USA: Craft Brew Alliance reports Q4 and full-year 2016 results

After delaying its official 2016 earnings release by nearly three weeks, Craft Brew Alliance on March 16 issued fourth-quarter and full-year 2016 results, reporting a portfolio-wide shipment decline of 6 percent despite continued growth for the company’s Kona Brewing brand.

Kona shipments increased 13 percent in 2016 while depletions grew 17 percent, but significant declines across the Widmer and Redhook brands resulted in overall “flat” depletion trends in 2016.

CBA shipped a total of 748,900 barrels last year, down nearly 5 percent compared to 2015, according to an SEC filing.

In 2016, Redhook shipments plummeted 31.6 percent, to 127,200 barrels, while Widmer shipments fell 15.7 percent, to 148,1000 barrels, according to the filing. In the last two years alone, shipments of Widmer and Redhook products have shrunk by 136,000 barrels.

Meanwhile, shipments of the company’s gluten-reduced Omission Beer declined 16.7 percent, to 42,900 barrels, last year.

Net sales of $202 million in 2016 marked a decrease of 1 percent from the prior year.

During the fourth quarter, Kona depletions increased by 12 percent, outpacing trends in the craft beer marketplace. However, CBA’s overall depletions declined 3 percent year over year.

CBA attributed a 13 percent shipment decline in the fourth quarter to a reduction in wholesaler inventories in addition to lapping 2015’s fourth quarter increase in distributor inventories in preparation for a temporary shutdown of the company’s Portland brewery in Q1 2016.

Net sales of CBA brands declined 7 percent in the quarter to $3.4 million, which the company also attributed to the shipment decline. However, part of the decrease was offset by an increase in net revenue per barrel reflected in a $1.6 million contract brewing shortfall fee and $315,000 in international incentive revenue from ABI.

Gross profits also declined in the quarter by 13 percent to $13.4 million, reflected by “the reduction in shipment volumes, lower brewery utilization and higher cost of goods” compared to 2015, the company reported.

“While our fourth quarter performance was disappointing, it does not diminish the milestones achieved in 2016 — from the series of agreements with AB, to the acceleration of our Kona Plus portfolio strategy, to the new thinking on our brewing footprint,” CEO Andy Thomas said via a press release. “Looking forward, we are excited to build on the strength of Kona, which continues to distinguish itself in an increasingly competitive category.”

Additional fourth quarter and full-year highlights are included in the press release, below. Look for a follow-up report following tomorrow’s earnings call.

16 March, 2017