In an effort to keep up with the growing consumer desire for local craft brands, executives from Craft Brew Alliance stressed the importance of their 2016 regional strategy during the company’s annual national CBA-Con meeting with Anheuser-Busch InBev wholesalers, held on Wednesday in Las Vegas.
That strategy includes an increased emphasis on strengthening sales of core brands in home markets and a focus on investing in new craft breweries via the company’s emerging business division, which has already inked partnerships with North Carolina’s Appalachian Mountain Brewery and Nantucket-based Cisco Brewers.
To grow sales of both existing core brands and to accelerate sales of partner brands like AMB and Cisco, CBA will refocus its efforts on a deliberate “home market strategy,” Brady Walen, the company’s director of brand marketing told Brewbound.
“This is about ensuring that we have really strong brands in our home markets where they are most locally relevant and where it matters most from a brand health and profitability standpoint,” he said.
The company believes that by concentrating sales and marketing efforts for Widmer and Redhook in the Pacific Northwest, for instance, it can achieve higher profit margins and greater local relevance “where it matters most.”
In markets where Redhook and Widmer might not be as locally relevant, however, CBA must decide how it wants to spend.
“We’ve seen volume declines on both of those brands in certain markets across the country, so the question is ‘where do we invest our marketing dollars?” he said. “Do we accept that those brands are in decline? In the case of some of those East Coast markets, we see more opportunity investing behind local brands and we understand the implications as it relates to volume.”
In other cases, CBA will focus greater attention on more national plays like Kona and Omission, Walen said.
Nevertheless, building regional partnerships with companies like Cisco and AMB will be critical to the company’s long-term growth potential.
“We have clear priorities for each region — by brand, brand family or by pack type,” said Walen. “In North Carolina, for instance, we have made it very clear that the number one priority for CBA is Appalachian Mountain. In other markets, we have a list of priorities that are a little deeper, especially in areas where we are more established.”
To help support its regional initiatives, CBA will introduce new packaging, new beers and institute a more streamlined approach to seasonal rollouts for the Widmer, Redhook and Kona brands.
Operating on what Walen described as a “trimester” release schedule, all three brands will each feature three core seasonal products, a move that will “bring some continuity with our seasonal strategy, so the team and the network knows what to expect,” he said.
Redhook seasonal products will include Blackhook, Summerhook and Winterhook; Kona seasonals will include Koko Brown, Lemongrass Luau and Pipeline Porter; Widmer seasonals will include Hopside Down IPL, Hefe Shandy, Brrr Northwest red ale.
The Redhook brand will also be getting yet another facelift, returning to its original retro packaging from the 1980s. In addition to seasonals, flagship beers Longhammer IPA and ESB, as well as soon-to-be-released American Pale Ale, which will launch nationally, and ESL (an extra special lager that will launch in Washington), will all receive the classic retro treatment.
Additionally, CBA will take a different approach to marketing Redhook in 2016. In years past, the company had somewhat unsuccessfully relied on partnerships with radio host Dan Patrick, restaurant chain Buffalo Wild Wings and popular website The Chive, as ways to gain national attention.
The latest strategy, Walen said, is centered on building brand strength in the brand’s home market of Washington.
“It’s a lot of what we’ve seen work with Widmer Brothers,” he said. “This is about helping the brand at home. We realize that we will likely continue to see volume declines outside of the home market, but it is important for us that the brand is strong at home. We can’t expect it to be strong elsewhere if it isn’t strong at home first.”
For Widmer, support in the Pacific Northwest will come by way of aluminum — CBA plans to rollout cans of its flagship and best-selling Hefeweizen in March.
“It’s about occasion,” said Walen. “We’ve talked about introducing Hefe in cans for years, but execution had been difficult. After learning more about our canning operations with other brands, we feel like we are ready to do it.”
The Hefeweizen cans will only be available in Oregon in 2016, Walen added.
“We are not in the business of building brand strength by adding SKUs,” he said. “We will be paying attention to cans and consumer feedback. Expansion is on the radar but not something we are actively pursuing at this time.”
Finally, the Kona brand will again receive national advertising support, Walen said, with investment in the national “Dear Mainland” TV campaign ads continuing throughout 2016.
Additional highlights from CBA-Con are included in the press release, below.
Portland, OR (October 14, 2015) – Craft Brew Alliance, Inc. (“CBA”) (Nasdaq: BREW), a leading craft brewing company, hosted its third annual CBA-CON national conference for beer wholesalers and distributors today in Las Vegas, following the National Beer Wholesalers Association Convention. During the conference, CBA leadership presented strategic business and brand plans for 2016.
“This is the third year that we’ve brought our national wholesaler partners together to share CBA’s business strategy and brand plans for the coming year, and it’s a great opportunity to get everyone excited and aligned, not just around our priorities, but the collective strength of the Alliance,” said Andy Thomas, chief executive officer, CBA. “No other company combines the power of multiple pioneering craft beer brands with strong local relevance and deep expertise in branding with national brewing and supply chain capability, the scale to drive national retail activation, allied access to the Anheuser Busch distribution network and a seasoned management team of beer veterans. It’s this combination of expertise and scale that gives us the soul of a craft brewer in the body of a big brewer and really creates the power of the Alliance.”
For 2016, CBA outlined its commitment to build on its distinct advantages in brewing, branding and bringing to market world-class American craft beers through:
- Continuing to focus on solidifying its brands in their home markets to strengthen the top line.
- Building out its Emerging Business division and expanding with new strategic partners that increase CBA’s relevance in key beer geographies while leveraging the company’s national footprint. The company’s two recent partners, Appalachian Mountain Brewery and Cisco Brewers have added North Carolina and Massachusetts to CBA’s home markets.
- Further optimizing its production capability in the west through expanding its largest brewery in Portland by 200,000 barrels and building a new 100,000 barrel brewery in Hawaii, while strengthening its east coast brewery in Portsmouth, NH to support alternating proprietorships with new strategic partners.
- Building on its strength in national chains and continuing to activate distinctive retail promotions, which helped CBA earn special recognition from Hooters of America in 2015 as the restaurant’s “Craft Beer Company of the Year.”
- Continuing to nurture its significant partnership with Anheuser-Busch InBev to leverage the strength of ABI’s seamless national distribution network.
- CBA also highlighted strategic 2016 brand priorities across the company’s distinctive portfolio:
- Redhook Brewery, which celebrates its 35th anniversary in 2016, will continue to focus on its legacy position as the “Granddaddy of Craft” in its home state of Washington. Redhook unveiled classic new packaging for its flagship beers Longhammer IPA and ESB, as well as soon-to-be-released American Pale Ale, which will launch nationally, and ESL, extra special lager, which will launch in Washington. Redhook also announced a new seasonal line-up: Blackhook, Summerhook and Winterhook, which will launch nationally and carry the bold packaging design. Redhook will soon be announcing the location for its new brewpub in Seattle, a move that brings the iconic brand back to its roots.
- Widmer Brothers Brewing will continue building on the momentum achieved through the brand’s renewed focus on Hefe, which remains Oregon’s favorite craft beer. Widmer Brothers also revealed that it will begin offering Hefe in cans, initially in Oregon, to celebrate the beer’s 30th anniversary in 2016 and meet the increased demand for its iconic American-style wheat in a more portable package. The brand also teased a new dark beer, Steel Bridge Porter, to launch in 6-packs and draft in Oregon and Washington. The new porter will round out a core line-up that includes Hefe, Upheaval IPA, Replay IPA and Drop Top Amber.
- Now a Top 10 national craft beer brand, Kona Brewing Co. will bring its unique brand of “Liquid Aloha” to life through new television advertising that encourages beer lovers to take more time to relax and enjoy life… as well as a pint, bottle or can of Kona Brewing flagships Longboard Lager and Big Wave Island Ale. In 2016, Kona will bring back its popular Aloha Series, which includes Koko Brown, Lemongrass Luau and Pipeline Porter nationally. Additionally, Kona’s Wailua Wheat will return to California. In Hawaii, Kona will launch its iconic Lavaman Red in package for the first time and continue its Makana Series, which connects Kona Brewing with local charities that support Hawaii’s sustainability and pristine environment.
- Omission Beer will continue to capitalize on the growing trend among consumers to avoid gluten. The brand will invest in growing awareness and distribution for its category leading flagships, Omission Pale Ale and Omission Lager. Additionally, the brand will continue working with corporate partners such as Wanderlust, a health and wellness event series, to bring the great taste of Omission to consumers looking to live a healthier lifestyle.
- CBA will continue to build on its strategic partnerships with Appalachian Mountain Brewery and Cisco Brewers through alternating proprietorships and master distribution agreements that will enable both growing breweries to meet increasing demand in their respective core markets of North Carolina and the northeast. Additionally, CBA will continue to partner with theChive’s Resignation Brewery and its 30+ million monthly online visitors to grow KCCO’s Gold Lager, with an emphasis on its home market of Texas and the military.
- Square Mile, which has grown to be the #2 hard cider brand in the Pacific Northwest and a top 10 craft cider brand, will expand distribution in its existing core markets in the west with the brand’s Original and hopped-version Spur & Vine.
- About Craft Brew Alliance
- CBA is a leading craft brewing company, which brews, brands, and markets some of the world’s most respected and best-loved American craft beers.
The company is home to three of the earliest pioneers in craft beer: Redhook Ale Brewery, Washington’s largest craft brewery founded in 1981; Widmer Brothers Brewing, Oregon’s largest craft brewery founded in 1984; and Kona Brewing Company, Hawaii’s oldest and largest craft brewery founded in 1994. As part of Craft Brew Alliance, these craft brewing legends have expanded their reach across the U.S. and more than 15 international markets.
In addition to growing and nurturing distinctive brands rooted in local heritage, Craft Brew Alliance is committed to developing innovative new category leaders, such as Omission Beer, which is the #1 beer in the gluten free beer segment, and Square Mile Cider, a tribute to the early American settlers who purchased the first plots of land in the Pacific Northwest.
Publicly traded on NASDAQ under the ticker symbol BREW, Craft Brew Alliance is headquartered in Portland, Ore., and operates five breweries and five pub restaurants across the U.S. For more information about CBA and its brands, please visit www.craftbrew.com.