeps declining to the shift in craft beers.
GRB Price at posting:
5.8¢ Sentiment: Buy Disclosure: Held
