The Craft Brew Alliance announced its full year 2011 results yesterday afternoon, following it up with an earnings call this afternoon.
During today’s call, CEO Terry Michaelson said that “2011 was an extremely important year for CBA.” Michaelson said the company’s focus on building a unique craft strategy over the last three years has positioned them for long-term growth. Michaelson believes that growth is being driven by consumer demand for quality and variety in beer.
Total shipments for the company were up 11 percent to over 670,000 barrels, while net sales increased 13 percent to $149.2 million. And it appears the company is anticipating further growth: CBA, which is made up of Widmer Brothers Brewing, Redhook Brewery and Kona Brewing Co., currently has an approximate capacity of 900,000 barrels and is expecting to increase that to over 1 million barrels by the end of the year, according to a filing with the SEC.
Portfolio Breakdown
The company had mixed results by brand, with Widmer Brothers shipments down slightly at 2.2 percent, Redhook up slightly at 3 percent and Kona up 23 percent.
While shipments were down, Widmer’s revenue grew nevertheless, propelled by new higher value offerings. The ‘Brothers Best’ variety packs were up 60 percent while the Rotator IPA series accounted for 6 percent of the company’s Q4 sales.
Redhook experienced its strongest year of growth in the last 5 years despite price increases between 6 and 11 percent in various markets. The brand saw a volume increase of 14 percent on its Long Hammer IPA while variety packs enjoyed 30 percent growth in Q4 compared to 2010.
Kona Brewing shipments were up 23 percent in Q4, driven by the success of Longboard Lager. The company also reported volume growth of 15 percent in Q4 for the Aloha series.
2012 Outlook
Andy Thomas, the president of commercial operations for CBA, said he “continues to see a dynamic beer market” and expects craft and imports to continue driving market growth.
“We believe this vibrancy of the craft category, as manifested by new SKU’s and new brands, is good for the industry,” Thomas said.
Thomas backed that up by noting that Widmer Brother will sell 23 different offerings in 2012, up from 11 just two years ago.
One of those new offerings will likely be the new project ‘Omission.’ Brewbound.com asked CBA marketing communication manager, Brady Walen, about the project, which is expected to be officially announced soon. Walen said it’s a new brand being added to the CBA portfolio but will be brewed by Widmer Brothers.
Little else is known about the project, but word in the blogosphere is that Omission will be a new line of gluten-free beers. This theory fits the brands tagline, “It isn’t just what we took out, it’s what we left in.” There was no mention of Omission on today’s call.
Thomas said Redhook will begin selling Long Hammer IPA in cans before the summer selling season while Kona Brewing will continue to focus on Longboard Lager.
For investors tracking the stock price on the NASDAQ, the old ticker symbol of HOOK will change to BREW, reflecting more consistency with the recent re-brand to Craft BREW Alliance.