During an earnings call on Thursday, CEO Andy Thomas described the quarter as one that would “go down as a record for CBA.”
“The top line was not only healthy but, as expected, it was far more synchronized across the areas of depletions, shipments and sales,” said Thomas.
Depletions were up 9 percent in the quarter while beer shipments increased 13 percent and net sales were up 16 percent.
All brand families contributed to the growth, Thomas said, including a struggling Widmer brand that had its strongest quarter “in the last five years.” Widmer Brothers depletions were up 4 percent for the quarter and 2 percent year-to-date, on the strength of the company’s 30 Beers for 30 Years and 100 Days of Hefe campaigns.
“Kurt and Rob Widmer have been busy blitzing the local and national media getting the brands and their American success story in front of consumers,” said chief marketing officer Ken Kunze. “Hefe remains Portland’s no. 1 craft brand, and the 30th anniversary is proving to be a viable platform to re-engage wholesalers, retailers and consumers alike.”
“Our focus brands — Long Hammer IPA, Audible Ale, Game Changer Ale and KCCO Black Lager — continue to drive growth as we rebalance the portfolio,” said Kunze.
CBAs gluten-free brand, Omission, also grew in the “triple digits,” during the second quarter. According to IRIs most recent 13-week data set, Omission sales totaled 44 percent of the entire gluten-free beer segment, said Kunze.
During the call, Thomas continued to stress the importance of improving margin, attributing the company’s 230 basis point gain (to 32.8 percent) during the quarter to a variety of factors.
“The gains in gross margin came from not only more active management of our brand and product mix but more so from tighter management of our brewery operations and more forward-looking and less reactive management of our supply chain,” he said.
That tighter management of brewery operations is visible in CBA’s capacity utilization, which totaled 87 percent in the quarter.
Despite the positive trends, Thomas cautioned investors on the call about an increasingly competitive craft segment.
“Headwinds from an increasingly competitive market, heightened retailer demands in both the on and off premise, increasing complexity in the supply chain, heightened operational costs and share volatility in the market were ever present throughout the period and they’re all likely to intensify in the back half of 2014,” he said.
Nonetheless, CBA reaffirmed its full-year 2014 guidance to include depletion growth of 7 — 11 percent, with average price increases of 1 — 2 percent.