Eastside Distilling said gross sales last year totaled $17 million, up 136% from a year earlier. The company said the increase in gross sales is attributable to organic growth in the Company’s Redneck Riviera product, as well as contributions from the Azuñia Tequila and Craft Canning + Bottling acquisitions completed during the year.
“In 2020, our focus is on transforming Eastside Distilling from a company with one primary lead product, Redneck Riviera Whiskey, to a ‘House of Brands’ that leverages our national distribution capabilities to also distribute our recently acquired Azuñia Tequila, as well as our Burnside Bourbon and Hue-Hue Coffee Rum brands,” said Lawrence Firestone, CEO.
“While COVID-19 is having a near-term disruption in our business, we have remained nimble and are adapting to the rapidly changing environment impacting all smaller spirits companies. Importantly, however, we are simultaneously focused on driving the long-term improvements and initiatives in our business that we believe will be drivers to long-term value.”
As part of the Company’s agreement concerning Redneck Riviera Whiskey, Eastside expects to be reimbursed 50% of various marketing expenses upon the eventual sale of the brand by the licensor if the licensing agreement remains in force. During 2019, the 50% amount eligible for reimbursement totaled $2.4 million. Cumulatively, the amount is $3.6 million.
The first quarter of 2020 started strong. However, starting in mid-February through the end of March, there has been a slowdown in sell-through as a result of COVID-19.
Additionally, the off-premise retailers have delayed the commencement of the planned Burnside Bourbon and Hue-Hue Coffee Rum national launch as a result of COVID-19.
The Company has enacted a series of initiatives to improve sell-through, including offering deep promotional discounts on Redneck Riviera Whiskey and Azuñia Tequila, as well as a focus towards online sales. Further, with on-premise shutdown throughout much of the country, Eastside has been ramping up support efforts for local off-premise independent stores and wholesalers by creating several programs aimed to energize the local marketplace. Likewise, as the shutdowns diminish, Eastside plans to expand upon these programs to support its off-premise accounts.