• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Advertise
  • About Craft Brewing Business

Craft Brewing Business

Professional Insight, Unfiltered

Craft Brewing Business Craft Brewing Business
  • News
  • Business & Marketing
  • Packaging & Distribution
  • Equipment & Systems
  • Ingredients & Supplies
  • Webinars & White Papers
  • News
  • Business & Marketing
  • Ingredients & Supplies
  • Packaging & Distribution
  • Equipment
  • Webinars & White Papers
  • COVID-19

Craft Brew Alliance posts strong financial return in 2018, continued momentum for Kona

March 7, 2019Chris Crowell

Craft-Brew-Alliance

The Craft Brew Alliance showed strong financial results for the fourth quarter and all of 2018, riding the continued momentum of Kona Brewing, which grew depletions by 11% in the fourth quarter to drive an 8% increase – representing approximately 30,000 incremental barrels – in full-year depletions. The beer corporation also achieved its highest-ever total company gross margin and beer gross margin.

“In 2019, we will look to increase topline growth, continuing to accelerate Kona’s momentum and unlock the full potential of our newly acquired brands, while building on our strong foundation,” the earnings release stated. “We will also leverage CBA’s new pH Experiment business unit to anticipate market trends and quickly bring innovative new products to market, as announced March 5, 2019”

CBA’s partnership with Anheuser-Busch is obviously a huge factor in these results. As part of its brewing agreement, through which it leverages A-B’s Fort Collins, Colo., brewery to brew up to 300,000 barrels a year at a savings of $10 per barrel, CBA came closer to hitting its estimated $3 million in annual cost savings in 2018.

“Additionally, we expanded on our contract brewing arrangement, producing Goose Island and Virtue Cider in our Portsmouth and Portland breweries,” the company stated. “As part of our enhanced commercial agreement, Kona was included in key wholesaler incentive programs and planning calendars. In 2019, we will look to build on this success and increase participation with additional wholesalers throughout the U.S. Through our international agreement, we expanded on a successful test pilot with Kona in Brazil, launching a significant commercial investment and cross-brewing arrangement to support Kona’s growth in the world’s third largest beer market.”

Anheuser-Busch’s option to buy CBA outright this year has to be looking pretty tasty at this point.

Kona insight

Kona’s 2018 volume growth alone is more than the total volume of 80% of today’s U.S. craft brewers, and combined with 2016 and 2017 growth, the brand has added over 125,000 incremental barrels in the last three years alone. Big Wave Golden Ale is the biggest mover, posting a 30% increase in fourth quarter depletions, driving a 26% increase in depletions for the full year. Kona also expanded its national portfolio of island-inspired craft beers during the year with the launch of Kanaha Blonde Ale, a refreshing 99-calorie ale that was the seventh largest new craft brand as measured by Nielsen.

2019 outlook

  • Depletions and shipments each ranging between an increase of 5% to an increase of 8%, reflecting a significant increase in commercial investments and insights from our consumer research.
  • Average price increases of 1% to 2%, reflecting improved revenue management capabilities.
  • Gross margin rate of 34.5% to 36.5%, reflecting increases in net revenue per barrel, continued improvements in brewery operations, lower fixed overhead, and ongoing efforts to stabilize our pub operations.
  • SG&A ranging from $70 million to $74 million, primarily reflecting reinvestment of cost savings into our sales and marketing infrastructure, as well as expanded consumer and trade programming.
  • Capital expenditures of approximately $15 million to $19 million, including expenses related our new Kona brewery going online in 2019.
  • Effective tax rate of 27%.
Craft-Brew-Alliance
Craft Brew Alliance adds two new Anheuser-Busch VPs to board
Craft-Brew-Alliance
Craft Brew Alliance partners with Ambev to send Kona beers to Brazil
Craft-Brew-Alliance
Craft Brew Alliance partners with Cisco Brewers in Massachusetts
Craft-Brew-Alliance
Craft Brew Alliance to distribute for Appalachian Mountain Brewery

Reader Interactions

Comments

  1. Josh Daves says

    March 7, 2019 at 8:11 am

    Thats what happens when they buy up craft. Solid business investment. For them.

    Log in to Reply

Leave a Reply Cancel reply

You must be logged in to post a comment.

Primary Sidebar

Latest News

  • Colorado’s Resolute Brewing shares its 2022 year in review (rebrands and invests in local malt)
  • 4 steps to understanding the filtration process in craft beer
  • Beyond beer: Examples of craft breweries exploring canned cocktails
  • San Diego breweries gear up for Pucks & Pints Charity Hockey Game

Sign up for our newsletter

unsubscribe from list

Most Popular Today

Recent Features

  • 4 steps to understanding the filtration process in craft beer
    March 20, 2023
  • newbelgium_2023_wildnectar-shopping-basket_family_IMG_2Beyond beer: Examples of craft breweries exploring canned cocktails
    March 16, 2023
  • brooklyn 35 featureBrooklyn Lager turns 35 and more beers to know this week
    March 14, 2023
  • Backwoods Brewing to open a 19-acre resort called Party Acres in the Columbia River gorge this May
    March 13, 2023
  • Distribution update: NYC’s Alewife Brewing now sells in eastern Pennsylvania + news from Maui, Urban South and more
    March 13, 2023
  • Years in planning: Flix Brewhouse will open a nine-screen luxury theater and brewery in Mansfield, Texas, this fall
    March 9, 2023

Footer

  • Email Newsletter Sign Up
  • About Craft Brewing Business
  • Contact Us
  • Advertise on Craft Brewing Business
  • Media Kit Download
  • Privacy and Terms

© 2023 · CBB Media LLC