Agreements Support Continued Distribution Growth, Brewery
Optimization, and International Expansion for CBA’s Portfolio
PORTLAND, Ore. & ST. LOUIS--(BUSINESS WIRE)--Aug. 23, 2016--
Brew Alliance, Inc. (CBA) (Nasdaq: BREW) and Anheuser-Busch (AB)
announced today a series of new commercial agreements that expand and
strengthen the companies’ long-term relationship and create new growth
opportunities for both companies. The agreements include an amended and
extended master distribution agreement, a new contract brewing
arrangement, and a new international distribution agreement.
Through the agreements, AB will provide additional support and committed
resources to accelerate CBA’s growth strategy, which includes:
strengthening its distinctive portfolio of craft brands; maximizing the
potential of Kona Brewing Co. as one of the fastest-growing American
craft brands; and optimizing CBA’s brewing footprint to drive gross
margin expansion and deliver its craft beers to more beer lovers in the
U.S. and around the world.
1. Master Distributor Agreement
CBA and AB have extended the current fee structure of their existing
Master Distributor Agreement for 10 additional years, through 2028. The
amended agreement secures CBA’s brands in the industry’s strongest
wholesaler network, enabling continued investment in brand growth and
strategic partnerships, such as Appalachian Mountain Brewery and Cisco
2. Contract Brewing Agreement
Under the terms of a new contract brewing arrangement, CBA and AB will
work together to transition up to 300,000 barrels of volume into AB’s
state-of-the-art breweries. This agreement will directly support CBA’s
ongoing brewery footprint optimization and enable both companies to
realize additional operational efficiencies.
3. International Distribution Agreement
AB will support the expansion of CBA’s portfolio of brands globally
through a new international distribution agreement. This agreement
builds on CBA’s recent distribution arrangements with AB, which launched
Kona in Brazil and Mexico, and creates opportunities to accelerate the
growth of CBA’s craft portfolio in additional international markets.
Commenting on the new agreements, Andy Thomas, CEO of CBA said: “We
are proud of our long-standing relationship with AB and have always been
candid about the competitive advantage of our distribution arrangement,
which allows CBA to independently manage our brands and still enjoy the
benefits of being a valued part of AB’s exceptional wholesaler network.
As both of our companies evolved over the past 18 months, it became
clear that our strategic focus and commitment to the growth of craft
beer were increasingly more aligned, and we started to explore ways to
collaborate more closely. We’re excited to build on this partnership and
look forward to the financial and operational benefits, which will
positively impact our top and bottom line.”
Felipe Szpigel, president, The High End, Anheuser-Busch, added: "We
have deep respect for CBA and these agreements represent a natural
progression of our relationship with them. As a company, we believe in
brewing amazing beers and elevating the sophistication of beer and the
category as a whole. CBA shares these beliefs and today’s announcement
will help bring CBA's impressive portfolio of craft brands to more beer
lovers in the U.S. and around the world. We will support the growth of
CBA’s brands and create new opportunities for both companies through our
unparalleled network of U.S. wholesaler partners, dedication to quality
through our industry-leading breweries and international reach."
CBA is expected to gain significant financial benefits from these
commercial agreements that will allow the company to continue investing
in its growth strategy and increase its sales and marketing spend behind
its brands. As a major CBA shareholder, AB is positioned to benefit
directly from those gains, along with the expected new opportunities the
agreements create for its international distribution system, U.S.
wholesaler partners, and breweries.
CBA and AB will work together over the coming months to implement the
brewing and international distribution aspects of these agreements.
CBA will hold a conference call today, Tuesday, August 23, 2016 at 2:15
p.m. PDT (5:15 p.m. EDT) to provide additional details of
The public is invited to listen to a live webcast of the conference call
on the Investors section of CBA’s website at www.craftbrew.com.
Approximately two hours following the conference call, an archived
webcast will be available at the same site and will remain available for
at least 90 days.
Interested parties may participate in the live conference via telephone
by dialing (877) 797-0723 if calling from within the United
States, or (615) 247-0220 from outside the United States, and entering
the access code 7070 0480. An audio replay of the conference
call will be available approximately two hours after the conclusion of
the call. The audio replay will remain available for seven days and is
accessible by dialing (855) 859-2056 or (404) 537-3406 and
entering the code: 7070 0480.
Goldman Sachs acted as financial advisor to CBA, and Wachtell, Lipton,
Rosen & Katz served as legal counsel.
Statements made in this press release that state CBA’s or its
management’s intentions, hopes, beliefs, expectations or predictions of
the future, including anticipated financial and operational benefits,
are forward-looking statements. It is important to note that the actual
results could differ materially from those projected in such
forward-looking statements. Additional information concerning factors
and risks that could cause actual results to differ materially from
those in the forward-looking statements is contained from time to time
in CBA’s filings with the U.S. Securities and Exchange Commission (the
“SEC”), including, but not limited to, its Annual Report on Form 10-K
for the year ended December 31, 2015 and in subsequent Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K. Copies of these documents
may be found on the Company’s website, www.craftbrew.com,
or obtained by contacting the Company or the SEC.
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.
We are 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 approximately 30
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
Publicly traded on NASDAQ under the ticker symbol BREW, Craft Brew
Alliance is headquartered in Portland, OR 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.
For more than 160 years, Anheuser-Busch and its world-class brewmasters
have carried on a legacy of brewing America’s most-popular beers.
Starting with the finest ingredients sourced from Anheuser-Busch’s
family of growers, every batch is crafted using the same exacting
standards and time-honored traditions passed down through generations of
proud Anheuser-Busch brewmasters and employees. Anheuser-Busch owns and
operates 19 breweries, 21 distributorships and 22 agricultural and
packaging facilities, employing more than 16,000 people across the
United States. For more information, visit www.anheuser-busch.com.
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Source: Craft Brew Alliance, Inc.
Craft Brew Alliance, Inc.
Craft Brew Alliance, Inc.