Craft Brew Alliance Shipments Decline 10.2%, Depletions Down 9% in Second Quarter - Brewbound.com

The effects of the COVID-19 pandemic were easy to see in Craft Brew Alliance’s latest earnings report.

Shipments of CBA products during the three-month period ending June 30 — in the thick of the pandemic and its shut down of on-premise establishments — declined 10.2%, to 206,900 barrels, down from 230,500 barrels in Q2 2019, according to a 10K filed with the Securities and Exchange Commission. The company also reported a 9% decline in depletions. Net sales declined from nearly $60.6 million in Q2 2019, to nearly $49.4 million in Q2 2020.

Breaking it down by brand, shipments of Kona products declined 11.1% in Q2, while depletions dipped 8%.

In fact, just two CBA brands, Redhook (+4.7%) and Omission (+32.4%) shipped more beer in Q2 2020 than the previous year. Shipments of Widmer Brothers (-21.9%) and CBA’s Square Mile Cider, Appalachian Mountain Brewery, Cisco Brewers and Wynwood brands (-18%, collectively) were in the red during the quarter.

Omission (+18%) was the only CBA brand to post positive depletions growth during the quarter, while Widmer Brothers (-26%), Redhook (-4%) and the other brands (-9%, collectively) declined.

CBA also shared its year-to-date performance halfway through 2020. For the six months ending June 30, total shipments declined 9.2%, to 363,300 barrels, down from 400,000 barrels through the first six months of 2019. Depletions declined 8%. Net sales totaled nearly $93.3 million, down from nearly $107.6 million at the halfway point of 2019.

Only the Omission brand posted positive shipments (+16.3%) and depletions (+13%) growth for the bulk of 2020, which the company attributed to the Omission Ultimate Light and the Omission hard seltzer brand.

Year-to-date through June 30, the Kona brand’s shipments (-7.2%) and depletions (-7%) both declined. The situation was the same for Widmer Brothers (-23.7% shipments, -20% depletions), Redhook (-2.5% shipments, -6% depletions) and all other brands (-13.7% shipments and -12% depletions).

The company attributed Kona’s shipment decline to Big Wave Golden Ale, Longboard Lager and Hanalei Island IPA, which were partially offset by the launch of Island Seltzer and Kona Light and the growth of Kona variety packs

Draft beer, which accounted for 22.6% of CBA’s mix halfway through 2019, was whittled down to just 9.7% through the first six months of 2020. It was even lower for the quarter, making up just 3.2% of CBA’s package mix. CBA shipped just 6,700 barrels of draft beer during Q2, compared to 51,100 barrels in 2019. In its 10K, CBA said it expects these trends to continue into the third quarter and “potentially” into Q4.

Nevertheless, CBA pointed to a 13% increase in packaged shipments during Q2, compared to the previous year. Shipments of Kona packaged products increased 12% during the quarter, due to demand for Big Wave, which increased packaged beer shipments 15% compared to Q2 2019. Kona’s Spiked Island Seltzers, which launched in test markets including California, also helped boost those numbers.

“Acknowledging the evolving set of challenges facing our industry today, we are especially proud of Kona’s 12% increase in packaged shipments for the quarter,” Andy Thomas, CEO of CBA, said in a press release. “This achievement builds on the momentum we fueled through our marketing investments last year and further validates Kona’s relevance and resilience as a brand that more and more consumers trust during the pandemic. Looking ahead at the balance of the year, we remain focused on our priorities, including the completion of our Kona brewery and combination with Anheuser-Busch.”

CBA has stopped hosting investor calls as it wades through the regulatory review process of merging with Anheuser-Busch InBev.

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Craft Brew Alliance Shipments Decline 10.2%, Depletions Down 9% in Second Quarter - Brewbound.com
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