USA, OR: Craft Brew Alliance reports 2% rise in Q2 earnings
Craft Brew Alliance (CBA) reported on August 8 its second-quarter earnings, which were highlighted by a 2 percent revenue increase, to $61.8 million.
CBA attributed the uptick in net sales to increased shipments of the Kona brand, and increases in average unit pricing, despite continued Widmer Brothers and Redhook declines.
In a press release, the company – which also makes the Omission, and Square Mile Cider brands, and has partnerships with three smaller craft outfits – said net sales were up 4 percent, to $109.3 million, through the first six months of the year.
“It’s fitting that as CBA marks its 10th anniversary this summer, we also just delivered the best quarterly performance in our company’s history across all key dimensions,” CEO Andy Thomas, said via the release. “As we look to continue navigating the fast-changing social lubricant landscape, we are emboldened by our team’s track record of tangible strategic and operational results and bullish on a future rooted in our Kona Plus strategy and guided by our learnings.”
In Q2, CBA’s portfolio-wide depletions (-2 percent) and shipments (-0.4 percent) were both down, however. At the halfway point of the year, CBA’s company-wide depletions were down 3 percent, but shipments were up 3.5 percent.
Nevertheless, sales of Kona beer continued to accelerate as Q2 depletions grew 7 percent, driven by Big Wave Golden Ale, which grew 22 percent in the quarter. On-premise sales of the Big Wave brand were also up 35 percent in Q2, compared to the same period last year.
Through June 30, Kona depletions were up 5 percent.
During Q2, CBA’s overall gross margin expanded 550 basis points (bps), driven by a 640 bps expansion in beer gross margins, compared to 2017 levels and driven by “operating efficiencies, healthy pricing, and continued strong cost management.”
CBA also credited its partnership with Anheuser-Busch InBev, which owns 31.4 percent of the Portland, Oregon-based company, for helping to deliver continued revenue growth during the second-quarter. The company noted that its brands have been included in key wholesaler incentive programs and planning calendars.
CBA highlighted a cross-brewing arrangement with A-B, in which CBA brews at A-B’s Fort Collins, Colorado brewery, while A-B brews some of its craft offerings at CBA’s Portsmouth, New Hampshire, facility as well as its brewery in Portland, Oregon.
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