Craft Brewers Alliance Focusing on ‘Off-Premise’ Growth

Craft Brewers AllianceCraft Brewers Alliance had their third quarter earnings conference call this morning and a few important details emerged about the state of Craft Brewers Alliance which consists of the Widmer Brothers, Kona Brewing and Red Hook brands.

On Monday, we posted the press release of their Q3 earnings statement, and the call today highlighted a few of the more important takeaways.

As expected, much of CBA’s growth was attributed to the Kona brand performing well in existing markets. The Longboard Lager offering grew by 30 percent in STR’s, while the Aloha series (which includes Wailua Wheat) grew by 40 percent.

The company also reported that Widmer’s rotator IPA, Red Hook Pilsner and Kona Aloha series are 3 of the top 4 performing craft brands in SIG growth channels.

Redhook continued its turnaround, with growth accelerating to 5 percent as the Long Hammer IPA offering posted double digit growth.

Widmer Citra Blonde Summer BrewCBA also reported that the Widmer Hefeweizen challenges have ‘moderated’ while seasonals have grown by 50 percent (due in large part to the citra blonde summer offering).

President of Commercial Operations, Andy Thomas, attributed much of the growth to the success of their off-premise accounts.

“Off-premise is clearly driving the charge right now,” he said. “On-premise is becoming a fiercely competitive channel, with fewer consumers and more people trying to get them to choose their offering. Our strategy is to pick our battles and we are going to take our best shot at the on-premise while at the same time, starting to make sure that we can play to our competitive advantage.”

Their advantage? Seamless national distribution and a national sales organization.

Thomas also shared their distributions strategy, which centers around ‘focused growth.’

Redhook“What we are trying to do is have a focused brand strategy in our growth markets,” he said. “We are not just throwing everything at the wall — we are trying to make sure that our first foot forward is really on solid footing. You will see more of it in 2012 as we start to expand back into the Midwest with a very focused portfolio.”

Thomas said that the Kona brand would not be making its way into the Midwest next year but did tease a ‘new year-round offering,’ which he said will be made public towards the end of 2012.

Thomas said CBA expects to see a shakeout in the craft beer industry but could not speculate on a potential timetable.

“There is nothing short term about our strategy — we are all about building long term, sustainable profitable growth while maximizing short term opportunities,” he said. “It is all about building the foundation and all about making sure we are not a one-hit wonder.”

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