2014: Upheaval in Store for Widmer Brothers

 
On Thursday afternoon, Craft Brew Alliance released their 3rd quarter financial results.  Investors liked what they heard and sent CBA’s stock (ticker symbol, BREW) up 8% to $15.94 at the close of trading today. CBA management also held a conference call with Wall Street analysts, during which they revealed their plans for each of their brands in 2014:

  • Widmer Brothers:  2014 will be centered around the celebration of the 30th anniversary of the brand and the brewery. Highlights will include the introduction of a new year-round IPA called Upheaval. Brewed with 6 different hop varieties and 3 different grains, including wheat, Upheaval will be a fitting tribute, not only to the bold Northwest-style IPA, but to Kurt and Rob Widmer's unapologetic attitude in legacy of innovation. Additionally, 6 anniversary collaborations, all with Oregon Brewers, will be introduced throughout the course of the year.”

  • Redhook:  “2014 will be anchored by national activation of Redhook's exclusive partnership roster, including Dan Patrick, Buffalo Wild Wings and The Chive, with emphasis on the one-two punch of Long Hammer IPA and Audible Ale.”

  • Kona:  "2014 will simply be bigger. Bigger in terms of investment, with an acceleration in marketing and advertising spend, accompanied by a new agency of record, Duncan Shannon out of San Francisco.  Bigger in terms of geographies by bringing Kona's Liquid Aloha to 4 more states: Wisconsin, Michigan, Kentucky and Mississippi. Bigger in terms of variety by bringing castaway IPA to the mainland, and by introducing it into the successful Aloha Series, and bigger in terms of discipline, with a laser focus on the one-two punch of Longboard Lager and Big Wave Golden Ale."

  • Omission:  "stay the course with redoubled efforts to build distribution in bringing the great taste of Omission to gluten-intolerant consumers across the U.S."

  • All brands:  our industry-first cross-brand variety pack will get a new look in 2014, moving away from a seasonally-based cross-brand variety pack. We will introduce the craft beer Explorer pack, containing exclusive Explorer pack only offerings from Kona, Widmer brothers and Redhook.  With respect to pruning and eliminating clutter, we will be rationalizing our offerings next year in eliminating over 25% of our SKUs. This is a dramatic reduction, and will allow us to focus our resources on what's working, and ensure we're still offering the right variety to retailers and consumers, while helping reduce complexity across our entire system, from our breweries to our sales and marketing resources to our wholesalers, to our retailers.”

It will be interesting to see how the elimination of SKUs plays out. 25% is a sizeable reduction. With the release of the new Upheaval IPA, I wonder if this signals the end of Widmer’s Rotator IPA Series?? Lately, the series has seemed to have stalled, in terms of the number of new releases. We shall see…

Regardless, it looks like CBA has a great 2014 planned for craft beer fans!  For more details, you can find the full earnings call transcript at Seeking Alpha.


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