(Portland, OR) – I’m finally getting around to looking over Friday morning’s Craft Brewers Alliance annual report. Here is the full rundown including yet another mention of Goose Island on my back pages…
A press release issued on Thursday touted that earnings per share doubled for the company in 2010 on a healthier gross margin and increased sales revenue of 6%. That said, the real story is in the barrels. Barrelage for the three breweries totaled 584,700 in 2010 versus 582,500 a year ago. Unfortunately, the Widmer data isn’t out there to compare to 2008.
Despite nearly all “super regionals” (a term I’m stealing from Erik Myers) growing at least 8% last year, production is down for both Redhook and Widmer Brothers. Kona, on the other hand, continues to be a success story.
Redhook Ale Brewery, once the most-produced brand among the three members of the Craft Brewers Alliance, saw a decline in production of its brands equal to 5.2%. Total production has dropped over 20% since 2005. 174,000 barrels represents the lowest production tally since 1995 when the brewery made just shy of 160,000 barrels (per 1996 annual report). As for what might be driving that, Symphony IRI data shows the brewery’s top two sellers, Long Hammer IPA and ESB, experienced a decline in sales across the supermarket channel.
Widmer Brothers Brewing saw a slight dip in production of its brands in 2010 down to 277,200 barrels. Though the brewery is seeing some success stories with recent introductions like Drifter and Deadlift, the flagship beer, Hefeweizen, declining in the supermarket channel as well last year.
Both breweries have launched an entirely new look to their product lines beginning this quarter and a PR campaign makes that loud and clear. Redhook continues to work with Lane PR in getting out the message about its new bottle design. On the Widmer side, multiple bloggers (but not this one) reportedly received a “gaudy wooden box” of beer from the company this past week.
The annual report also confirmed the existence of Copperhook cans, the Blueline Series and Backyard Series. Per the report, “[The Blueline Series beers] are hand crafted by the brewers and will only be available on draft at the pub at the brewery in Woodinville, Washington (“Washington Brewery”) as well as select restaurants and public houses in the Seattle, Washington area, and as a 22-ounce bottle at exclusive bottleshops and at the Washington Brewery.” The Backyard Series has a similar slant but is limited to the Portsmouth brewery’s local market and draft-only. As for the Copperhook cans, those will be packaged at Cold Spring’s growing plant in Minnesota according to a TTB filing. Cold Spring also produces beer for the 21st Amendment Brewery and a wide range of others.
Production of Kona Brewing‘s brand grew at 18% in 2010 to 133,000 barrels, outpacing the craft beer category for the seventh straight year. It is conceivable that sales could pass Redhook within the next few years at the rate that the two companies are going. Then again, Kona wouldn’t be where it is today without the resources and support of Redhook and Widmer Brothers that it’s received over the past decade. The annual report notes that capacity at Kona’s facility in Hawaii is a mere 11,000 barrels which implies that over 92% of Kona production is happening at other CBA facilities.
Speaking of CBA facilities, annual working capacity will remain at 909,000 barrels in 2011. As a way of helping to fill the excess capacity, CBA estimates that its contract brewing program may grow up to 65,000 barrels this year. Up to 35,000 of that will be a contract with an unspecified partner. TTB filings from recent years show that the brewery has only been contracting beer for BJ’s Restaurant and Brewhouse.
The other 25,000 to 30,000 will be for a brewery that was a hot topic of discussion this past week, Goose Island. The brewery has more than doubled production over the past four years and, as reported throughout the past year, has virtually run out of excess capacity at Fulton Street where its primary production facility is located. Between a small expansion in Chicago and the new contract, Goose Island production could reach 160,000 barrels this year. This would place it side-by-side with Bell’s, Boulevard and Harpoon, all of which hit a pace of 150,000 barrels a year in 2010.