Rye River Brewing Company sees total revenue grow by 12%
Domestic retail and off-licence growth of 65% in 2020 offsets reduction in on-trade and export demand delivering overall 10% volume growth
1 June 2021 | 0
Kildare-based craft brewery, Rye River Brewing Company, has released its 2020 annual results which show an increase in revenue and profitability in a particularly challenging year. Total revenue for the year grew by 12% from €6,351,742 in 2019 to €7,102,066 during 2020 with operating profit increasing by 80% from €154,934 in 2019 to €279,650 for the year ended 31 December, 2020. A reduction of 44% in the company’s interest payments following the sale and leaseback of its Celbridge brewery executed in March 2020 contributed to an overall net profit of €156,398 for 2020 from a net loss of €62,617 recorded in 2019.
Now employing 56 (an increase of four on the prior year) in its eighth year of operation, Rye River continued to strengthen its status as the number one domestic retail independent brewer with overall volume growth of 10% in 2020 in the face of significant reductions in export and on-premise sales. The world-class reputation of its beers and retail presence of its brands enabled the business to react to the changed market dynamics as sales of beer shifted from the on-trade to large retailers and independent off-licences in the wake of Covid-19. This led to domestic retail performance growth of 65% year-on-year. Brands such as McGargles, Rye River Seasonal, Solas, Grafters and Crafty Brewing Company performed strongly, offsetting reduction in on-trade volumes of 75% and a fall in core brand exports of 89% respectively. Export sales through exclusive retail brands continued to perform well in 2020.
In addition to its robust financial performance during 2020, Rye River also enhanced its reputation as Ireland’s most decorated craft brewery. An unprecedented 30 awards were secured at the 2020 World Beer Awards (WBA), beating a record 21 awards earned the previous year. Among the WBA accolades were “most decorated brewery in the World” and “Best Stout in the World” award for its McGargles Export Stout.
During 2020 Rye River also became the first Irish craft beer brewery to achieve the British Retail Consortium Global Standard for Food Safety Certification which is a Global Food Safety Initiative recognised certification programme.
Notwithstanding the challenging market in 2020, Rye River invested over €400,000 in its ongoing capital expenditure programme to meet growing demand by adding a new packaging line and a further three new Irish-made 10,000L vessels bringing to 23 the number of fermentation vessels which, along with seven bright beer tanks, will allow the business to capitalise on the growing national and international demand for its award-winning beers.
Investment is continuing in 2021 with a move to a 24/7 brewing shift pattern in the first quarter of this year expanding production capacity in line with customer demand. Later this year a new packaging line costing €1.3m will be put in place to future-proof the business for further expansion and help adapt to the changing needs of consumers over time.
Trading volumes for Q1 2021 in a restricted, Covid-compliant market remain in line with the company’s business plan with work ongoing on a series of efficiency initiatives to manage costs in a way that helps offset increases in raw material costs as a result of Brexit-impacted supply chains and rising inflation. Brexit-related cost and risk mitigation initiatives include engaging in long-term supply contracts with strategic raw material supply partners and efficient supply chain management.
Legislative changes such as alcohol segregation in stores and the end of “multibuy promotions” for alcohol in January of this year has created some uncertainty for the craft beer category as the “Multi-buy” option was synonymous with Craft beer and a driver for sampling and trial in the category. Despite these challenges Rye River remains well positioned to take advantage of the growing demand for its world-class award-winning craft beers as the global pandemic recedes and demand resumes to normality with the business on target to achieve the 2021 EBITDA business plan.
According to the company, the recent appointment of Neil Everitt, renowned UK drinks industry executive, as chairman and former Deloitte partner, David O’Flanagan, to the board of the company have further enhanced the company’s governance and strategic capability which will support the business as it continues to realise and build on its domestic and international ambitions. Peter O’Donoghue, having served a five-year term as chairman, will remain on the board as a non-executive director.
“2020 was an exceptionally challenging year for the hospitality sector at home and abroad,” said Tom Cronin, founder and managing director of Rye River Brewing Company, commenting on the results. “The work done in recent years in having a more diversified channel strategy together with the hard-earned world-class reputation for the highest quality Irish craft beer meant our brands were able to respond successfully to the increased reliance on large retailers and independent off-licences during Covid-19. The strong results have enabled further investment in the business which, together with recent board additions, leaves Rye River well placed to increase sales as Ireland and our export markets emerge from Covid-19 and ultimately achieve the ambitious growth plans for the business.”