Widmer’s struggles with its hefeweizen are not surprising. Boston Beer Co Inc (NYSE:SAM) has also struggled to reverse declining sales of its top beer, Boston Lager, as craft consumers drop safe and familiar beers for new, more exciting ones. Widmer’s hefeweizen has also been squeezed by Anheuser-Busch InBev NV (ADR) (NYSE:BUD) aggressive Shock Top positioning. Shock Top is a Belgian wheat-style beer, brewed and marketed to appear craft but appeal to younger drinkers who are not exclusively craft consumers. Shock Top sales grew over 100% in 2011 and continued to grow quickly in 2012, becoming the fastest-growing wheat beer brand in the U.S. While this is great news for Anheuser-Busch’s diversification and growth strategy – which, to be fair, includes owning over 30% of Craft Brew Alliance Inc (NASDAQ:BREW)’s shares – it’s been bad news for Widmer and its hefeweizen.
In good news, Craft Brew Alliance’s Kona, Redhook, and brand new Omission brands continue to grow, with Kona in particular delivering double digit depletions growth for nearly all of its offerings. Seasonal offerings for Kona, Redhook, and Widmer grew, underscoring the seasonal trend across the beer industry. With double digit growth for seasonal, specialty, and limited edition sales throughout 2012, Craft Brew Alliance Inc (NASDAQ:BREW) has shown that it can cater to and profit from fickle consumer taste.
Exports
In the question and answer section, Commercial Operations president Andrew Thomas revealed that the CraftCanTravel partnership has already produced results. In the fourth quarter, Craft Brew Alliance sold beer to customers in the U.K., Norway, Sweden, Denmark, Ireland, China, Hong Kong, South Korea and Japan, and have already received return orders for more. This is really exciting news for shareholders. The partnership moves Craft Brew Alliance into new and, in the case of the Asian markets, growing and far less saturated beer markets. While the overall U.S. beer market contracts by one or two percent a year and Europe is also declining, hundreds of new craft and microbrew breweries compete with established breweries for U.S. and European market share. Globally, however, China is actually the largest beer market and Asian consumers are steadily drinking more beer, growing the regional market by two to four percent a year. While big brewers like Anheuser-Busch have been present in these and more markets for years, Craft Brew Alliance Inc (NASDAQ:BREW)’s partnership gives it an edge over competitors in the craft segment like Boston Beer. Further differentiating its product, Craft Brew Alliance now offers some of the first imported craft beer in the Asian markets, giving it an edge over the established big brewers.
Bottom line
Craft Brew Alliance shareholders should continue to watch the company’s margins, Widmer’s decline, and downward guidance in 2013. However, this most recent conference call pointed to exciting new developments for the company as its export partnership with CraftCanTravel grows. Furthermore, Kona’s continued blockbuster growth, Widmer’s successful retooling, and excellent growth in seasonal and specialty offerings should leave Craft Brew Alliance Inc (NASDAQ:BREW) shareholders relieved about 2012 results and optimistic for 2013.
The article Exciting News in Craft Brew Alliance’s Earnings Call originally appeared on Fool.com and is written by Calla Hummel.
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