- Keytone Dairy (KTD) has signed a licence agreement with R&A Bailey and Co (Baileys) to distribute their non-alcoholic flavoured milk products
- The deal sees Keytone's wholly owned subsidiary, Omniblend, produce the products in house before distributing them to Caltex Petrol Stations around Australia
- The company hopes an agreement to sell the products in Woolworths owned BWS bottle shops is just around the corner, as well as international distribution into New Zealand, Hong Kong and Taiwan
- Keytone will pay a minimum royalty of $280,000 for the licence through to the end of 2022, and expects sales to be far greater than the buy in cost
- Company CEO, Danny Rotman, said the deal positions the company to hopefully gain licences to distribute other global brands' products in the not too distant future
- Keytone shares are up 7.14 percent following the announcement today, trading for 30 cents each
Keytone Dairy (KTD) has put pen to paper on a licence agreement with R&A Bailey and Co (Baileys) to distribute their range of non-alcoholic flavoured milk products.
The company hopes the deal, which was inked by its wholly-owned subsidiary Omniblend, will be a big money maker for the company, who will pay a minimum royalty of $280,000 for the license. The licence will run through to the end of 2022.
Keytone Chief Executive Officer, Danny Rotman, said the deal was a valuable contract win for the sales opportunity directly attributed to the Baileys-branded products, which presented significant upside.
"The licensing deal with a global company such as R & A Bailey & Co. and the Baileys™ brand validates the credentials of Keytone, positioning the Company for further distribution channel wins for the full proprietary product suite and provides a stepping stone for licensing of further global brands."Keytone Dairy CEO, Danny Rotman.
Luck of the Irish (cream) for Keytone?
The deal could be a stroke of genius by Keytone.
The manufacturing of the Baileys products will happen in KTD's Melbourne facility which will provide further margin benefits to the company.
The range includes Original Irish Cream Iced Coffee, Iced Mochaccino and Iced Butter Caramel & Sea Salt with new product development well advanced to bring additional premium ready-to-drink flavours to market in the near future.
The products are currently distributed nationally throughout Australia at Caltex Petrol Stations.
The company hopes a deal for further national distribution at the Woolworths owned Beer Wine Spirits (BWS) stores is just around the corner.
Keytone will also look to roll-out the licensed Baileys range through its existing Australian distribution footprint. Meanwhile the company said initial indications for distribution opportunities in New Zealand, Hong Kong and Taiwan are promising.
Keytone shares are up 7.14 percent following the announcement today, trading for 30 cents each at 1:50 pm AEST.