Kona Brewing Co. once again lifted Craft Brew Alliance’s (CBA) financial results.
CBA shared its second-quarter financial results, highlighted by portfolio-wide depletions (sales-to-retailers) growth of more than 1 percent, and shipment (sales-to-wholesalers) growth of 4.4 percent.
Kona was once again the driver, growing depletions (+8 percent) and shipments (+11 percent).
In a press release, CBA’s chief executive officer, Andy Thomas, said the results “reflect a tangible return on the strategic” marketing investments the company made behind Kona earlier this year, including advertisements during the NCAA men’s basketball tournament in March and a push to secure more points of distribution.
In fact, CBA found that demand outpaced in-store inventory, which led to out-of-stocks in key markets during its media campaign.
“In a down market, we accelerated Kona to 8 percent depletions growth, returned our total portfolio to net positive, and delivered record gross margin — all while doubling down on our future growth prospects to drive shareholder value,” he added.
Through the first six months of 2019, Kona depletions are up 5 percent, while shipments are up 10 percent. Depletions for flagship Kona Big Wave Golden Ale grew 25 percent in Q2 and increased 22 percent year-to-date.
Meanwhile, CBA’s total shipments for the first six months of the year are up 2.1 percent. Total depletions, however, have declined 1.4 percent. CBA’s revenue for the year is down 1.6 percent, while second-quarter revenue declined 2 percent, to $60.6 million.
Year-to-date Kona depletions have increased 6 percent compared to 2018 levels.
Anhesuer-Busch InBev, which owns a 31.3 percent stake in the Craft Brew Alliance, has until August 23 to either make a qualified offer to buy the company or pay a $20 million fee. As such, the company delayed updating its full-year outlook until early September.
“While we are pleased with our first half performance, which continues to underscore the strength of CBA’s portfolio and overall foundation, we are also cognizant of the sweeping changes taking place across the beverage category and the fact that our upcoming anniversary with AB is a significant one on multiple levels,” CBA chief financial and strategy officer Christine Perich said in the release. “Regardless of these external challenges and unknowns, I am confident that the strategic work we are actively doing — not just in beer but in beverage overall — will drive shareholder value.”