CBA Extends Distribution Agreement with A-B InBev; International Distribution and Contract Brewing Components Added


Craft Brew Alliance and Anheuser-Busch InBev today announced a new set of commercial agreements that will give the smaller CBA guaranteed distribution via A-B’s wholesalers in the U.S. through 2028 and expanded access to a variety of international markets as well as brewing capacity at many of the larger company’s 12 brewery locations.

In a joint announcement, the two companies said the new arrangements would “expand and strengthen the companies’ long-term relationship and create new growth opportunities for both companies.”

“We are proud of our long-standing relationship with ABI and have always been candid about the competitive advantage of our distribution arrangement, which allows CBA to independently manage our brands and still enjoy the benefits of being a valued part of AB’s exceptional wholesaler network,” Andy Thomas, the CEO of CBA said via the release.

Specific financial details of the new distribution arrangement were not available as of press time, but the two companies are expected to offer additional information during a call with investors and analysts today at 5:15 PM EDT.

CBA is “expected to gain significant financial benefits from these commercial agreements,” the company said in a press statement.

In a conversation with Brewbound, Thomas said the new U.S. distribution agreement, which gives CBA a ride on A-B distributor trucks through 2028 in exchange for a stake in CBA as well as distribution fees, would not alter A-B’s 31.6 percent ownership of CBA shares or its two seats on the company’s board.

Additional components of the two companies’ agreement were also added, including the ability for CBA to contract produce some of its beers at A-B’s 12 production facilities. The company plans to transition as much as 300,000 barrels of production to A-B facilities over the next 18 months, Thomas told Brewbound.

As a result, CBA will slowly begin to cease contract brewing at City Brewing in Memphis, Thomas added.

And building on its recent distribution deal with A-B subsidiary Ambev, CBA will also get broader access to international markets via A-B’s global operations, according to the new agreement.

All major markets not covered by CBA’s current export partner, Craft Can Travel, are including in the agreement, Thomas said.

The international distribution agreement also opens up the opportunity for all CBA brands — Widmer, Redhook, Kona, Omission — as well as partner brands to be sold through A-B’s global channels, but worldwide expansion will initially be focused on the Kona brand, Thomas added.

The new partnership arrangements began “some months back,” Thomas said.

“Absolutely,” Thomas said, when asked if the two companies discussed a buyout. “We have to always be mindful of what is in the best interest of our shareholders.

But ultimately, the two companies agreed that “walking along side of each other” and “independence” were the best ways to move forward.

“We both have a similar vision for how we want to elevate beer,” Felipe Szpigel, the president of A-B’s High End division, told Brewbound. “We came to acknowledge that we think much more alike than not. This is a win-win, and it’s great for us to have a better portfolio of brands to serve customers across the world as well.”

Brewbound will report additional information after today’s call. The two companies’ current distribution agreement can be found here.